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

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H333886 October 3, 2023 OT:RR:BSTC:CCR H333886 HKC CATEGORY: Carriers William N. Myhre K&L Gates LLP 1601 K Street, NW Washington, DC 20006 RE: 46 U.S.C. § 55102; 19 C.F.R. § 4.80b(a); New and Different Product; Proposed Transportation of Briquette Feed. Dear Mr. Myhre: This is in response to your August 17, 2023, ruling request on behalf of your client, The Master’s Group, Inc. (“TMG”), in which you request a ruling determining whether the proposed transportation by a non-coastwise-qualified vessel, as originally contemplated in ruling HQ H300267, would constitute a violation of 46 U.S.C. § 55102 in light of new facts. Our decision follows. FACTS The following facts are from your August 17, 2023 ruling request and your subsequent September 21, 2023, September 22, 2023, and September 27, 2023 emails to this office. You note that the facts in this ruling are substantially similar to those of H300267, with the key distinction being your client’s intent to process iron pellet chips and fines into briquette feedstock instead of sinter feed. You state there is no physical difference between the briquette feedstock product contemplated here and the sinter feed contemplated in H300267. Your client, a broker processor in the raw materials, by-products and recycling business, facilitates transactions between customers and suppliers for a variety of metals, minerals, and other materials. In the present case, your client is facilitating a transaction between [ ], and [ ] for the processing of iron ore pellet chips and fines (“pellet chips”) into briquette feedstock. [ ] has acquired iron ore pellets produced in the United States and shipped from Minnesota to [ ]’s facility in Hamilton, Ontario using non-coastwise-qualified shipping. The transportation and handling of the pellets results in the creation of iron ore pellet chips and fines that are not suitable as pellet feed for the blast furnace that [ ] uses to produce iron, but when crushed can be suitable to produce either sinter feed or briquette feedstock used to make briquettes utilized in the production of Direct Reduced Iron (“DRI”). The briquette feedstock must be further processed into briquettes before it may be used to produce steel. [ ] intends to contract with [ ] to process the iron ore pellet chips and fines in Ontario, where the chips and fines will be crushed into briquette feedstock. The briquette feedstock will then be transported from Ontario to Toledo, Ohio utilizing a non-coastwise qualified vessel. From there, the briquette feedstock will be transported by ground to a [ ] facility in Butler, Indiana where they will be molded by a press into briquettes measuring approximately 42mm x 25mm x 20mm. The briquette feedstock contemplated in this ruling contains no physical difference from the sinter feed contemplated in ruling H300267. ISSUE Whether the proposed processing of iron ore pellet chips and fines into briquette feedstock 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 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). The provisions of 46 U.S.C. § 55102 are implemented by19 C.F.R. § 4.80b(a), which provides, in pertinent part: 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). In support of its position that the iron ore pellets and fines and being processed into a new and different product, namely briquette feedstock, you cite the following excerpt from ruling H300267: “Per the Kirk-Othmer Encyclopedia of Chemical Technology, Fifth Edition, it is noted that pelletized iron ore, sintered iron ore and sinter feed iron ore are all primary forms of crude iron ore used in steel manufacture. Prior to steel making[,] iron ore is beneficiated (i.e. the removal of most of the sand, clay and other impurities found as the mineral is taken out of the ground) and then ground to a consistent sieve size. However, once the ore is beneficiated and ground to an acceptable size, the powder is usually too fine to be used directly into the steel making process or other processes that use iron ore. In order to make the iron ore powder usable in most manufacturing processes, it must be agglomerated into different primary forms. These forms are usually pellets, sintered particles or briquettes. The type of agglomeration required is determined by the specific processing the iron ore will undergo. Some processes call for agglomeration in the form of pellets, some processes will call for the sintered form of agglomeration, and some processes will use the briquetted form of the iron ore.” (emphasis added). Based on the above, just as the sintered feedstock contemplated in H300267 was too fine to be used directly in the steel making process without further agglomeration, here the briquette feedstock must be agglomerated into briquettes prior to use in steel making. Further, you note that the briquette feedstock produced here contains no physical difference from the sinter feed in H300267. Pursuant to 19 C.F.R. § 4.80b(a), we find that the proposed processing operations of iron ore pellets and fines into briquette feedstock will result in a “new and different product.” Therefore, the proposed transportation is not considered coastwise transportation within the meaning of 46 U.S.C. § 55102. We emphasize that our determination is based upon the information provided, is for purposes of 19 CFR § 4.80b(a) only and is limited to finding that the subject products proposed to be transported from Canada to the United States for the purposes described above are considered “new and different products” within the meaning of 19 C.F.R. § 4.80b(a). Furthermore, our determination is limited to the subject products explicitly described in your ruling submission within the meaning of 19 C.F.R. § 4.80b(a). HOLDING Based on the information provided, the proposed processing operations would result in the creation of a new and different product within the meaning of 19 C.F.R. § 4.80b(a); therefore, the proposed transportation by a non-coastwise-qualified vessel would not be a violation of 46 U.S.C. § 55102. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a CBP field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based. Sincerely, W. Richmond Beevers Chief Cargo Security, Carriers and Restricted Merchandise Branch Office of Trade, Regulations and Rulings U.S. Customs and Border Protection