ENT-5-01 RR:IT:EC 116429 TLS
Mr. David Becnel
G.A. Becnel, Inc.
P.O. Box 1226
Lake Charles, Louisiana 70602
RE: Entry procedures; Natural Gas; Time of Entry; 19 CFR 141.68.
Dear Mr. Becnel: This is in response to your letter, dated March 16, 2005, requesting a ruling, on behalf of Excelerate Energy, concerning the time of entry of natural gas pursuant to section 141.68, U.S. Customs and Border Protection (CBP) Regulations (19 CFR 141.68).
Your request also seeks the proper classification of the natural gas under the Harmonized Tariff Schedule of the United States Annotated. That part of your request has been referred to our National Import Specialists’ office in New York. That office will address the classification issue and will respond to you via a separate correspondence. You also inquire as to the applicability of the Harbor Maintenance Fee (HMF), a matter within the purview of the Duty and Refund Determination Branch of this office. Having consulted with that branch on that matter, we will include their response in this ruling letter. FACTS:
Excelerate Energy will import natural gas using four different vessels over the course of the next few months. The natural gas will be discharged into an “STL buoy apparatus,” via a tether to an undersea pipeline system. The buoy is located 168 miles due south of Lake Charles, Louisiana in the Gulf of Mexico, at a “deepwater port” (DWP). You claim that the proposed system for importing the natural gas is a new one, considering that the natural gas will be transported on the vessels as liquefied natural gas (LNG) before being converted back to a gaseous state on board the vessels before it is off-loaded into three pipelines. The pipelines will make landfall at Y-closky, Pecan Island, and Erath, Louisiana. All three localities are located within the Morgan City, Louisiana CBP port geographical jurisdiction. You note that LNG is currently imported at traditional land-based ports to shore tanks in its liquid state.
You request that we determine that the proper time of entry pursuant to section 141.68 is when the first molecule of re-gasified gas passes into the STL buoy, and that the Automated Manifest System (AMS) arrival date be deemed the same as the commencement of discharge date. As noted above, you also request that the port of entry for the imported natural gas be deemed the Morgan City CBP port. You further request that the cargo offloaded at the DWP be exempted from an HMF under 19 CFR 24.24.
ISSUES:
1. What is the designated port of entry for merchandise entered from the subject DWP? 2. Pursuant to 19 CFR 141.68, when is the time of entry established under the proposal as outlined above?
3. Whether or not the HMF is applicable to commercial cargo loaded or unloaded at the subject DWP. LAW AND ANALYSIS:
A “deepwater port” is defined as such:
…any fixed or floating manmade structures other than a vessel, or any group of such structures, located beyond the territorial sea and off the coast of the United States and which are used or intended for use as a port or terminal for the loading or unloading and further handling of oil for transportation to any State, except as otherwise provided in [33 U.S.C. § 1552]. The term includes all associated components and equipment, including pipelines, pumping stations, service platforms, mooring buoys, and similar appurtenances to the extent they are located seaward of the high water mark…. 33 U.S.C. § 1502(10).
The term “oil” is defined as “petroleum, crude oil, and any substance refined from petroleum or crude oil.” 33 U.S.C. § 1502(14). The term “natural gas” is generally defined as a mixture of hydrocarbon gases that occurs with petroleum deposits underneath the earth’s surface. See, e.g., Webster’s II New Riverside University Dictionary 785 (1984); Webster’s New International Dictionary 1507 (1993). While it is not within CBP’s purview to determine the eligibility for a license to operate a deepwater port, we note that a DWP may not be utilized for the transshipment of commodities other than oil to the United States. See 33 U.S.C. § 1503(a)(2). Therefore, this ruling does not confer any such rights upon any party that might have an interest in operating a DWP for any purpose, including the transshipment of commodities, other than oil.
