Coastwise transportation; Merchandise; New and Different Product; 46 U.S.C. App. §883; 19 CFR 4.80b(a).

HQ 116084 January 12, 2004 VES-3-07:RR:IT:EC 116084 TLS CATEGORY: Carriers Ms. Beverly J. Rudy Sutherland, Asbill & Brennan, LLP 1275 Pennsylvania Av., N.W. Washington, D.C. 20004-2415 RE: Coastwise transportation; Merchandise; New and Different Product; 46 U.S.C. App. §883; 19 CFR 4.80b(a). Dear Ms. Rudy: This is in response to your letter dated December 8, 2003, in which you request a ruling regarding the proposed coastwise transportation of domestic butane that will be processed in Sweden before returning to the United States. FACTS: You propose to have United States-origin butane, which has a purity of 95 percent of the total volume and contains only 0.85 percent of propane, transported from a United States port aboard a foreign-flagged vessel to Sweden to be blended with other butane and “other LPG products.” The blended product, which would be an LPG mix and contain 69.44 percent of butanes and 27.98 percent of total volume of propane, would then be transported in a foreign-flagged vessel back to a United States port for discharge. The specifications for the blending scenario you propose were enclosed with your letter. ISSUE: Whether the proposed blending of butane as specified in the scenario referenced above results in a new and different product within the meaning of 19 CFR 4.80b(a). LAW AND ANALYSIS: Under 46 U.S.C. App. §883, no merchandise shall be transported by water between points in the United States, either directly or via a foreign port in any vessel other than a vessel built in and documented under the laws of the United States and owned by citizens of the United States. Under 19 CFR 4.80b(a), the following is provided: 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 our Office of Laboratories and Scientific Services (OLSS) as to whether the processing you describe results in a new and different product. The OLSS has concluded that the blending process you propose would result in a new and different product. The OLSS specifically concludes that the product described as an LPG Mix, having the composition provided in the analysis sheet entitled, “Borealis-Certificate of Quality,” is a new and different product from the product described by the analysis sheet entitled “Stenungsund analysis of cargo.” In light of these findings, we find that the movement of butane on a foreign-flagged vessel to Sweden to be processed into a new and different product as described, then transported by a foreign-flagged vessel back to the United States, does not violate 46 U.S.C. App. §883. Please note that if the butane transported to Sweden is processed in a manner different than what you described to us in your December 8, 2003 submission, then our finding herein does not apply. HOLDING: The proposed blending of butane as specified in the scenario referenced above results in a new and different product within the meaning of 19 CFR 4.80b(a). Consequently, the proposed use of foreign-flagged vessels does not violate 46 U.S.C. App. §883. Sincerely, Glen E. Vereb Chief Entry Procedures and Carriers Branch