H325118

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H325118 August 21, 2023 VES-3-18-OT-RR:BSTC:CCR H325118 TNA CATEGORY: Carriers Ms. Laurie Pazzo Senior Import Specialist CEE-Electronics, Partnership Division U.S. Customs and Border Protection Charlotte, NC RE: Application for Further Review; 43 U.S.C. § 1333(a); 19 U.S.C. § 1434(a); 19 C.F.R. § 4.80b(a); Entry No. 101-6513644-1; Protest No. 1401-21-106406; Siemens Gamesa Renewable Energy, Inc. Dear Ms. Pazzo: This is in response to Protest and Application for Further Review (“AFR”) No. 1401-21-106406, timely filed on November 29, 2021, by Siemens Gamesa Renewable Energy, Inc. (“SGRE” or the “Protestant”) with respect to Entry No. 101-6513644-1. On or about May 3, 2022, your office forwarded the subject Protest and AFR for our review. Our determination is set forth below. FACTS SGRE protests U.S. Customs and Border Protection’s (“CBP’s”) liquidation of entries of certain wind-powered electric generators and other structures installed on the U.S. outer continental shelf (“OCS”) near the state of Virginia. The goods were entered under subheading 8502.31.0000 of the Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for, “Electric generating sets and rotary converters: Other generating sets: Wind powered,” and under subheading 7308.20.0020, which provides for, “Structures (excluding prefabricated buildings of subheading 9406) and parts of structures . . . of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel: Towers and lattice masts: Tubular, whether or not tapered, and sectional components thereof.” The subject merchandise was imported under Entry No. 101-6513644-1, which is dated June 15, 2020. The underlying protest relates to the installation of two wind turbine generators (“WTGs”) at an offshore location on the U.S. OCS, approximately 27 nautical miles from Virginia Beach, Virginia. The WTGs were constructed in two phases. First, a foreign-flag vessel transported the monopile foundation, transition piece and related construction material from Halifax, Nova Scotia, Canada, to the OCS installation site. The vessel then installed the monopile and transition piece to the seabed of the OCS. The foreign-flag construction vessel was held stationary while undertaking the emplacement of the monopile foundation and other components. According to documentation submitted by Protestant, as part of the project, scour protection was installed on the seabed before the monopile and transition piece were installed. In the second phase of the installation, which occurred approximately three weeks after the first phase, the same foreign-flag vessel attached a wind tower, nacelle and blades to the transition piece installed on top of the previously installed monopile base. On November 29, 2021, counsel for SGRE submitted written arguments in support of its protest. In addition, CBP held an in-person meeting with counsel for SGRE on January 11, 2023, and heard further arguments on behalf of SGRE. ISSUE: Whether the installation of the WTGs and other structures caused them to be attached to the seabed of the OCS such that entry and payment of duties were required for the subject merchandise. LAW AND ANALYSIS: Initially, we note that based upon the record provided, the subject Protest and Application for Further Review, was timely filed under the statutory and regulatory provisions for protests. See 19 U.S.C. § l514(a)(3); 19 CFR § 174.12(e). Additionally, further review of Protest 1401-21-106406 is properly accorded to the Protestant pursuant to 19 CFR §§ 174.24(c) and 174.25, as this protest involves matters previously ruled upon by the Commissioner of CBP or his designee or by the relevant courts, but facts are alleged or legal arguments presented which were not considered at the time of the original decision. In this regard, Protestant submits that CBP improperly determined the installation site to be a coastwise point. United States law generally applies to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline. 33 CFR § 2.22(a)(2). In addition, Section 4(a)(1) of the Outer Continental Shelf Lands Act of 1953 (“OCSLA”) (as amended), provides that the Constitution and laws and civil and political jurisdiction of the United States are extended to: the subsoil and seabed of the outer Continental Shelf; all artificial islands on the outer Continental Shelf; installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources, including non-mineral energy resources; or any such installation or other device (other than a ship or vessel) for the purpose of transporting or transmitting such resources. Protestant argues that there is “no