83 FR 62328 - Notice of Issuance of Final Determination Concerning Certain Jet Fuel

DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection

Federal Register Volume 83, Issue 232 (December 3, 2018)

This document provides notice that U.S. Customs and Border Protection (``CBP'') has issued a final determination concerning the country of origin of certain jet fuel. Based upon the facts presented, CBP has concluded that the country of origin of this jet fuel is India for purposes of U.S. Government procurement.

[Federal Register Volume 83, Number 232 (Monday, December 3, 2018)]
[Notices]
[Pages 62328-62329]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-26168]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Certain Jet 
Fuel

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of final determination.

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SUMMARY: This document provides notice that U.S. Customs and Border 
Protection (``CBP'') has issued a final determination concerning the 
country of origin of certain jet fuel. Based upon the facts presented, 
CBP has concluded that the country of origin of this jet fuel is India 
for purposes of U.S. Government procurement.

DATES: The final determination was issued on November 23, 2018. A copy 
of the final determination is attached. Any party-at-interest, as 
defined in 19 CFR 177.22(d), may seek judicial review of this final 
determination within January 2, 2019.

FOR FURTHER INFORMATION CONTACT: Teresa M. Frazier, Valuation and 
Special Programs Branch, Regulations and Rulings, Office of Trade (202) 
325-0139.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on 11/23/18, 
pursuant to subpart B of Part 177, U.S. Customs and Border Protection 
Regulations (19 CFR part 177, subpart B), CBP issued a final 
determination concerning the country of origin of certain jet fuel, 
which may be offered to the U.S. Government under an undesignated 
government procurement contract. This final determination, HQ H272678, 
was issued under procedures set forth at 19 CFR part 177, subpart B, 
which implements Title III of the Trade Agreements Act of 1979, as 
amended (19 U.S.C. 2511-18). In the final determination, CBP concluded 
that the processing in India results in a substantial transformation. 
Therefore, the country of origin of the jet fuel is India for purposes 
of U.S. Government procurement. Section 177.29, CBP Regulations (19 CFR 
177.29), provides that a notice of final determination shall be 
published in the Federal Register within 60 days of the date the final 
determination is issued. Section 177.30, CBP Regulations (19 CFR 
177.30), provides that any party-at-interest, as defined in 19 CFR 
177.22(d), may seek judicial review of a final determination within 30 
days of publication of such determination in the Federal Register.


[[Page 62329]]


    Dated: November 23, 2018.
Alice A. Kipel,
Executive Director,Regulations and Rulings, Office of Trade.
H292678

November 23, 2018

OT:RR:CTF:VS H292678 TMF

CATEGORY: Origin

Patrick Devaney, Director
ANOI, Inc.
111 W. Ocean Blvd, Suite 1590
Long Beach, CA 90802

Re: U.S. Government Procurement; Country of Origin of Jet Fuel; 
Title III, Trade Agreements Act of 1979 (19 U.S.C. Sec.  2511, et 
seq.); Subpart B, Part 177, CBP Regulations
Dear Mr. Devaney:

    This is in response to your letter dated December 2, 2017, 
requesting a final determination, on behalf of your company, ANOI, 
Inc., concerning the country of origin of certain jet fuel pursuant 
to subpart B of Part 177 of the U.S. Customs and Border Protection 
(``CBP'') Regulations (19 C.F.R. Sec.  177.21 et seq.). ANOI, Inc., 
submitted an electronic ruling request to the National Commodity 
Specialist Division (``NCSD'') which was sent to our office.
    We note that Anoi is a party-at-interest within the meaning of 
19 C.F.R. Sec.  177.22(d)(1) and is entitled to request this final 
determination.

FACTS:

    Anoi, Inc. produces jet fuel (identified as JP5) in India from 
U.S. or Mexican petroleum crude oil. The JP5 is intended to be sold 
to the U.S. Defense Logistics Agency (``DLA'') in a solicitation 
that requires compliance with the Trade Agreements Act of 1979 
(``TAA''). In your submission, you state that an intermediate grade, 
western Texas and/or Mexican oil will be imported to the Reliance 
Refinery in Jamnagar, India. At the refinery, you state that ``there 
will be a `one-step' transformation of crude to straight-run 
distillate.'' The process consists of desalting and heating the 
crude, and then distilling out the sulfur from the middle distillate 
kerosene with the use of a Merox Oxidation unit that removes the 
sulfur from the kerosene jet fuel. DLA also requires certain 
additives to achieve JP5 jet fuel MILSPEC.

