I’ve been continuing my exploration of chapter 98, the basement of the U.S. Harmonized Tariff Schedule (HTS), and stumbled across the Nairobi Protocol.
I’ve been continuing my exploration of chapter 98, the basement of the U.S. Harmonized Tariff Schedule (HTS), and stumbled across the following classifications:
Articles specially designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons; parts and accessories (except parts and accessories of braces and artificial limb prosthetics) that are specially designed or adapted for use in the foregoing articles:
Articles for the blind:9817.00.92Books, music and pamphlets, in raised print, used exclusively by or for them
9817.00.94Braille tablets, cubarithms, and special apparatus, machines, presses, and types for their use or benefit exclusivelyOther9817.00.96
The description of the first two classifications is self explanatory. What piqued my interest was naturally the magical word FREE that follows each of the three classifications in the HTS. I was also curious about what could possibly fall under the third, and apparently broad, category of "other."
Classifications within chapter 98 frequently come with a history and this grouping is no different. It turns out that in 1952 the United Nations enacted the Agreement on the Importation of Educational, Scientific and Cultural Materials also known as "The Florence Agreement." Under this program signatories agreed to allow the duty-free treatment of goods that were determined to facilitate the free exchange of knowledge and ideas. In 1976 the program was modified to incorporate the "Nairobi Protocol" that expanded the scope of the Florence Agreement to incorporate articles for the betterment of the physically and mentally disabled as well as for the blind.
The U.S. first implemented the Florence Agreement, including the Nairobi Protocol, in 1983. The law has undergone several revisions ultimately resulting in the three classifications above. The program is administered by the U.S. International Trade Administration (ITA) that, until 2010, required importers to submit a supplementary form to the ITA. The ITA no longer requires the form; rather, it collects its information through entry data submitted by importers. The ITA reserves the right, however, to request additional information from importers of goods using these classifications.
We are still no closer to understanding what might fall under the third classification of 9817.00.96 or "Other."
Annex E to the UN's Nairobi Protocol specifically listed the articles intended to be included within the agreement as:
(i) All articles specially designed for the educational, scientific or cultural advancement of the blind which are imported directly by institutions or organizations concerned with the education of, or assistance to, the blind, approved by the competent authorities of the importing country for the purpose of duty-free entry of these types or articles, including:(a) talking books (discs, cassettes or other sound reproductions) and large-print books;(b) phonographs and cassette players, specially designed or adapted for the blind and other handicapped persons and required to play the talking books;(c) equipment for the reading of normal print by the blind and partially sighted, such as electronic reading machines, television-enlargers and optical aids;(d) equipment for the mechanical or computerized production of Braille and recorded material, such as stereo-typing machines, electronic Braille, transfer and pressing machines; Braille computer terminals and displays;(e) Braille paper, magnetic tapes and cassettes for the production of Braille and talking books;(f) aids for improving the mobility of the blind, such as electronic orientation and obstacle detection appliances and white canes;(g) technical aids for the education, rehabilitation, vocational training employment of the blind, such as Braille watches, Braille typewriters, teaching and learning aids, games and other instruments specifically adapted for the use of the blind.(ii) All materials specially designed for the education, employment and social advancement of other physically or mentally handicapped persons, directly imported by institutions or organizations concerned with the education of, or assistance to, such persons, approved by the competent authorities of the importing country for the purpose of duty-free entry of these types of articles, provided that equivalent objects are not being manufactured in the importing country.
While the above list provides a better understanding of articles for the blind, bullet (ii) does not provide us with any more information about the "other" classification.
A peek into the Customs Ruling Online Search System (CROSS) and searches on the word "Nairobi" or the number "9817.00.96" begin to answer the question. Within CROSS we find nearly 400 rulings that either extend the duty-free benefit under the Nairobi Protocol or limit its application.
A wide range of goods are found to fall under the protocol including:
- Hearing aids,
- Grab bars,
- Incontinence briefs,
- Diabetes monitoring devices,
- Specially designed or modified furniture, and
- Electronic voice synthesizers.
The rulings also underline that parts and accessories that are exclusive to goods falling under these classifications are also subject to the protocol. When meeting this exclusivity test the following articles have been found to be duty free:
- Hearing aid batteries,
- Carrying cases, and
- Wheel chair components.
Readers are encouraged to peruse CROSS to gain a deeper understanding of additional articles, components and accessories that are included and excluded from the protocol. If an importer has a question about whether a product is eligible for the protocol, submitting for a binding ruling is a surefire method of answering that question.
When taking advantage of the Nairobi Protocol classifications of 9817.00.92, 9817.00.94, and 9817.00.96, the importer must also report the 10-digit classification of the good as provided for within chapters 1-97 of the tariff. The importer will also report the statistical quantity associated with that classification.
The astute among you may have noted that many of the goods that qualify for duty-free treatment under the Nairobi Protocol are already themselves listed as duty free within chapters 1–97. Why would an importer take on the additional administrative burden of claiming the additional exemption in chapter 98? Classification under the Nairobi Protocol not only eliminates duty but it also eliminates application of the merchandise processing fee or MPF.
Use of the Nairobi Protocol is based on actual end use. This requires the importer to be able to demonstrate that end use through business records. For some this may be simple matter. For others, such as distributors of components, it may require surveying customers to demonstrate a qualifying end use.
As with many of the provisions under chapter 98, the use of the Nairobi Protocol is not mandatory. If your goods, however, qualify for the program, why would you not take advantage of it?
Now excuse me as I go back into the basement and see what other interesting duty exemption provisions I can uncover.