need for entry and clearance” of the subject wind turbine generators because they were not installed at a coastwise point. Protestant further states that “CBP had no authority to require the entry of the goods included with Entry No. 101-6513644-1, and as such, no authority to liquidate the entry and assess duties and fees.” As such, this protest centers around the dutiability of this merchandise. CBP has long held that foreign merchandise delivered directly to OCS facilities to which federal law applies pursuant to the OCSLA is considered imported into the Customs territory of the United States, and is therefore subject to applicable entry and duty requirements. See, e.g., HQ 115431 (September 4, 2001). See also HQ 115134 (September 27, 2000) (“OSVs, regardless of flag, transporting passengers or merchandise between the FOSF vessel at its OCS location and foreign ports or offshore OCS platforms located beyond the territorial sea of the United States, are subject to Customs report of arrival, entry and clearance requirements if such OCS locations are coastwise points pursuant to the OCSLA.”); HQ 115535 (November 20, 2001) (finding subsea cables and umbilicals to be dutiable when attached to the platform structures of the subsea wells at issue.) Furthermore, CBP recognizes that the OCSLA contemplates construction activity to be part of the development of resources, such that an installation or structure need not be completed to be embraced by the OCSLA’s jurisdictional reach. See 43 U.S.C. § 1333(l). CBP has consistently determined that the OCSLA extends U.S. jurisdiction and laws - including the laws for assessment of customs duties - to those objects attached to the seabed for the purpose of exploring for, developing, producing, transporting or transmitting resources from the OCS, which includes non-mineral resources such as wind energy. See, e.g., HQ 115134 (September 27, 2000) (citing Treasury Decision (T.D.) 554281(1)); HQ 115535 (November 20, 2001). These laws similarly extend to installations or other devices permanently or temporarily attached to the seabed of the OCS for the purpose of exploring for, developing, or producing non-mineral energies such as wind energy. See, e.g., HQ H329630 (March 9, 2023); HQ H328865 (February 14, 2023); HQ H316313 (February 4, 2021); HQ H327590 (December 16, 2022). CBP further notes the legislative history of the 1978 statutory amendments to the OCSLA, which makes clear that objects “built overseas, and brought into OCS waters for placement” for development and production of resources are subject to customs duties. See H.R. Conf. Rep. 95-1474 (Aug. 10, 1978), 1978 U.S.C.C.A.N. 1674, 1679-1680. In the present matter, the subject merchandise was transported from Halifax, Nova Scotia, a foreign location, to a location on the OCS where scour protection had already been attached to the seabed. As a result of the placement of scour protection, this

Initially, we note that based upon the record provided, the subject Protest and Application for Further Review, was timely filed under the statutory and regulatory provisions for protests. See 19 U.S.C. § l514(a)(3); 19 CFR § 174.12(e). Additionally, further review of Protest 1401-21-106406 is properly accorded to the Protestant pursuant to 19 CFR §§ 174.24(c) and 174.25, as this protest involves matters previously ruled upon by the Commissioner of CBP or his designee or by the relevant courts, but facts are alleged or legal arguments presented which were not considered at the time of the original decision. In this regard, Protestant submits that CBP improperly determined the installation site to be a coastwise point.United States law generally applies to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline. 33 CFR § 2.22(a)(2). In addition, Section 4(a)(1) of the Outer Continental Shelf Lands Act of 1953 (“OCSLA”) (as amended), provides that the Constitution and laws and civil and political jurisdiction of the United States are extended to:the subsoil and seabed of the outer Continental Shelf;all artificial islands on the outer Continental Shelf;installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources, including non-mineral energy resources; orany such installation or other device (other than a ship or vessel) for the purpose of transporting or transmitting such resources.Protestant argues that there is “no need for entry and clearance” of the subject wind turbine generators because they were not installed at a coastwise point. Protestant further states that “CBP had no authority to require the entry of the goods included with Entry No. 101-6513644-1, and as such, no authority to liqui