HQ W231489

May 19, 2008

OT:RR:CTF:ER LIQ-15 HQ W231489 ECD

Ms. Sharon M. Swiatek

Supervisory Import Specialist

U.S. Customs and Border Protection

726 Exchange Street, Room 400

Buffalo, New York 14210

RE: Application for Further Review of Protest No. 0901-06-100085: Entry
Requirements for Natural Gas Importations Made via Pipeline from Canada
Pursuant to the North American Free Trade Agreement; Undecided Post
Importation NAFTA Claim No. 0901-06-300312

The following is our decision regarding the Application for Further
Review ("AFR") of Protest No. 0901-06-100085 (the "Protest"), filed by
Constellation Energy Commodities Group Inc. ("Constellation Energy" or
"protestant"), which we received from your office on June 26, 2006. We
have completed our review of this Protest and are returning it to you
with the appropriate documents, which were forwarded for review. We are
also including directions for disposition of the Protest, as discussed
below.

**FACTS:**

On February 26, 2006, Constellation Energy filed this Protest concerning
the assessment of Merchandise Processing Fees ("MPFs") on natural gas
imports, which were made from Canada into the United States via the
Empire and Tennessee Gas pipelines through the Chippawa and Niagara
delivery points. Constellation Energy argued that U.S. Customs and
Border Protection ("CBP") should not assess MPF on its natural gas,
which it considers to be NAFTA-originating. In the alternative, assuming
there were no NAFTA preference or other exemption available for its
imports of natural gas, Constellation Energy argued that its MPF is
limited to the filing of the monthly entry itself, and should not be
calculated based on each release, because of the language of CBP
Regulations, the legislative history of the Customs user fee statute,
and the nature of natural gas. Finally, if an MPF must be assessed,
Constellation Energy argued that CBP improperly calculated the value of
its natural gas imports.

In identifying the entries covered by the Protest, Constellation Energy
stated parenthetically:

> (Exhibit A contains a listing of the entry numbers at issue in this
> protest, the monthly entry periods that they cover, their liquidation
> dates, and the amount of MPF assessed by Customs against each entry.
> The amount at issue in this protest, representing the amount of MPF
> billed to CCG by Customs, is \$xxxxxx)

(amount omitted). In a footnote next to the dollar amount, Constellation
Energy stated, "This figure does not include the amount of MPF assessed
against Entry Nos. 551-xxxxx186 and 551-xxxxx194, which are included in
this protest" (numbers omitted).

In its Protest, Constellation Energy provided lists of the following
imports at the Chippawa delivery point and the amount of MPF paid for
these entries:

+----------------+----------------+----------------+-----------------+
| Entry No.      | Import Date    | Aggregate      | Liquidation     |
|                |                | Entry Date     | Date            |
|                | (mo./yr.)      |                |                 |
|                |                | (mo./day/yr.)  | (mo./day/yr.)   |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx055   | 12/2004        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx063   | 1/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx071   | 2/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx089   | 4/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx097   | 5/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx105   | 6/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx113   | 7/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx121   | 8/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx915   | 9/2005         | 10/26/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx053   | 10/2005        | 11/28/2005     | 12/23/2005      |
+----------------+----------------+----------------+-----------------+

Constellation provided lists of the following imports at the Niagara
delivery point and the amount of MPF paid for these entries:

+----------------+----------------+----------------+-----------------+
| Entry No.      | Import Dates   | Aggregate      | Liquidation     |
|                |                | Entry Date     | Date            |
|                | (mo./yr.)      |                |                 |
|                |                | (mo./day/yr.)  | (mo./day/yr.)   |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx626   | 5/2003         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx634   | 6/2003         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx642   | 7/2003         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx659   | 8/2003         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx667   | 9/2003         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx675   | 10/2003        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx683   | 11/2003        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx691   | 12/2003        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx709   | 1/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx717   | 2/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx725   | 3/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx733   | 4/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx741   | 5/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx758   | 6/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx766   | 7/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx774   | 8/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx782   | 9/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx790   | 10/2004        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx808   | 11/2004        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx816   | 12/2004        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx824   | 1/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx832   | 2/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx840   | 3/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx857   | 4/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx865   | 5/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx873   | 6/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx881   | 7/2005         | 10/12/2005     | 12/16/2005      |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx899   | 8/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx956   | 9/2005         | 10/26/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx046   | 10/2005        | 11/28/2005     | 12/23/2005      |
+----------------+----------------+----------------+-----------------+

