HQ 109532: Applicability of 46 U.S.C. App. 883 to transportation of raw materials from the continental United States or foreign countries to the Virgin Islands where they are manufactured into Portland Cement which is then transported to the continental United States

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 109532

                                   August 3, 1988

          VES-3 CO:R:P:C  109532 PH

          CATEGORY:  Carriers

          Nicolas Jimenez, Esq.
          Jimenez, Graffam & Lausell
          Suite 505, Midtown Building
          421 Munoz Rivera Avenue
          Hato Rey, Puerto Rico 00918

          RE:  Applicability of 46 U.S.C. App. 883 to transportation of raw
          materials from the continental United States or foreign countries
          to the Virgin Islands where they are manufactured into Portland
          Cement which is then transported to the continental United States

          Dear Mr. Jimenez:

              This in response to your letters of May 20, 1988, in which
          you request a ruling on the purchase and shipment of raw materi-
          als from the continental United States or foreign countries to
          the United States Virgin Islands where the raw materials are
          manufactured into Portland Cement and that cement is transported
          to the continental United States.  We are unable to answer your
          questions about the applicability of tariff duties to, and the
          rate of duties on, the cement.  The office responsible for such
          questions is the Classification and Value Division in the New
          York Region of Customs.  The mailing address of that office is:

                    Assistant Area Director (C & V)
                    U.S. Customs Service
                    6 World Trade Center, Room 473
                    New York, New York 10048-0945

          FACTS:

              You state that you represent a client who may manufacture
          Portland cement in the United States Virgin Islands.  You request
          a ruling on two alternatives.  In the first, raw materials would
          be purchased in the continental United States and shipped from a
          United States port to the Virgin Islands where they would be

















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          manufactured into Portland cement.  The cement would then be
          transported back to the continental United States for marketing.
          You ask whether the raw materials and the cement may be trans-
          ported in foreign vessels from the continental United States to
          the Virgin Islands and from the Virgin Islands to the United
          States, respectively, and about tariff duties on the cement.

              In the second alternative, the raw materials would be
          purchased in foreign countries and transported in foreign vessels
          to the Virgin Islands where they would be manufactured into Port-
          land cement.  The cement would then be transported to the conti-
          nental United States for marketing.  You ask whether the cement
          may be transported in foreign vessels from the Virgin Islands to
          the United States and about tariff duties on the cement.

          ISSUES:

              1.  May raw materials be transported in non-coastwise-
          qualified vessels from the continental United States to the Unit-
          ed States Virgin Islands when the raw materials are manufactured
          or processed in the Virgin Islands into Portland cement which is
          transported back to the continental United States?

              2.  May Portland cement be transported in non-coastwise-
          qualified vessels from the United States Virgin Islands to the
          continental United States when the Portland cement was manufac-
          tured or processed in the Virgin Islands from raw materials which
          were transported from the continental United States to the United
          States Virgin Islands?

              3.  May Portland cement be transported in non-coastwise-
          qualified vessels from the United States Virgin Islands to the
          continental United States when the Portland cement was manufac-
          tured or processed in the Virgin Islands from raw materials which
          were transported to the Virgin Islands from foreign countries?

          LAW AND ANALYSIS:

              Section 27 of the Act of June 5, 1920, as amended (41 Stat.
          999; 46 U.S.C. App. 883, often called the Jones Act), provides
          that:

                    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 ...), between points in the United States ...
                    embraced within the coastwise laws, either directly or
                    via a foreign port, or for any part of the













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                    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 ....

              Section 21 of the Act of June 5, 1920 (41 Stat. 997; 46
          U.S.C. App. 877), provides that:

                    ... the coastwise laws of the United States shall not
                    extend to the Virgin Islands of the United States until
                    the President of the United States shall, by proclama-
                    tion, declare that such coastwise laws shall extend to
                    the Virgin Islands and fix a date for the going into
                    effect of the same.

          No such proclamation has been issued by the President.
          Accordingly, the coastwise laws, including 46 U.S.C. App. 883,
          are not applicable to the United States Virgin Islands.

              Section 4.80b(a), Customs Regulations (19 CFR 4.80b(a)) (see
          also, American Maritime Association v. Blumenthal, 590 F. 2d 1156
          (1978), cert. den. 441 U.S. 943, concerning the applicability of
          46 U.S.C. App. 883 to the transportation of oil from Alaska to
          the Virgin Islands where the oil was refined and after which the
          refined oil products were transported onward to other points in
          the continental United States), promulgated under the authority
          of section 883, provides that:

                    ... 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.

              Because the coastwise laws are inapplicable to the Virgin
          Islands, they would not prohibit the use of a non-coastwise-
          qualified vessel, including a foreign vessel, to transport Port-
          land cement manufactured in the Virgin Islands from raw materials
          brought to the Virgin Islands from foreign countries.  Unless the
          manufacturing or processing in the Virgin Islands is such that
          the Portland cement is a "new and different" product from the raw
          materials brought to the Virgin Islands, 46 U.S.C. App. 883 would
          prohibit the transportation in a non-coastwise-qualified vessel
          of raw materials from the continental United States to the Virgin
          Islands if the raw materials were manufactured into Portland













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          cement in the Virgin Islands and then transported back to the
          continental United States.  Section 883 would also prohibit the
          transportation in a non-coastwise-qualified vessel of the Port-
          land cement manufactured in the Virgin Islands from the raw mate-
          rials transported to the Virgin Islands from the continental
          United States, unless, as stated above, the manufacturing or
          processing in the Virgin Islands is such that the Portland cement
          is a new and different product from the raw materials brought to
          the Virgin Islands.

              You have not provided us with enough information to enable us
          to issue a ruling on whether the manufacturing or processing in
          the Virgin Islands results in the raw materials brought there be-
          ing manufactured or processed into a new and different product.
          In order to issue such a ruling, we would need a complete
          description of the raw materials transported from the continental
          United States to the Virgin Islands and of the Portland cement
          transported back to the continental United States, as well as a
          complete description of the manufacturing or processing proce-
          dures in the Virgin Islands.  We suggest that you review the
          Court's decision in the AMA v. Blumenthal decision to assist you
          in determining what information we will need, and what arguments
          you want to make, if you decide to request a ruling on this
          issue.

          HOLDINGS:


              1.  Raw materials may not be transported in non-coastwise-
          qualified vessels from the continental United States to the Unit-
          ed States Virgin Islands when the raw materials are manufactured
          or processed in the Virgin Islands into Portland cement which is
          transported back to the continental United States, unless the
          manufacturing or processing in the Virgin Islands is such that
          the Portland cement is a "new and different" product from the raw
          materials.

              2.  Portland cement may not be transported in non-coastwise-
          qualified vessels from the United States Virgin Islands to the
          continental United States when the Portland cement was manufac-
          tured or processed in the Virgin Islands from raw materials which
          were transported from the continental United States to the United
          States Virgin Islands, unless the manufacturing or processing in
          the Virgin Islands is such that the Portland cement is a "new and
          different" product from the raw materials.
















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              3.  Portland cement may be transported in non-coastwise-
          qualified vessels from the United States Virgin Islands to the
          continental United States when the Portland cement was manufac-
          tured or processed in the Virgin Islands from raw materials which
          were transported to the Virgin Islands from foreign countries.

                                        Sincerely,




                                        B. James Fritz
                                        Chief
                                        Carrier Rulings Branch