Published April 27, 2012 by

Exporting Carbon Fiber Products from the United States

As a subscriber to Bureau of Industry and Security (BIS) email notifications, I received a letter about two entities being charged with attempt (conspiracy) to export carbon fiber.  The letter is reproduced below.  I would like to draw LawCustoms guests attention not to the penalty details, but to the extent of export control regime related to carbon fibers in the civil industrial context.  More specifically, to the finished product being exported made of controlled carbon fiber. The centerpiece of the charge was the Export Control Classification Number (ECCN) 1C210, which provides for certain “fibrous or filamentary material.”  We know that because 1C210 is in the “C” product group, it deals with materials, rather than the finished product which is usually provided in the “A” product group.  See e.g.  BIS’s Export Control Basics overview.  The relevant ECCN in “A” group is 1A002, which provides for “Composite” structures or laminates wich certain characteristics.  Provided that the characteristics are there, Note 2 to ECCN 1A002 provides an exception: “1A002 does not control finished or semi-finished items, specially designed for purely civilian applications as follows: (a) sporting goods; (b) automotive industry; (c) machine tool industry; (d) medical applications.”  This means that if the otherwise qualified item is used in any other…

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Product Regulation U.S. Federal Agencies

Bureau of Industry and Security ECCN 1A002 ECCN 1C210 Export Administration Regulations Food Products Industrial Products Oil & Gas Products

Published December 13, 2011 by

Useful Links: Oil & Gas Industry

Drillopedia Compressed Air Glossary of Terms (by Pneumatic Source) Dictionary of Mining, Mineral, and Related Terms (Hacettepe University Department of Mining Engineering) Oilwell-Tools.com Oil Drilling (howstuffworks) Oil & Gas Drilling & Servicing e-Tool (OSHA) Schlumberger Oilfield Glossary

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Product Regulation Useful Links

Oil & Gas Products

Published December 10, 2011 by

Classification Principles: Whether the product is a “Drilling Part” of “Downhole Part” (8431.43 v. 8479.89)

When the equipment parts have downhole applications, they are to be classified as a boring or sinking machinery (8431.43…) only if these parts are directly related (emphasis added) to the function / facilitation of boring or sinking.  Otherwise, they are to be classified as downhole equipment under 8479.89. N076953 (Machinery for fishing, coring, washover… is 8479.89, machinery for facilitation of drilling is 8431.43); N072426 (Machinery used in production phase, post drilling phase, extraction phase is not “boring or sinking machinery” under 8431.43, but rather downholle machinery under 8479.89); N084298 (casing hangers / bracket supports designed to fit on a wellhead in order to suspend the weight of casing strings in the well, although used in wells, are associated with well boring or sinking but rather well casing – 8479.89 therefore applies); N018132 (Liner hangers used during the drilling process to join casing to liner are not pars of drilling machinery but are components of well completion process, thus 8479.89 applies); I888206 (Crossover subs are part of the drilling process, thus classified as a part of the drilling machinery under 8431.43)

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Product Regulation

Harmonized Tariff Schedule Classification HTS Heading 8431 HTS Heading 8479 Oil & Gas Products

Published December 8, 2011 by

Classification Principles: Whether the product is a “Part of Offshore Platform” or is classified elsewhere (8431.43.40 v. other)

Product Regulation

Harmonized Tariff Schedule Classification HTS Heading 8431 Oil & Gas Products

Published March 25, 2009 by

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…

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Product Regulation U.S. Federal Agencies

Customs and Border Protection Harmonized Tariff Schedule Classification HTS Heading 8431 Oil & Gas Products

Published February 18, 2009 by

Exports to International Waters (vessels, buoys, offshore iinstallations)

I highly reccomend to review news posted by Douglas N. Jacobson. Yersterday, Mr. Jacobson recited Census Bureau memorandum called FTR Letter No. 3. Several issues worth noting and for some of us revisiting. First, the AES filers must utilize new “IW” export information code. Second, if one exports BIS licensed commodity, filer must use country of destination and ultimate consignee as indicated on that license. Third, if one exports non-BIS licensed commodity, then filer must use “nationality of the person(s) or entity assuming control of the item(s).” Lastly, AES filers are to report only those commodities that are valued over $2500 / Shedule B and/or those commodities that are subject to license (regardless of value).