ISSUE:

    What is the country of origin of the JP5 jet fuel for purposes 
of U.S. Government procurement?

LAW AND ANALYSIS:

    CBP issues country of origin advisory rulings and final 
determinations as to whether an article is or would be a product of 
a designated country or instrumentality for the purposes of granting 
waivers of certain ``Buy American'' restrictions in U.S. law or 
practice for products offered for sale to the U.S. Government, 
pursuant to subpart B of Part 177, 19 C.F.R. Sec.  177.21 et seq., 
which implements Title III of the Trade Agreements Act of 1979, as 
amended (19 U.S.C. Sec.  2511 et seq.).
    Under the rule of origin set forth under 19 U.S.C. Sec.  
2518(4)(B):

An article is a product of a country or instrumentality only if (i) 
it is wholly the growth, product, or manufacture of that country or 
instrumentality, or (ii) in the case of an article which consists in 
whole or in part of materials from another country or 
instrumentality, it has been substantially transformed into a new 
and different article of commerce with a name, character, or use 
distinct from that of the article or articles from which it was so 
transformed.

See also 19 C.F.R. Sec.  177.22(a).

    A substantial transformation occurs when an article emerges from 
a process with a new name, character, and use different from that 
possessed by the article prior to processing. A substantial 
transformation will not result from a minor manufacturing or 
combining process that leaves the identity of the article intact. 
See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); and 
National Juice Products Ass'n v. United States, 628 F. Supp. 978 
(Ct. Int'l Trade 1986).
    You claim that the country of origin is either the United States 
or Mexico for two reasons. First, you state that the source of crude 
is ``an embargo issue for feedstock in the Solicitation.'' Second, 
you claim there is no ``double transformation'' as in CBP 
Headquarters Ruling Letters (``HQ'') 555032, dated September 23, 
1988 and HQ 562387, dated July 30, 2002, because the processes in 
those situations involved ``old technology''/mixture-based processes 
that consisted of hydro-desulfurization, platformers and naptha-
blends. However, in this case, ANOI, Inc. proposes to refine, by the 
process of distillation, and additional processes, U.S. or Mexican 
origin, petroleum crude oil at the Reliance Petroleum Refinery in 
Jamnagar, India into U.S. JP5 specification jet fuel. You state that 
a ``straight-run'' process occurs because it uses a Merox filter 
unit that involves no chemical mixing except for inclusion of the 
JP5 additive, which is required by DLA. Accordingly, you claim no 
substantial transformation occurs in India.
    In this case, we find the JP5 specification jet fuel is clearly 
a new and different article with a new name, character, and use from 
that of the petroleum crude oil from which it was refined. Although 
there may be no double substantial transformation, the process to 
create jet fuel from straight crude oil to straight-run distillate 
still involves desalting and the application of heat distillation 
coupled with the utilization of the Merox Oxidation unit to remove 
sulfur, which results in the creation of jet fuel. According to our 
Laboratories and Scientific Services Directorate, the petroleum 
crude oil is substantially transformed into JP5 by the petroleum 
refining process of distillation. This finding is consistent with 
our decision in HQ 555032, where a first substantial transformation 
was found to occur after distillation. Therefore, we find the 
country of origin of the produced JP5 will be the country in which 
the substantial transformation (distillation) occurs, namely India.

HOLDING:

    Based upon the specific facts of this case, the country of 
origin of the JP5 jet fuel for purposes of U.S. Government 
procurement will be India.
    Notice of this final determination will be given in the Federal 
Register, as required by 19 C.F.R. Sec.  177.29. Any party-at-
interest other than the party which requested this final 
determination may request, pursuant to 19 C.F.R. Sec.  177.31, that 
CBP reexamine the matter anew and issue a new final determination. 
Pursuant to 19 C.F.R. Sec.  177.30, any party-at-interest may, 
within 30 days of publication of the Federal Register Notice 
referenced above, seek judicial review of this final determination 
before the Court of International Trade.

    Sincerely,

Alice A. Kipel,
Executive Director, Regulations & Rulings, Office of Trade.

[FR Doc. 2018-26168 Filed 11-30-18; 8:45 am]
 BILLING CODE 9111-14-P