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Home > 2009 > March > 25 > Blowout Preventer Valves (BOPs)
Published March 25, 2009 by Yuri Starikov

Blowout Preventer Valves (BOPs)

The CBP decision in HQ H007677 regarding blowout preventers (BOP) is another example to the oilfield industry that customary practices of using “blanket” HTS for all of its products, such as 8431.43 (parts of offshore oil and natural gas drilling and production platforms; parts of oil and gas filed machinery) may not always work. At least in those situations where duty is involved.

The counsel tried really hard to persuade CBP that BOP is actually a part of the entire blowout preventer control system that is part of boring machinery (8431.43 / Duty Free). And it succeeded on the merits. CBP agreed thatt “BOPs are integral constituent component of oil and gas drilling activity and are in fact “parts” desinged for use therein. Counsel’s argument, however, did not survive procedural scrutiny. Counsel cited Mitsibishi v. US, 22 F.3D 1102 (CAFC 1993), where slag box was found to be integral part of casting machine despite the fact that it was not involved in the casting process. While analagy parallels the issue, the thrust of the argument needed to focus on why Section XVI Note 2(a) should not be dispositive. Citing legal notes and expanatory text, CBP held that BOPs are appropriately classifed as valves.

Legal Principles

While the product may be regarded as a part of another product, it is to be classified in its own heading as specified under Section XVI legal note 2(a)

Once classification has been determined according to Note 2(a), there is not need to consider classifcation under remaining notes (Nidec Corp. v. US)

Section XVI Note 2(a)

Parts which are goods included in any of the headings of chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings

To support its proposition that “the oil and gas industry widely regards blowout preventers as a system of large valves,” CBP relied on the following sources:

Schlumberger Oilfield Glossary
http://www.glossary.oilfield.slb.com

Lexicon of Oil & Gas Terms
http://www.maverickenergy.com

HowStuffWorks
http://www.howstuffworks.com/oil-drilling.htm

OSHA
http://www.osha.gov/SLTC/etools/oilandgas/index.html

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