HQ 0086469 - MTBE - United States International Trade Commision Rulings

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HQ 086469

April 2,1990

CLA-2 CO:R:C:G 086469 JGH

CATEGORY: CLASSIFICATION

TARIFF NO.: 428.96

Area Director of Customs
New York Seaport
6 World Trade Center
New York, New York 10048

RE: MTBE

Dear Sir:

This decision is on the Application for Further Review of Protest 1001-9-002842, on the classification of methyl tertiary butyl ether under the Tariff Schedules of the United States (TSUS).

FACTS:

MTBE was entered in November 1988, under the provision for motor fuel blending stock in item 475.27,TSUS. Customs liquidated the entry under the provision for ethers of monohydric alcohols in item 428.96,TSUS. MTBE is used as an octane enhancer for gasoline.

ISSUE:

Whether MTBE is classifiable as an organic chemical in item 428.96,TSUS, or a petroleum product in item 475.27, TSUS.

LAW AND ANALYSIS:

The Omnnibus Trade & Compliance Act of 1988 added item 475.27, TSUS, to part 10 of Schedule 4, TSUS. Headnote 2(c), part 10, Schedule 4, TSUS, defined motor fuel blending stock as any product (except naphthas provided for in item 475.35) derived primarily from petroleum, shale oil or natural gas, whether or not containing additives, to be used for direct blending in the manufacture of motor fuel.

In behalf of the importer it is argued that MTBE is derived from petroleum, since it is made from isobutylene (which is derived from petroleum) and methanol (which can be derived from natural gas), and therefore classifiable in part 10, Schedule 4, TSUS.

In describing the extent of the coverage of the petroleum schedule in the TSUS, part 10, the Tariff Classification Study, C.I.E. 1/64, points out that part 10 covers crude petroleum, shale oil, and natural gas, and a number of products derived therefrom. Examples of the derived products are said to be crude petroleum, fuel oil, and distillates, such as kersosene, gasoline, naphtha, and benzene.

MTBE is not one of the above products. It is produced synthetically from isobutylene and methanol and is a distinct organic chemical compound. Rather than a petroleum product or a blendstock, it could be considered one of the additives which might be added to a blendstock. Since MTBE is not classifiable in part 10, Schedule 4, TSUS, whether or not item 475.27, TSUS, is an actual use provision is not in issue.

HOLDING:

MTBE is a discrete organic chemical compound classifiable in item 428.96, TSUS.

The protest is denied.

A copy of this decision should be furnished the protestant with the Form 19 Notice of Action.

Sincerely,

John Durant, Director

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