Separately, Constellation Energy provides, without any additional
information as to point of entry or MPF assessed, these four lines:

> December 2005 Monthly Entries, Filed 1/23/2006
>
> [Entry Nos.]{.underline} [Liquidation Date]{.underline}
>
> 551-xxxxx186 2/17/06
>
> 551-xxxxx194 2/17/06

On February 27, 2006, Constellation Energy also filed a post-importation
claim, pursuant to 19 U.S.C. § 1520(d), for a refund of MPFs paid on
natural gas it had imported ("Post-Importation Refund Claim"). Its
Post-Importation Refund Claim encompassed

> \[S\]everal monthly entries of natural gas made through the Port of
> Buffalo. (A list of the monthly entries included in this claim is
> attached as Exhibit A (highlighted entries.) These entries relate to
> importations made from February -- October 2005.)

Constellation Energy provided a list of highlighted importations made
from December 2004 through October 2005 at the Chippawa Pipeline, and
importations made from May 2003 through October 2005 at the Niagara
Pipeline; the list is identical to the detailed list in the Protest. In
the Post-Importation Refund Claim, Constellation Energy argued that CBP
should waive the requirement of a NAFTA Certificate of Origin, because
the natural gas could only have originated from a NAFTA country;
moreover, because the natural gas was allegedly NAFTA-originating, no
MPF should be assessed against its entries, and CBP should refund all
MPF Constellation Energy had paid.

According to Constellation Energy, there are three sectors in the
natural gas industry: the upstream sector, which covers the discovery
and initial stages of production of natural gas; the midstream sector,
which covers the processing of natural gas; and the downstream sector,
which covers the transportation and use of natural gas. Natural gas can
be distributed either via pipeline as a gas, or in tanks as liquefied
natural gas ("LNG"). Natural gas enters the pipeline either directly
from natural gas producers who have obtained the gas from wells, or is
injected into the pipeline by LNG regasification terminals; companies in
the midstream and upstream sector all inject gas into the pipeline.
There are no LNG marine terminals in Canada; however, there are several
proposed sites, and several existing sites in the United States.

The North American natural gas pipeline is not unidirectional; it is an
extensive network, extending from Mexico, through the United States, and
throughout Canada, and is referred to as a pipeline grid, through which
natural gas flows continuously, and includes the Niagara Falls and
Chippawa delivery points. According to the Energy Information
Administration, U.S. Department of Energy ("EIA"), natural gas flows in
both directions at the Niagara Falls delivery point, although it is
primarily an import delivery point; and, at the Chippawa delivery point,
natural gas flows into the United States. [See]{.underline} EIA Report,
"Locations of U. S. Natural Gas Import & Export Points, 2008," available
at
<http://www.eia.doe.gov/pub/oil_gas/natural_gas/analysis_publications/ngpipeline/impex_list.html>
(accessed May 8, 2008, printout in file).

Ownership of the natural gas at any given point in the pipeline is
determined by contractual rights, which may be traded in a secondary
market and imported into the United States. Pipeline operators monitor
the flow of gas, and maintain records as to what parties have
contractual rights over the natural gas flowing through the pipeline at
a given time. Importers receive a report indicating the quantity of
natural gas, which is based on the amount of natural gas it requested be
delivered based on its contractual rights. Constellation Energy provided
a copy of its September 2005 TransCanada pipeline account transactions
for several delivery points, including Chippawa and Niagara Falls.
Although the pipeline operator may not know from whom the importer
purchased the contractual right to the natural gas, the importer knows
from whom it purchased its right to the natural gas, as Constellation
Energy showed when it provided a list of its suppliers with its entry
documentation.

