CLA-2 CO:R:CV:G: 084959 JLV (NY 841222)
Steven B. Lehat, Esq.
Sheldon & Mak
201 South Lake Avenue, Suite 800
Pasadena, California 91101
RE: Offshore drilling and production platform jacket
Dear Mr. Lehat:
In a letter of May 12, 1989, as supplemented in part by a
letter of May 25, 1989, you request on behalf of your client,
Hyundai Heavy Industries Co., Ltd., a ruling on the tariff
classification of offshore platform jackets, main piles, and
certain "shiploose" articles for two offshore platforms, the
Harmony and Heritage. The classification of this merchandise
was addressed in our ruling of September 15, 1989 (file
085145), copy enclosed. This decision, however, addresses the
issue concerning the classification of the jacket as a vessel.
FACTS:
Each jacket is a one-piece construction described as an
8-legged, pile founded structure for the support of an
offshore drilling and production platform. It is X-braced and
contains pre-installed curved conductors, conductor guides,
and other structural components necessary to complete the
structural integrity of the jacket. The jacket will support
the topside components and the machinery for the drilling and
production operations.
The jackets are transported by barge to location. Each
jacket contains instrumentation and flotation devices in the
legs to permit controlled submersion. The legs and skirt pile
sleeves are designed with "buoyancy" compartments which will
allow the jacket to float in a more or less horizontal
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position after it slides off the barge. The controlled
submerging is performed by selective flooding of these
compartments so that the jacket is positioned vertically at
the desired location. Once the jacket is positioned, the main
piles (which also contain closure diaphragms to reduce the
load until driven into the seabed) are driven through the legs
to permanently anchor and complete the structural base for the
offshore platform.
You suggest that the jackets possess the essential
character of submersible production platforms and, therefore,
are classified as submersible platforms in subheading
8905.20.00, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA), and dutiable at a free rate. You reach
this conclusion because the jackets meet the description of
"submersible platforms" in the Explanatory Notes (EN) for
heading 8905: they float, can be towed, are submerged by
controlled flooding of the legs, and have piles which
penetrate more or less deeply into the seabed.
ISSUE:
Are the platform jackets classifiable under the HTSUSA as
submersible platforms?
LAW AND ANALYSIS:
The relevant language in EN 89.05(C) is as follows:
(C) Floating or submersible drilling or
production platforms.
Such platforms are generally designed
for the discovery or exploitation of off-shore
deposits of oil or natural gas. Apart from
the equipment required for drilling or
production, such as derricks, cranes, pumps,
cementing units, silos, etc., these platforms
have living quarters for the personnel.
These platforms, which are towed or in
some cases self-propelled to the exploration
or production site and are sometimes capable
of being floated from one site to another, may
be divided into the following main groups:
* * * * * *
(2) Submersible platforms, the substructures
of which are submerged over the work sites
with their ballast tanks resting on the sea
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bed in order to provide a high degree of
stability to the working platform which is
kept above the water level. The ballast tanks
may have skirts or piles which penetrate more
or less deeply into the sea bed.
* * * * * *
Fixed platforms used for the discovery or
exploitation of off-shore deposits of oil or
natural gas, which are neither floating nor
submersible, are excluded from this heading
(heading 84.30).
The mere fact that the jackets in issue are capable of
flotation and, if so desired, could be towed to location, is
not sufficient evidence that the jackets are submersible
platforms. The description of a submersible platform
addresses an article that is complete with topside or working
platform components. There is no evidence that the jackets in
issue, when completed in this manner, are designed with
"ballast" tanks that would permit them to be towed to
location. The design of the "tanks" in the legs and skirts is
to permit the jackets alone to be positioned and subsequently
fixed to a location. In fact, once the jackets are lowered,
the "ballast" tanks become non-existant, and the construction
of the topside components takes place.
The design, construction, and function of each jacket are
that of a base for a fixed, offshore drilling and production
platform. This type of offshore platform is excluded from
classification in heading 8905.
HOLDING:
The jackets are not submersible platforms. They are
properly classified as structures in subheading 7308.90.90,
HTSUSA. Our ruling letter of September 15, 1989 (file
085145), is affirmed on the classification of these jackets.
Sincerely,
John Durant, Director
Commercial Rulings Division
Enclosure
6cc: AD NY Seaport
2cc: Chief, CIE
1cc: Director, Trade Ops.
1cc: AC, CO
1cc: Durant
1cc: Reading File
1cc: Chief, Carrier Rulings
1cc: NIS Paula Ilardi
LIBRARY: valentin
FILE NAME: 084959