46 U.S.C. § 55102; 19 C.F.R. § 4.80b(a); New and Different Product; Proposed Transportation of Compressed Gas Liquid (CGL).

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H287537 August 25, 2017 OT:RR:BSTC:CCR H287537 ASZ CATEGORY: Carriers Daniel E. Waltz Squire Patton Boggs (US) LLP 2550 M Street, NW Washington, DC 20037 RE: 46 U.S.C. § 55102; 19 C.F.R. § 4.80b(a); New and Different Product; Proposed Transportation of Compressed Gas Liquid (CGL). Dear Mr. Waltz: This is in response to your June 8, 2017, ruling request on behalf of your client, SeaOne Caribbean, LLC (SeaOne), 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 June 8, 2017 ruling request and July 6, 2017 e-mail to this office. Your client proposes to transport shipments of Compressed Gas Liquid (CGL®) from Gulfport, Mississippi to a production facility in the Dominican Republic on or about March 1 - April 27, 2020. While in the Dominican Republic, a foreign place, the CGL is fractionated and delivered to customers in the Dominican Republic and/or used to produce new CGL formulations to be delivered to other customers, including customers in Puerto Rico. Non-coastwise-qualified vessels will transport the CGL to Puerto Rico, 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 a non-coastwise-qualified vessel 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 CGL products transported from Gulfport, Mississippi, the first U.S. coastwise point, and the CGL products transported to Puerto Rico, the second U.S. coastwise point, are “very similar to each other.” According to your submission, the CGL product transported from Gulfport is approximately 69% propane, 25% methane, and 4% ethane by weight, and the CGL product transported to the receiving terminal in Puerto Rico is approximately 79% propane, 17% methane, and 3% ethane by weight. You argue that the instant case is “virtually identical” to HQ 116084 (Jan. 12, 2004). In HQ 116084, a 95% pure butane by volume with 0.85% propane of U.S. origin was transported to Sweden, blended with other butane and “other LPG products” to make a 69.44% butane by volume with 27.98% propane. The LSSD noted major differences between HQ 116084 and the instant case. According to the LSSD, (1) “the butane product was blended with other butane and ‘other LPG products’”; (2) “the difference in volume percent of the starting and final products were 25.56% and 27.13% respectively for butane and propane”; and (3) “95% pure butane and 69% butane with 28% propane have typically different applications or uses.” The LSSD found that that the differences in percentages for weight and mole percent in the instant case are approximately one-third of the differences in HQ 116084. Furthermore, the LSSD noted that although the component percentages of the CGL products transported from Gulfport and the CGL products transported to Puerto Rico are slightly different, the main component is propane in both cases. Additionally, because propane and methane are not typically used together, they will likely have to be separated from each other before use. 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 from Gulfport, Mississippi, the first U.S. coastwise point, to Puerto Rico, the second U.S. coastwise point, via the Dominican Republic, 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