Although some importers may be from the upstream or midstream sectors,
or importers that purchase natural gas directly from the natural gas
producers, all of which could obtain NAFTA Certificates of Origin,
Constellation Energy purchases natural gas contractual rights that are
traded on the secondary market, and claims that because the contractual
rights are traded through many different parties, NAFTA Certificates of
Origin do not travel with the natural gas rights purchased in a
secondary market. Constellation Energy provided an example of how
natural gas is priced in the secondary market, when it provided a copy
of the "Platts Gas Daily", dated February 23, 2006, which provides
natural gas prices for various hubs.

Contrary to Constellation Energy's assertion that no CBP inspectors or
personnel monitor the flow of natural gas, CBP Regulations expressly
provide that each port must establish "controls and checks on the
unlading and measurement of petroleum and petroleum products imported in
bulk by vessel, truck, railroad car, pipeline, or other carrier."
[See]{.underline} 19 C.F.R. § 151.42(a)(1). Approved installations are
subject to CBP verification, and CBP officers may perform or witness
measurement of the natural gas, pursuant to section 151.42(b) of CBP
Regulations. [See]{.underline} 19 C.F.R. § 151.42(b).

Constellation Energy argues that natural gas should be treated as if it
were electricity, because natural gas is intangible and is transported
via pipeline. Constellation Energy cites a memorandum dated February 3,
1989, explaining that pursuant to the (then new) HTSUS Additional U.S.
Note 5(B) in Chapter 27, electrical energy is not subject to entry
requirements and is exempted from MPF assessment.

Natural gas imports that meet certain criteria may file consolidated
monthly entries, pursuant to 19 C.F.R § 24.23(d). The program for the
aggregation of monthly processing fees began on July 1, 1970, when CBP
implemented a policy program for the monthly consolidated entry of
nondutiable merchandise, expanding a pilot program from the ports of
Buffalo and Detroit to the entire country to "determine its
applicability to other types of ports and modes of transportations."
Customs Bureau Circular ENT-1-AC, July 1, 1970, available at
<http://www.cbp.gov/xp/cgov/trade/trade_programs/cargo_summary/pipeline_entry/>
. When Congress amended the Customs user fee statute in 1990, it
specifically carved an exception for aggregate merchandise processing
fees. Section 111(f) of Pub. L. 101-382, as amended by Pub. L. 101-508,
title X, Sec. 10001(c), Nov. 5, 1990, 104 Stat. 1388-386, provided that:

> \(1\) Notwithstanding any provision of section 13031 of the
> Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.
> 58c), in the case of entries of merchandise made under the temporary
> monthly entry programs established by the Commissioner of Customs
> before July 1,1989, for the purpose of testing entry processing
> improvements, the fee charged under section 13031(a)(9) of the
> Consolidated Omnibus Budget Reconciliation Act of 1985 for each day's
> importations at each port by the same importer from the same exporter
> shall be the lesser of\--
>
> \(A\) \$400, or
>
> \(B\) the amount determined by applying the ad valorem rate currently
> in effect under such section 13031(a)(9) to the total value of each
> day\'s importations at each port by the same importer from the same
> exporter.
>
> \(2\) The fees described in paragraph (1) that are payable under the
> program described in paragraph (1) shall be paid with each monthly
> consumption entry. Interest shall accrue on the fees paid monthly in
> accordance with section 6621 of the Internal Revenue Code of 1986 \[26
> U.S.C. § 6621\].

