CLA-2-84:OT:RR:NC:1:104
Mr. Brian Kavanaugh
Deringer Logistics Consulting Group
173 West Service Road
Champlain, NY 12919
RE: The tariff classification of fracturing equipment from Canada
Dear Mr. Kavanaugh:
In your letter dated February 21, 2013, on behalf of Trican Well Service, Canada, you requested a tariff classification ruling.
The trailers in question are used in the hydraulic fracturing (“FRAC”) industry for oil and gas recovery. The five units are as follows:
Chemical Van – This is a trailer mounted unit constructed to store totes of chemicals and to pump said chemicals to other units used in the well service. The basic components are the trailer, hydraulically powered chemical pumps, a diesel generator, computer controls and chemical totes. The Chemical Van is used to inject various chemicals into the hydration unit and/or blender during FRAC treatment.
Slip Stream Blender – This trailer mounted unit blends the fluids, proppant (sand) and chemicals before they are dispersed to the FRAC pumpers. The components of the trailer include diesel engines to provide hydraulic and electric power, valves and actuators, a control panel/computer, centrifugal pumps for mixing the fluid and sand and a slipstream centrifugal pump to transfer the fluid to the FRAC Pumper. The essential character of this unit is imparted by the mixing tub where the material is mixed, blended and sheered.
Dry Add Hydration Trailer –This trailer mounted unit is designed to hydrate water with powder gel to thicken the water prior to its discharge to the blender. The components of the trailer include a diesel engine, a Durst gear box, hydraulic pumps, dry powder feeders, chemical pumps and valves and a holding tank. The unit utilizes a series of baffles to mix the gel and water to a consistent blend. Tank agitators are located in the front and rear of the hydration tank.
Coiled Tubing Injector – This unit is designed to inject coiled tubing into the wellbore through the injector head. The unit’s components include a drive and traction system that provides power to the chain assembly to grip the coiled tubing string in order to run and retrieve the coiled tubing string, the frame, gooseneck and a load cell. The injector can be mounted on a base or supported by a crane over the wellbore. In your letter, you indicate that in order to operate, the injector must be attached to a coiled tubing unit. However, you are requesting a ruling on the stand-alone unit as it can be shipped separately.
Coiled Tubing Unit – This trailer mounted well servicing unit is designed to inject coiled tubing into the well head. It provides the tractive effort for running and retrieving the coiled tubing string from the well hole. The basic components of this unit are the trailer, control cabin, diesel engine and generator, the work reel, the drive and traction system, the chain systems, the frame and gooseneck, the load cell and electrical and hydraulic systems.
While these wheeled trailers are designed to be towed by other vehicles, your request covers only the trailers themselves, not the trailers together with their respective towing vehicles.
In a telephone conversation with a member of my staff, you confirmed that the tubing will not be included at time of importation.
In understanding the language of the Harmonized Tariff Schedule of the United States (“HTSUS”), the Explanatory Notes (“ENs”) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the Harmonized System at the international level, may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. The ENs to heading 87.16 state, in pertinent part, that the classification of trailers with permanently built-on machines or appliances is determined according to the classification of the whole. Units deriving their essential character from the machine or appliance incorporated in the vehicle, and not from the vehicle itself, are excluded from heading 8716 and referred to the heading appropriate to the machine or appliance.
The applicable subheading for the Chemical Van will be 8413.60.0040, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Pumps for liquids whether or not fitted with measuring devices; liquid elevators: parts thereof: Other rotary positive displacement pumps, Hydraulic fluid power pumps, Other”. The duty rate will be free.
The applicable subheading for the Slip Stream Blender and Dry Add Hydration Trailer will be subheading 8479.82.0040, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter, parts thereof: Other machines and mechanical appliances: Mixing, kneading, crushing, grinding, screening, sifting, homogenizing, emulsifying or stirring machines: Mixing, kneading or stirring machines”. The rate of duty will be free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
With regard to the Chemical Van, reference is made in your letter toward classifying this unit in heading 8479, HTSUS. The ENs to heading 84.79 state that this heading is restricted to machinery having individual functions which:
(a) Is not excluded from this Chapter by the operation of any Section or Chapter
Note. and (b) Is not covered more specifically by a heading in any other Chapter of the
Nomenclature. and (c) Cannot be classified in any other particular heading of this Chapter since: (i) No other heading covers it by reference to its method of functioning,
description or type. and (ii) No other heading covers it by reference to its use or to the industry in which
it is employed. or (iii) It could fall equally well into two (or more) other such headings (general
purpose machines).
The essential character of the Chemical Van is imparted by the pumps. As these pumps are specifically provided for in subheading 8413.60.0040, HTSUS, classification in heading 8479, HTSUS, would not be appropriate.
With regard to the Slip Stream Blender Unit and the Dry Add Hydration Unit, reference is made in your letter toward classifying these units in subheading 8413.60, HTSUS. While both units incorporate pumps, the essential character of each unit is imparted by the mixing equipment. Thus, classification in subheading 8413.60, HTSUS, would not be appropriate.
Your inquiry does not provide enough information for us to give a classification ruling on Coiled Tubing Injector or the Coiled Tubing Unit. Please provide the following information:
You state that the system is used to clean the wellbore and pump fluids into a pre-existing wellbore.
Does the system, as imported as a functioning unit, “attack” the crust of the earth to either start the wellbore or, through the use of tools at the end of the coiled tubing, do the actual drilling of the wellbore?
Please confirm that the trailer unit and modified tractor are imported together, on a single entry.
Please confirm that, due to the extensive modifications done to the tractor, it is no longer capable as being used outside of the FRAC operations. If so, please elaborate.
You state that the tubing is not being imported with the unit. Is the tubing reused (spooled back onto the reel) or is the tubing a single use item?
Please confirm that the tools used on the tubing are not being imported at the time of entry.
When this information is available, you may wish to consider resubmission of your request. We are returning any related samples, exhibits, etc. If you decide to resubmit your request, please include all of the material that we have returned to you.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Patricia O’Donnell at (646) 733-3011.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division