46 U.S.C. § 55102; 19 C.F.R. § 4.80b(a); New and Different Product; Proposed Transportation of Crude Oils.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H280059 April 26, 2017 OT:RR:BSTC:CCR H280059 ASZ CATEGORY: Carriers Christopher R. Wall Pillsbury Winthrop Shaw Pittman LLP 1200 Seventeenth Street NW Washington, DC 20036 RE: 46 U.S.C. § 55102; 19 C.F.R. § 4.80b(a); New and Different Product; Proposed Transportation of Crude Oils. Dear Mr. Wall: This is in response to your September 22, 2016, ruling request on behalf of your client, [], in which you request a ruling determining whether the proposed transportation by a non-coastwise-qualified vessel would constitute a violation of 46 U.S.C. § 55102. Our decision follows. FACTS The following facts are from your September 22, 2016 ruling request, November 11, 2016 letter, and February 28, 2017 letter to this office, as well as your e-mails with this office and the February 6, 2017 meeting. Your client proposes to transport shipments of light sweet crude oils by non-coastwise-qualified vessel from either [] to a blending facility in [] on or about []. While in [], a foreign place, the domestic light sweet crude oil will be added to foreign origin crude oil and blended. Non-coastwise-qualified vessels will transport the crude oil to [], a second U.S. coastwise point. Your client provided this office with its import and export specifications for these transportations. ISSUE Whether based on the import and export specifications provided, the proposed blending operations would result in the creation of a “new and different product” within the meaning of 19 C.F.R. § 4.80b(a), such that the proposed transportation by non-coastwise-qualified vessels would not be in violation of 46 U.S.C. § 55102. LAW AND ANALYSIS Pursuant to 46 U.S.C. § 55102, a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel has a coastwise endorsement. (emphasis added). Under 19 C.F.R. § 4.80b(a): A coastwise transportation of merchandise takes place, within the meaning of the coastwise laws, when merchandise laden at a point embraced within the coastwise laws (“coastwise point”) is unladen at another coastwise point, regardless of the origin or ultimate destination of the merchandise. However, merchandise is not transported coastwise if at an intermediate port or place other than a coastwise point (that is at a foreign port or place, or at a port or place in a territory or possession of the United States not subject to the coastwise laws), it is manufactured or processed into a new and different product, and the new and different product thereafter is transported to a coastwise point. (emphasis added). We have sought and received advice from the Laboratories & Scientific Services Directorate (LSSD) as to whether the processing you describe results in a new and different product. The LSSD determined that the crude oil transported from [], the first U.S. coastwise point, and the crude oil transported to [], the second U.S. coastwise point, are both crude oils and are recognized as such by the industry. The LSSD found that both the U.S. origin crude oils and the foreign origin crude oils are petroleum oils that have been taken from the ground and remain in an unchanged or minimally changed state. Pursuant to 19 C.F.R. § 4.80b(a), and in adherence to the LSSD findings, the proposed transportation would be in violation of 46 U.S.C. § 55102 because a non-coastwise-qualified vessel would transport the same product from [], the first U.S. coastwise point, to [], the second U.S. coastwise point, via [], a foreign place. HOLDING Based on the import and export specifications provided, the proposed blending operations would not result in the creation of a new and different product within the meaning of 19 C.F.R § 4.80(b)a; therefore, the proposed transportation by a non-coastwise-qualified vessel would be a violation of 46 U.S.C. § 55102. Sincerely, Lisa L. Burley Chief/Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations and Rulings U.S. Customs and Border Protection