On December 22, 1992, the Assistant Commissioner, Office of Inspection
and Control at legacy Customs, issued a memorandum, "Requirements for
Pipeline Operators." According to the memorandum, entry must be made for
every importation made via pipeline, and pipeline operators were
required to keep and maintain records of importations to be made
available to Customs. [Id.]{.underline}, available at
<http://www.cbp.gov/xp/cgov/trade/trade_programs/cargo_summary/pipeline_entry/>
. To reiterate the correct procedures for monthly consolidated entries,
CBP issued a memorandum on April 10, 2006, "Monthly Entry for Pipeline,"
which explained

> The collection of MPF for monthly consolidated pipeline entries is
> governed by 19 CFR 24.23(d), which allows for the aggregation of the
> ad valorem fee for each day's importations at an individual port by
> the same importer and exporter. This regulation provides that the ad
> valorem rate shall be the lesser of \$400.00 for each day's
> importations, or by applying the ad valorem rate of 0.21 percent, as
> listed in 19 CFR 24.23(b)(1)(i)(A), to the total value of such daily
> importations. In accordance with 19 CFR 24.23(d)(2), the MPF is to be
> paid with interest at the time of presentation of the monthly entry
> summary.

"Monthly Entry for Pipeline," (April 10, 2006), available at
<http://www.cbp.gov/xp/cgov/trade/trade_programs/cargo_summary/pipeline_entry/>
. Thus, for some highly valued importations, CBP could assess up to
\$400 per day, plus interest, which, aggregated into a consolidated
monthly entry, could amount to several thousand dollars.

According to a search in CBP's Automated Commercial System ("ACS"), for
the monthly aggregate entries Constellation Energy filed that covered
natural gas releases from May 2003 through October 2005, Constellation
Energy originally paid \$485 total for each monthly entry, which
included multiple daily releases. According to ACS, the Port has made no
decision with respect to the Post-Importation Refund Claim.

According to the entry documentation filed with Entry Nos. 551-xxxxx055,
551-xxxxx816, and 551-xxxxx808, Constellation Energy provided daily
volumes for each entry, based on pipeline transportation reports, and
multiplied that quantity by daily prices, "as posted by The McGraw-Hill
Companies' Platts Gas Daily Mid-Point Price for the Niagara delivery
point." The Port did not dispute the valuation methodology Constellation
Energy used. Because Constellation Energy had originally paid only \$485
for each entry, CBP liquidated or reliquidated the entries, pursuant to
19 C.F.R. § 24.23(d), assessing a MPF of the lesser of either \$400 or
an amount determined by applying 0.21 percent to the total value, as
Constellation Energy had calculated it, of each daily importation.

Constellation Energy argued that it "currently employs" a methodology
had been established to value entries that was based on a formula it had
negotiated with the Port of Champlain: first, the aggregate amount that
Constellation Energy paid for all shipments to it from Canada for a
given month by adding the amounts given in all invoices received from
Constellation Energy's counterparties or suppliers. Using the aggregate
volume shown on the same invoices, the percentage of total volume
imported from each supplier was calculated. Multiplying the volume
percentage of the monthly aggregate for each supplier by the aggregate
sales price resulted in a weighted price for each supplier. Finally,
according to Constellation Energy, the weighted price for each supplier
was multiplied by the actual volume reported by each supplier. The total
value for all suppliers per month was used as the entered value for each
reporting month. The record of this protest does not indicate the
statutory basis of appraisement. Furthermore, Constellation Energy fails
to provide an explanation of how this methodology was used for the
entries at issue in the Protest, and this formula is not reflected in
the entry documents filed with the Port of Buffalo.

Constellation Energy also stated that it reports its imports and exports
to the Department of Energy on a monthly basis, it receives accounts
from the pipeline operators on a monthly basis, and its supplier
invoices "typically are submitted on a monthly basis." Constellation
Energy, however, fails to provide samples of these invoices, nor does it
explain why there would be daily prices if all transactions occur on a
monthly basis, and why it would state in its entry documentation that it
received daily reports from the pipeline. As for reports to the
Department of Energy, in a recent Notice of Procedural Order Amending
Natural Gas Import and Export Orders, the Department of Energy, Office
of Fossil Energy noted that its authority to regulate the natural gas
industry was pursuant to the Natural Gas Act, 15 U.S.C. § 717b, a
provision completely different from Customs law. [Notice of Procedural
Order Eliminating Quarterly Reporting Requirement and Amending Monthly
Reporting Requirement for Natural Gas and Liquefied Natural Gas
Import/Export Authorization Holders]{.underline}, 73 Fed. Reg. 6943,
6944 (February 6, 2008). The facts do not demonstrate that natural gas
industry operates entirely on a monthly basis.

