Customs Issues Jones Act Fuel Blending Guidance

U.S. coastwise laws, commonly referred to as the “Jones Act,” restrict the transportation of merchandise between two U.S. points to qualified U.S.-flag vessels even if such cargo is transshipped in a foreign port. When, however, the merchandise is converted on foreign soil into a “new and different” product, then it can be transported to and from the United States in a foreign vessel. On March 6, 2014, Customs and Border Protection issued a ruling regarding whether gasoline components transported to the Bahamas from the United States could be blended there and be transported in a foreign vessel to and from the United States. CBP confirmed that blending can result in a “new and different” product so long as American Society for Testing Material (ASTM) grade changes, as it did with the gasoline blending components.