Newly Released CBP HQ Rulings Jan. 26

January 30, 2024 by Noah Garfinkel|Customs Rulings

The Customs Rulings Online Search System (CROSS) was updated Jan. 26 with the following headquarters ruling (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):

H332949: 46 U.S.C. § 55102; 19 C.F.R. § 4.80b; Coastwise Transportation

Ruling: The proposed transactions would not violate the Jones Act.

Issue: Would the proposed transportations of liquified natural gas (LNG) violate the Jones Act, 46 U.S.C. § 55102?

Item: The client proposes to load LNG onto a foreign-flagged vessel and then discharge the LNG outside the three-mile territorial sea limit, either at an LNG terminal in Guantanamo Bay, Cuba, or other foreign ports, or to either U.S.-flagged or foreign-flagged vessels via ship-to-ship (“STS”) bunkering while located outside the U.S. three-nautical mile territorial sea. The STS bunkering will occur in U.S. Coast Guard-approved locations, such as Port Canaveral, Florida; Jacksonville, Florida; Savannah, Georgia; or Calcasieu Pass, Louisiana; or in a designated lightering area beyond the U.S. three-nautical mile territorial sea, including designated lightering areas in the Gulf of Mexico, such as the Galveston Offshore Lightering Area, as well as other locations, or in foreign waters.

Reason: Guantanamo Bay, Cuba, is not a U.S. coastwise point. Therefore, transportation of LNG between a U.S. coastwise point and Guantanamo Bay, Cuba, wouldn't violate the Jones Act. Similarly, transportation of LNG aboard a foreign-flagged vessel from a U.S. port to foreign ports wouldn't violate the coastwise laws, if there is no further carriage of the LNG to a coastwise point. The LNG in this case would be considered merchandise for the foreign-flagged vessel that discharges the LNG onto the receiving vessels. That's because the LNG would not be used as fuel for that vessel but would be transported from a U.S. coastwise point to the receiving vessels at Guantanamo Bay, Cuba, other foreign ports or outside the U.S. 3-nautical mile territorial sea. The LNG would be considered supplies for the receiving vessels pursuant to the above Treasury decision because it would be used as fuel for the receiving vessels, rather than fuel transported as cargo.

Ruling Date: Jan. 23, 2024