On September 14, 2007, pursuant to our request, Constellation Energy
provided an explanation why deductive value was not an appropriate
method to value natural gas for purposes of assessing MPF.

**ISSUES**:

Whether the protestant may protest the assessment of MPF on entries that
are also covered in a post-importation NAFTA refund claim, made pursuant
to 19 U.S.C. § 1520(d), before the latter refund claim is denied.

Whether the protestant may protest an undecided request to waive the
requirement for a NAFTA Certificate of Origin for imports of natural
gas.

Whether the protestant may protest an undecided request to waive entry
requirements, pursuant to 9801.00.10 of the Harmonized Tariff Schedule
of the United States ("HTSUS"), of reimported natural gas.

Whether the requirement for a NAFTA Certificate of Origin may be waived
for entries not covered by the February 27, 2006, Post-Importation
Claim.

Whether natural gas is exempt from entry requirements, on the ground
that it is neither solid nor liquid, and it is delivered via pipeline.

Whether MPF should be assessed on a monthly, rather than a daily, basis
for imports of natural gas via pipeline.

Whether natural gas should be valued using a monthly price average,
derived from Canadian natural gas trade publications' price indices for
natural gas delivered at different Canadian trading hubs and export
points, rather than using a formula based on the weighted price for each
supplier, multiplied by the volume reported by each supplier; even
though the Port had accepted a valuation based on daily releases at the
pipeline multiplied by that day's value, as published in a Canadian
natural gas publication.

**LAW AND ANALYSIS**:

As an initial matter, with respect to the MPF calculation issues, part
of Constellation Energy's Protest is timely, pursuant to 19 U.S.C. §
1514(c)(3)(B), because it was filed on February 26, 2006, which is
within 180 days after the date CBP liquidated the following entries:

+----------------+----------------+----------------+-----------------+
| Entry No.      | Import Date    | Aggregate      | Liquidation     |
|                |                | Entry Date     | Date            |
|                | (mo./yr.)      |                |                 |
|                |                | (mo./day/yr.)  | (mo./day/yr.)   |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx626   | 5/2003         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx634   | 6/2003         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx642   | 7/2003         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx659   | 8/2003         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx667   | 9/2003         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx675   | 10/2003        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx683   | 11/2003        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx691   | 12/2003        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx709   | 1/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx717   | 2/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx725   | 3/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx733   | 4/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx741   | 5/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx758   | 6/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx766   | 7/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx774   | 8/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx782   | 9/2004         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx790   | 10/2004        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx808   | 11/2004        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx816   | 12/2004        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx824   | 1/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx832   | 2/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx840   | 3/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx857   | 4/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx865   | 5/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx873   | 6/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx881   | 7/2005         | 10/12/2005     | 12/16/2005      |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx899   | 8/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx956   | 9/2005         | 10/26/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx046   | 10/2005        | 11/28/2005     | 12/23/2005      |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx055   | 12/2004        | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx063   | 1/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx071   | 2/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx089   | 4/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx097   | 5/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx105   | 6/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx113   | 7/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx121   | 8/2005         | 10/12/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx915   | 9/2005         | 10/26/2005     | 12/2/2005       |
+----------------+----------------+----------------+-----------------+
| 551-xxxxx053   | 10/2005        | 11/28/2005     | 12/23/2005      |
+----------------+----------------+----------------+-----------------+

As is explained, below, because these entries are clearly identified as
part of the Protest, only they are included in the Protest.