With that stated, we note that the CBP laws, provided for under Title 19 of the United States Code, are specifically made inapplicable to DWPs, except that foreign articles used for construction of the DWP are subject to duties as if imported for consumption into the United States, and merchandise imported from the DWP is also subject to duties and taxes like other merchandise imported into the CBP territory. See 33 U.S.C. § 1518(d); 19 U.S.C. § 1644(b). (Sections 1518(d) and 1644(b) do not apply, however, to the coastwise laws under Title 46 of the United States Code that CBP administers. See CBP Ruling 115293 (March 7, 2001)).
Under 19 CFR 141.68, a time of entry is established in many different ways, among them being the following:
(a) When entry documentation is filed without any entry summary…
(1) The time the appropriate [CBP] officer authorizes the release of the merchandise or any part of the merchandise covered by the entry documentation, or
(2) The time the entry documentation is filed, if requested by the importer on the entry at the time of filing, and the merchandise already has arrived within the port limits; or
(3) The time the merchandise arrives within the port limits, if the entry documentation is submitted before arrival, and if requested by the importer on the entry documentation at the time of submission. (Emphasis added.)
In determining the time of entry of the natural gas under the proposed scenario, we must determine when the natural gas has arrived within the port limits pursuant to 19 CFR 141.68 (release of merchandise by a CBP officer cannot take place, of course, before the merchandise has arrived at the port). Pursuant to 19 CFR 101.1, a port of entry is “any place designated by Executive Order of the President, by order of the Secretary of [Homeland Security], or by Act of Congress, at which a [CBP] officer is authorized to accept entries of merchandise to collect duties, and to enforce the various provisions of the [CBP] and navigation laws.” Further pursuant to 19 CFR 101.1, a port of entry incorporates the geographical area under the jurisdiction of the port director.
The geographical limits of the Morgan City, Louisiana CBP port are described in T.D. 84-126 (July 2, 1984) and T.D. 94-77 (November 4, 1994). Given the description of the Morgan City CBP port provided therein, the subject DWP is located outside of that port’s geographical limits. For that matter, the DWP is located outside of the customs territory of the United States, which “includes only the States, the District of Columbia, and Puerto Rico.” 19 CFR 101.1. As noted above, however, the pipelines from the DWP make landfall within the Morgan City port limits.
In light of such, the time of entry of the natural gas at issue may be deemed as the moment when it physically arrives within the Morgan City CBP port limits, provided that the importer has submitted proper entry documentation before such arrival and requests that the time coincides with arrival in accordance with 19 CFR 141.68(a)(3). Alternatively, of course, by following the procedures in 19 CFR 141.68(a)(2), the importer may request the time of filing of the entry documentation as the time of entry in those cases where the gas has already arrived within the port limits. If the importer makes no request under either of the above provisions, the time of entry will be the time the CBP officer authorizes release pursuant to 19 CFR 141.68. The arrival date will be noted in the AMS as the date when the natural gas physically arrives within the Morgan City CBP Port limits.
With regard to the applicability of the HMF at the subject DWP, CBP has not applied HMF to cargo loaded and unloaded at privately owned DWPs. In fact, 19 CFR 24.24(b)(1), defines a “port” as any channel or harbor in the [CBP] territory which is… open to public navigation and at which Federal funds have been used since 1977 for construction, maintenance, or operation. Thus, to the extent the DWP in this case is privately owned and is not a port as defined in 19 CFR 24.24(b)(1), any cargo loaded and unloaded at the facility will not be subject to an HMF.
HOLDINGS:
1. The port of entry for the natural gas that will be imported as described above will be the Morgan City, Louisiana CBP port.
2. The time of entry of the natural gas that will be imported as described above will be established at the moment when the natural gas physically arrives within the Morgan City CBP port limits through the pipelines, in conjunction with the importer meeting the requirements of 19 CFR 141.68. The date of arrival to be recorded in the Automated Manifest System will be established at that same moment.
3. The HMF, as provided under 19 CFR 24.24, is not applicable to cargo loaded or unloaded at the deepwater port at issue.
Sincerely,
Glen E. Vereb
Chief
Entry Procedures and Carriers Branch