OT:RR:BSTC:CCR H258592 KLQ
Mark W. Furry
United States Steel Corporation
600 Grant Street, Room 1500
Pittsburgh, PA 15219-2800
RE: 46 U.S.C. § 55102; 19 C.F.R. § 4.80b(a); New and Different Product; Proposed Transportation of Iron Ore Pellets; United States Steel Corporation (“U.S. Steel”); iron ore pellets; sinter feed.
Dear Mr. Furry:
This is in response to your October 22, 2014, ruling request on behalf of your client, U.S. Steel, in which you request a ruling determining whether the proposed transportation by non-coastwise-qualified vessel would constitute a violation of 46 U.S.C. § 55102. Our decision follows.
FACTS
The following facts are from your supplemental ruling request, dated October 22, 2014 and emails to this office, dated October 27, 2014 and November 25, 2014. Your client proposes to transport iron ore pellets by non-coastwise-qualified vessels from Superior, Wisconsin; Duluth, Minnesota; and Two Harbors, Minnesota to a marine terminal in Nanticoke, Ontario in Canada. These vessels will transport the subject merchandise between the United States and Canada nine to fifteen times a month during the navigation season on Lake Erie. While in Canada, the iron ore pellets will undergo a screening process to separate the large iron ore pellets from the small iron ore pellets. The large iron ore pellets will be fed into a blast furnace. Non-coastwise-qualified vessels will transport the smaller iron ore pellets, as sinter feed, from Nanticoke, Ontario to Gary, Indiana and other U.S. ports. Your client provided this office with a description of the import and export specifications for these transportations.
ISSUE
Whether based on the import and export specifications provided, the proposed screening operations would result in the creation of a “new and different product” within the meaning of 19 C.F.R. § 4.80(b)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 and Scientific Services Directorate (“LSSD”) as to whether the processing you describe results in a new and different product. The LSSD determined that the difference between the iron ore pellets transported from the United States to Canada and the sinter feed transported from Canada to the United States is one of size and not of chemical or structural difference. Both products are iron ore. The distinguishing factor between the two products is that the iron ore leaving Canada is not large enough for use in the blast furnace at the Ontario facility. In sum, the iron ore leaving Canada is merely smaller than the iron ore that arrived in Canada.
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 the non-coastwise-qualified vessels would transport the same product from Superior, Wisconsin; Duluth, Minnesota; and Two Harbors, Minnesota to Gary, Indiana via Canada.
HOLDING
Based on the import and export specifications provided, the proposed screening 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 non-coastwise-qualified vessels 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