The Port properly granted the application for further review. Further
review is appropriate when the Port considers a protest should be
denied, but the protest involves issues that have not been the subject
of a CBP Headquarters ruling or a court decision. [See]{.underline} 19
C.F.R. § 174.26(b)(1)(iv). In this Protest, the issues of whether MPF
may be assessed on a daily basis for imports of natural gas, and whether
the properties of and delivery mechanism for natural gas render it
exempt from entry requirements, as enumerated above, have not been
addressed in any prior rulings or court decisions. Therefore, pursuant
to 19 C.F.R § 174.26(b)(1)(iv), we are addressing those issues.

As for issues that were also raised in the Post-Importation Refund
Claim, we may not address them, as explained below, because the Port has
not made a decision. As for other any other entries, we do not address
them, because they are not clearly included in this Protest.

**Part of the Protest Must Be Denied as Premature**

Constellation Energy may file a protest regarding payment of the MPF for
entries claimed in its Post-Importation Refund Claim only after a
decision denying that claim is made. The statute allows for
post-importation requests for refunds of duties and MPF, if the importer
demonstrates that its imported merchandise qualifies according to the
rules of origin delineated by a free trade agreement and the importer
files its request within one year after the date of importation.
[See]{.underline} 19 U.S.C. § 1520(d). The U.S. Court of International
Trade has interpreted the protest provision, 19 U.S.C. § 1514, to mean
that a protest may be filed only after CBP renders a final decision, and
that final decision must be a denial of the Post-Importation Refund
Claim: "Prior to denial of a § 1520(d) claim, Customs has made no
decision which can be protested." [Power-One Inc. v. United
States]{.underline}, 83 F. Supp. 2d 1300, 1306 (Ct. Int'l Trade 1999).
Until the Port makes a decision with respect to the February 27, 2006,
Post-Importation Refund Claim, Constellation Energy has received no
decision that it may protest.

In the Post-Importation Refund Claim, the Protestant also requested a
waiver of NAFTA Certificate of Origin for future imports of natural gas,
and a waiver of entry requirements pursuant to 9801.00.10 of the
Harmonized Tariff Schedule of the United States ("HTSUS") for any United
States-origin natural gas, and the Port has not made any decision with
respect to either waiver request. With no denial of either waiver
request, CBP has made no decision that can be protested.

**If a Protestant Has Not Accurately Stated Its Objection With Respect
to Other Entries, Then the Protest Does Not Include Those Other
Entries**

Any additional entries, which are not clearly identified in this
Protest, are not included. In filing a protest, the claimant must convey
"'enough information to apprise knowledgeable officials of the
importer's intent and the relief sought.'" [Lykes Pasco, Inc. v. United
States]{.underline}, 14 F. Supp. 2d 748, 749 (Ct. Int'l Trade
1998)([quoting]{.underline} [Mattel, Inc. v. United States]{.underline},
377 F. Supp. 955 (Cust. Ct. 1974)). As explained by the U.S. Court of
International Trade, a protest may not place an unreasonable burden on
CBP, requiring CBP officials "to go beyond the most exactly defined
details of the protest, to realize that an inadvertence or omission has
occurred, to incorporate its historical knowledge of the entire series
of transactions that may have been involved, and to make corrections."
[Lykes Pasco, Inc.,]{.underline} 14 F. Supp. 2d at 750. In this Protest,
Constellation Energy included highly detailed lists of entries, which
included the amount of MPF assessed on those entries, which covered
entries made on October 12 and 26, 2005, and November 28, 2005. The
assessment of MPF is central to Constellation Energy's entire claim. In
asserting what entries are covered by this protest, and how much MPF it
had paid, Constellation Energy stated, "The amount at issue in this
protest, representing the amount of MPF billed to CCG by Customs, is
\$354,179.72;" however, it noted that "This figure does not include the
amount of MPF assessed against Entry Nos. 551-xxxxx186 and 551-xxxxx194,
which are included in this protest." Those two entries are not included
in the detailed lists of entries provided in Protest Exhibit A. It is
unclear whether these entries are included in the entire protest, or are
part of the waiver request only. It is also unclear whether another
entry, 551-xxxxx111 is included in the Protest, because Constellation
Energy included documents for Entry No. 551-xxxxx111; however, this
entry is never discussed in the claim itself. To determine whether these
three entries are covered by the Protest, CBP officials would be forced
to make a judgment as to whether Constellation Energy intended those
three entries be included in the entire claim, or included in only the
claims not related to the amount of MPF assessed. To do so would place
an unreasonable burden on CBP officials to edit a Protest.

