HQ 111846: Coastwise Trade; Fuel Oil Blending; 46 U.S.C. App. 883; 19 C.F.R. 4.80b(a).

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 111846

                         April 28, 1992

VES-3-07   CO:R:IT:C  111846  JBW

CATEGORY:   Carriers

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