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U.S. Federal Agencies

Automated Export System Bureau of Industry and Security Census Bureau Oil & Gas Products

Published September 11, 2008 by

Scope of License Exception AVS (drilling rigs/platforms)

For the purposes of 15 CFR 740.15, do offshore oil drilling rigs / platforms qualify as Vessels? Offshore drilling rigs and platforms do not constitute “vessels” for the purposes of License Exception AVS eligibility, as described in Section 740.15 of the Export Administration Regulations (EAR) (15 CFR Parts 730-774). The items that are eligible for export or reexport under License Exception AVS are, for the most part, those necessary for the proper operation (e.g., propulsion, navigation) of an aircraft or vessel or those intended for use as plane or ship stores. The scope of items that may be necessary for the proper operation of an offshore drilling rig or platform (even one that is self-propelled) might well include platform stabilization and drilling or oil exploration equipment that would go well beyond the scope of items contemplated under License Exception AVS as eligible for export/reexport to, or on board, vessels and aircraft. For additional information on the EAR requirements described in this e mail, you may wish to view the EAR on-line, at: www.access.gpo.gov/bis/index.html. Should you have additional questions about the requirements in the EAR, you may wish to contact the Outreach and Educational Services Division, at: (202) 482-4811.

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U.S. Federal Agencies

Bureau of Industry and Security Export Administration Regulations Oil & Gas Products

Published September 11, 2008 by

Scope of ECCN 2B999.g controls

This inquiry concerns control 2B999.g of the Commerce Control List. Specifically, the list provides for 304 and 316 stainless steel valves, piping, tanks and vessels. One possible interpretation of the control is that the whole product in its entirety must be made from 304 or 316 stainless steel. Another possible interpretation of the control is that only those products that contain 304 or 316 stainless steel that perform essential function of the product (e.g. inner part of the piping that comes into direct control with the liquid or gas; valve that is made from bronze, but contains 316 stainless steel parts such as butterfly disc). The BIS position on the 2B999.g? The ECCN 2B999.g controls on 304 and 316 stainless steel valves, piping, tanks and vessels should be interpreted consistent with the controls on chemical manufacturing equipment described in ECCN 2B350. Therefore, if all surfaces of the valves, piping, tanks and vessels that come in direct contact with the chemical(s) being processed or contained are made from 304/316 stainless steel, they would be controlled under 2B999.g — in this instance, the entire item would not have to be made of 304/316 stainless steel in order for it to be controlled…

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Product Regulation U.S. Federal Agencies

Bureau of Industry and Security ECCN 2B350 ECCN 2B999 Export Administration Regulations Industrial Products Oil & Gas Products

Published August 8, 2008 by

Actuator

Actuator may be, prima facie, a part of the valve with which it is used, but actuators for valves, imported / exported separately are not provided in the valve heading 8481. Actuator is a gear assembly and is more specifically provided in heading 8483. Actuator, when presented separately, is 8483.40.5010 HTSUS or 8483.40.4010 Schedule B, which provides for fixed ratio speed changers Source: N025719

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Product Regulation

Harmonized Tariff Schedule Classification HTS Heading 8483 Industrial Products Oil & Gas Products Schedule B

Published August 8, 2008 by

Internal Blowout Pressure Valve (IBOP)

An IBOP is typically a ball valve or other type of valve that is connected in line with the drills string. It can be closed to isolate the kick inside the drill string. Because an IBOP and its associated actuator is connected in line with the drill string, it will rotate with the drill string during drilling operations. Typically, IBOP’s are pneumatically powered. The air source, typically a pressurized cylinder, is generally stationary. Thus, the challenge is to get the air power from the stationary source to the rotating IBOP actuator. It is noted that often drilling is stopped before the IBOP is actuated, but for safety reasons, the IBOP must be connected to an air supply at all times during drilling operations. Source

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Product Regulation

Oil & Gas Products