VES-3-07 CO:R:IT:C 111846 JBW
Margaret R. Polito, Esquire
Coudert Brothers
200 Park Avenue
New York, New York 10166
RE: Coastwise Trade; Fuel Oil Blending; 46 U.S.C. App. 883; 19
C.F.R. 4.80b(a).
Dear Ms. Polito:
This letter is in response to your letters, dated February
12, 1992, and April 8, 1992, in which you provide additional
information and clarification on certain gasoline blending
components as requested in our ruling letter 111846, dated
January 6, 1992.
FACTS:
In Headquarter Ruling Letter 111846, this office evaluated
different blending operations and blending componets used by
Vitol Energy (Bermuda) Ltd. ("Vitol") in making unleaded premium
gasoline to determine whether such blending operations create or
whether such components are manufactured into "new and different
products" with the meaning of 19 C.F.R. 4.80b(a) so that the
proposed transportation of the blend by a foreign-flag vessel is
not in violation of 46 U.S.C. App. 883. For reasons stated in
that letter, we withheld final consideration on the use of Light
Cat Gas, Trinidad Reformate, Heavy Cat Gas, and Heavy Pygas
pending further test results. You provided information on these
components, and other components, in your letter of February 12,
1992. By telephone, this office requested further clarification
on some of these components, which you provided by letter of
April 8, 1992. The components specifications are as follows:
NAME SG RON MON R+M/2 LEAD 50PCT SULP MERC RVP
DEG C PCT PPM PSI
WT
ASTM LIMITS 82.0 87.0 77 MIN (2)
MIN MIN (1) MAX MAX
Light Cat Gas 0.70 90.3 79.3 84.8 0 78.0 0.01 3 11.1
Alkylate 0.70 95.0 92.3 93.7 0 104.0 0.01 3 7.5
Venezuelan
Cat Gas 0.76 91.0 80.0 85.5 0 105.0 0.07 3 8.0
Trinidad
Reformate 0.78 94.5 85.0 89.8 0 125.0 0.02 3 8.5
Heavy Cat
Gas 0.80 89.8 79.7 84.8 0 145.0 0.15 4 2.0
Pygas (Heavy) 0.86 97.2 82.4 89.8 0 154.0 0.01 3 2.0
Amoco Light
Cat Gas 0.68 93.4 80.8 87.1 0 56.0 0.01 3 11.2
NAME 10PCT 90PCT FBP DIST COP EXIST OXID V/L
DEG C DEG C DEG RES COR GUM STAB
PCT MG/
VOL 100ML
ASTM LIMITS 225 2PCT 5
MAX MAX MAX
Light Cat Gas 49 194 192 1.0 1 2 240+ 50.3
Alkylate 4 132 197 2.5 1 2 360+ 53.9
Venezuelan
Cat Gas 57 199 220 3.0 1 2 360+ 63.5
Trinidad
Reformate 66 171 235 1.0 1 2 240+ 67.8
Heavy Cat
Gas 80 180 210 1.0 1 3 240+ 88.6
Pygas (Heavy) 120 165 188 3.0 1B 10 150 98.1
Amoco Light
Cat Gas 44 96 128 1.0 1 2 360+ 45.3
The vapor liquid ratio (V/L) was calculated using the formula:
52.47 - 0.33RVP + 0.20T10 + 0.17T50, where T10 is the
distillation temperature in degrees C for 10 % evaporated, T50 is
the distillation temperature in degrees C for 50 % evaporated,
and RVP is RVP in kPA.
ISSUE:
Whether the blending components described above, when used
to make ASTM D4814 unleaded gasoline, become "new and different
products" within the meaning of 19 C.F.R. 4.80b(a) so that the
proposed transportation of the blending components by a foreign-
flag vessel is not in violation of 46 U.S.C. App. 883.
LAW AND ANALYSIS:
Section 883 of Title 46, United States Code Appendix,
provides, in pertinent part:
No merchandise shall be transported by water,
or by land and water, on penalty of
forfeiture of the merchandise (or a monetary
amount up to the value thereof as determined
by the Secretary of the Treasury, or the
actual cost of the transportation, whichever
is greater...), between points in the United
States, including Districts, Territories, and
possessions thereof embraced within the
coastwise laws, either directly or via a
foreign port, or for any part of the
transportation, in any other vessel than a
vessel built in and documented under the laws
of the United States and owned by persons who
are citizens of the United States....
46 U.S.C. App. 883. The Customs Service has ruled that a point
within the territorial waters of the United States is a point
embraced within the coastwise laws. The territorial waters of
the United States consist of the territorial sea, defined as the
belt, three nautical miles wide, seaward of the territorial sea
baseline, and to points located in internal waters, landward of
the territorial sea baseline, in cases where the baseline and
the coastline differ.
Section 4.80b(a) of the Customs Regulations provides, in
part, that:
[M]erchandise 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.
19 C.F.R. 4.80b(a). In applying this section, the Customs
Service has held that merchandise manufactured or processed into
a new and different product must be landed and processed at an
intermediate port or place other than a coastwise point; the
manufacturing or processing may not take place on board a vessel.
Pursuant to Treasury Decision 91-32, 56 Fed. Reg. 14467
(April 10, 1991), the Customs Service requires the submission of
data on the procedures of and materials used in a fuel oil
blending operation to determine whether the merchandise is
subject to the provisions of 46 U.S.C. App. 883. In its
analysis, the Customs Service has adopted for most cases
standards established by the American Society for Testing
Materials (ASTM), for such standards represent industry-developed
criteria for characterizing fuel oils. The Customs Service will
generally consider products of different ASTM grades as
different products. Consequently, either gasoline or blending
components of the gasoline that are loaded at a coastwise point,
blended at a foreign port or place, and unloaded at another
coastwise point must change ASTM grade to be considered a "new
and different" product for purposes of the coastwise laws.
We have reviewed the information that you have provided and
conclude that they do not meet the ASTM standards as gasoline and
can be regarded as new and different products when used to make
unleaded gasoline meeting the ASTM specifications. Therefore,
the transportation of these blendstocks by foreign-flag vessels
will not result in a violation of 46 U.S.C. App. 883.
Finally, in your letter of April 8, 1992, you supply
additional data on the distillation residues of certain
components. You also raise a number of issues regarding the
appropriated testing method to determine the vapor liquid ratio.
We find that the specifications given for the blendstocks which
clarify the issue of the distillation residues are valid.
Moreover, we concur with your statement that ASTM D2533 testing
is unnecessary for blendstocks that fail to meet several other
ASTM D4814 specifications. We are of the opinion that the D2533
testing is necessary for unleaded gasolines.
HOLDING:
The blending components listed above do not meet the ASTM
standards as gasoline and can be regarded as new and different
products when used to make unleaded gasoline meeting the ASTM
specifications. Therefore, the transportation of these
blendstocks by foreign-flag vessels will not result in a
violation of 46 U.S.C. App. 883.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch