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HQ 966175

JANUARY 30, 2003

CLA-2 RR:CR:GC 966175 JAS


TARIFF NO.: 8905.20.00

Lisa A. Crosby, Esq.
Sidley Austin Brown & Wood LLP
1501 K Street, N.W.
Washington, D.C. 20005

RE: Topsides for Floating Drilling and Production Platform

Dear Ms. Crosby:

In a letter to the Director of Customs National Commodity Specialist Division, New York, dated December 13, 2002, on behalf of BP American Production Company (BP), you inquire as to the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of the topsides for a floating oil drilling and production platform. Your letter, with certain exhibits and other documentation, has been referred to this office for reply.


The “topsides,” as hereinafter described, will be fabricated in a foreign trade zone, withdrawn from the zone and towed by barge to an offshore installation site. There, it will be mated to a hull which is a floating substructure moored by cables to the seabed. The combined topsides, hull and concentric steel pipes and tubes called risers, used to transport the oil extracted from the well to the production platform, installed on-site, comprise a complete floating or submersible drilling or production platform.

You describe the topsides withdrawn from the zone as “complete.” It incorporates three individual decks: a cellar deck, drilling deck and production deck, all enclosed within a superstructure of fabricated structural steel scaffolding complete with walkways, stairs and protective handrails. It incorporates a drilling rig, two pedestal cranes, flare boom, helideck, pumps, three turbine generator sets, each rated to deliver approximately 19 MW to
supply power for all hull and topsides electrical loads, as well as living quarters, galley and sickbay for production personnel. You indicate the topsides has all the control units, software and mechanical functions required to extract oil from the seabed. For ease of transportation, the topsides will be withdrawn from the zone with the drilling rig and one of the two pedestal cranes fully complete but not yet attached.

The HTSUS provisions under consideration are as follows:

8905 [F]loating or submersible drilling or production platforms:

8905.20.00 Floating or submersible drilling or production platforms

8907 Other floating structures:

8907.90.00 Other


Whether the topsides, drilling rig and one pedestal crane withdrawn from a foreign trade zone for consumption has the essential character of a drilling or production platform of heading 8905, imported unassembled.


Under General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), goods are to be classified according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 2(a) states in part that articles imported incomplete or unfinished are to be classified as if complete or finished provided that, as imported, they have the essential character of the complete or finished article. Rule 2(a) also applies to articles considered as complete or finished under the Rule entered unassembled or disassembled.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. Though not dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS. Customs believes the ENs should always be consulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

You maintain that under GRI 2(a), HTSUS, the topsides is an incomplete or unfinished article, having the essential character of a drilling or production platform of heading 8905 because it has all the essential components for oil drilling and production. In contrast, the hull portion contains none of the equipment needed for oil extraction and production. You contend that the topsides are fully described by the ENs to heading 8905. You cite an administrative ruling in which a mated platform and hull were found to constitute a drilling or production platform classifiable in subheading 8905.20.00, HTSUS, while the hull, imported separately, was found to be classifiable in subheading 8907.90.00, HTSUS, as a floating structure. The topsides represents slightly over 50 percent of the total estimated cost a complete production platform with the hull and risers constituting the balance. Finally, in the alternative, you claim that like the hull in the referenced ruling, the topsides is classifiable in subheading 8907.90.00, HTSUS.

Initially, there is no issue of whether the topsides is a vessel of heading 8905, HTSUS. In HQ 224477, dated May 28, 1993, the ruling you cite, a deck, which includes all the working equipment necessary for the drilling and production of oil offshore, and a hull which enables the deck to float and is the means by which the platform is affixed to the seabed, was found to be classifiable in subheading 8905.20.00, HTSUS. As the topsides is an incomplete or unfinished article for tariff purposes, HQ 224477 does not govern its classification. Likewise, the topsides at issue is distinguishable from main and skirt pilings referred to as structural elements, in the nature of a superstructure for offshore oil and gas drilling platforms, with none of the drilling or production equipment being present, which were found in HQ 085145, dated September 15, 1989, to be classifiable in provisions of heading 7308, HTSUS, as structural units of iron or steel.

The ENs for heading 8905 include, as a subset of the term “[f]loating or submersible drilling or production platforms,” semi-submersible platforms in which the submerged part, the hull in this case, does not rest on the sea bed. When working, these platforms are kept in a fixed position by anchor lines. The ENs continue by stating such platforms are generally designed for the discovery of off-shore deposits of oil or natural gas. In addition to the equipment required for drilling or production, such as derricks, cranes, pumps, cementing units, silos, etc. these platforms have living quarters for the personnel.

The topsides at issue cannot float, but must be affixed atop the semi-submersible hull which is filled with ballast to provide stability for the platform, and moored to the sea bed by cables. The topsides, minus the hull and risers, is an incomplete or unfinished article for tariff purposes, which must be classified according to GRI 2(a). Essential character under Rule 2(a) is the essence of a thing. It is the distinctive quality or qualities that distinguish one thing from another, that identify a thing as what it is. The
factor which determines essential character will vary with the goods. Of particular significance, in cases like this, is the role of the topsides in relation to the use of the completed production platform. The topsides constitutes a platform, one designed for the discovery or exploitation of offshore oil deposits. It contains all of the equipment required for drilling and production, except for the risers, as well as living quarters for the personnel. In our opinion, the topsides possesses the aggregate of distinctive component parts that establish its identity as what it is, i.e., a submersible platform for drilling and producing oil off-shore.


Under the authority of GRI 2(a), HTSUS, the topsides is provided for in heading 8905. It is classifiable in subheading 8905.20.00, HTSUS.


Peter T. Lynch

(for) Myles B. Harmon, Director
Commercial Rulings Division

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