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Customs Service changes Sontara duty treatment.

The U.S. Customs Service has issued a ruling that would significantly increase the tariff for imported surgical gowns and drapes manufactured from "Sontara," a DuPont product used by a number of INDA member companies.

Sontara is a spunlaced roll good product that is manufactured from a combination of cellulose fibers and textile fibers. By weight, Sontara is 55% wood pulp based fiber and 45% polyester fiber. Sontara i's regularly shipped outside of the U.S. and converted into single-use surgical gowns and drapes that are imported back into the U.S. for commercial sale.

Since 1973, under the old Tariff Schedule of the U.S. (TSUS), the Customs Service had regarded Sontara to be a paper product. According to Customs Service officials, the rationale for the classification was that products manufactured primarily from wood pulp, regardless of the binding process used in their manufacture, should be classified as paper for tariff purposes. Similarly, products manufactured primarily from textile fibers should be considered textiles, without regard to process used in their production.

As a paper product, single-use surgical gowns and drapes manufactured from Sontara were subject to a duty of 5.6% when imported into the U.S.

In 1988, however, legislation was enacted that did away with the TSUS system and replaced it with the newly-adopted Harmonized Tariff Schedule of the U.S. (HTSUS). To complete this conversion from the old system to the new, products that had previously been classified under the TSUS are now being reclassified, on a case-by-case basis, under the Harmonized system.

It was during this reclassification process that the Customs Service determined that surgical drapes and gowns made from Sontara could not be considered paper products because the process used to manufacture Sontara is different from the techniques employed to manufacture composite paper and paper board products. Specifically, the Customs Service pointed out that Sontara is made by entangling fibers through a water jet process rather than sticking layers of paper together with an adhesive.

This determination means that single-use surgical drapes and gowns manufactured from Sontara will be subject to a duty of 17% under the Harmonzied system-even though there is no change in the product's composition, craftsmanship or any other aspect of production or importation.

Overturning The Determination

INDA member companies are currently engaged in negotiations to have this determination overturned on the grounds that it is unjust and contradicts the general rules of interpretation for the Harmonized system.

As Ken Read of Baxter Converters, El Paso, TX, has emphasized, the explanatory notes to the HTSUS clearly describe the differences between paper products and textile products and base the difference between the two types of products on the amount of cellulose or textile fibers contained in each-not th manufacturing process used in their production.

According to these explanatory notes, the Customs Service is aware that many paper p consist of a mixture of textile and cellulose fibers, but a product should only be considered textile if it contains a predominate amount of textile fibers by weight.

There is concern, therefore, that the Customs Service did not follow the explanatory notes in making the determination on Sontara and an effort is underway to have this determination "reconsidered" within the Customs Service. In particular, several INDA member companies are petitioning the Customs Service to move Sontara back into its proper category as a paper product so that it will be subject to a 5.6% duty instead of a 17% duty.

If this reconsideration effort fails, there are several other alternative approaches that may be pursued to ensure that Sontara products are not charged the higher duty. For instance, importers would have the option of protecting the duty when forced to pay at the border, or legislation could be sought to reduce the duty on either a temporary or permanent basis.

The INDA Position

One point appears certain-the controversy surrounding this Customs Service determination has just begun. As word travels about this determination, companies will be assessing its impact on their businesses and deciding what course should be followed to prevent the implementation of this higher duty.

Many are coming to realize that a 17% duty on single-use surgical gowns and drapes would surely increase health care costs and could unfairly and unnecessarily reduce the market for these products. For this reason, INDA supports its members in seeking the fairest treatment possible for the products they import.

As the industry's trade association, INDA will do what is necessary to prevent the application of inequitable or unfair duties on products imported by our member companies and will continue to work with our members to help ensure that the duty treatment of surgical gowns and drapes under the HTSUS is fair, just and equitable for all.
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Title Annotation:Capital Comments; ruling will increase tariff for imported surgical gowns and drapes manufactured from Dupont product
Author:Mayberry, Peter
Publication:Nonwovens Industry
Article Type:column
Date:Mar 1, 1990
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