Even if it could be argued that these entries could be considered for
the waiver issues and the issues related to MPF assessment, and that
these three entries are not discussed in the Post-Importation Refund
Claim, the claim would fail, as is discussed in depth in Ruling HQ
231595. A certificate of origin is required unless the certificate was
waived by the Port Director, which is not the case here. We note that,
because the waiver is discretionary, Constellation Energy is not
foreclosed from requesting a waiver in the future from the Port of
Buffalo or any other port, and nothing in this decision may be construed
as an ultimate denial of any waiver request it could make for future
entries. The claim would fail with respect to the other issues, for the
reasons discussed below.

**Natural Gas Is Not Electricity, and Is Not Exempt from Entry
Requirements**

There is no legal basis for exempting natural gas from the entry
requirements of 19 U.S.C. § 1484. An importer of record is required to
"make entry" by filing "such information as is necessary to enable the
Bureau of Customs and Border Protection to determine whether the
merchandise may be released from custody of the Bureau of Customs and
Border Protection." [See]{.underline} 19 U.S.C. § 1484(a)(1)(A). CBP
Regulations provide that all merchandise imported into the United States
is required to be entered, pursuant to 19 U.S.C. § 1484, "unless
specifically excepted." [See]{.underline} 19 CFR § 141.4(a). Natural gas
is considered merchandise, pursuant to 19 U.S.C. § 1401(c), which
states, "The word 'merchandise' means goods, wares, and chattels of
every description." The definition is intentionally broad, and includes
the three generally recognized states of matter, which are liquid, gas,
and solid. Natural gas has its own tariff classification in the HTSUS,
2711.21.00, which is described as "In gaseous state, Natural gas." This
provision must apply to natural gas because, according to the General
Note 1, "All goods provided for in this schedule and imported into the
customs territory of the United States from outside thereof . . . . are
subject to duty or exempt therefrom as prescribed in general notes 3
through 29 inclusive." There is no provision excluding natural gas from
entry requirements. Therefore, because natural gas is merchandise, and
is specifically provided for in a tariff subheading in the HTSUS, it is
treated as an imported good, and it must be entered.

Similarity to merchandise that is excepted from entry requirements does
not automatically exempt other merchandise from entry requirements.
Constellation Energy argues that natural gas should be treated as if it
were electricity, which is specifically exempted from entry
requirements. HTSUS Chapter 27 Additional U.S. Note 6(b) states

> Electrical energy shall not be subject to the entry requirements for
> imported merchandise set forth in section 484 of the Tariff Act of
> 1930, as amended, (19 U.S.C. 1484), but shall be entered on a periodic
> basis in accordance with regulations to be prescribed by the Secretary
> of the Treasury.

Constellation Energy posits that natural gas has characteristics that
are similar to electricity, [i.e.]{.underline} natural gas is intangible
and is transported via pipeline, and thus natural gas should be exempt
from the entry requirements of 19 U.S.C. § 1484. HTSUS Chapter 27
Additional U.S. Note 6(b) covers only electricity, and not any gas or
petroleum product. Following the maxim of statutory and regulatory
construction, [expressio unius est exclusio alterius]{.underline},
because HTSUS Chapter 27 Additional U.S. Note 6 (b) expressly provides
for the exclusion of only electricity it cannot be read to include other
matter in a gaseous state or merchandise transported via a pipeline.
[See]{.underline} [Cook v. Principi]{.underline}, 318 F.3d 1334, 1339
n.6 (Fed. Cir. 2002)("[Expressio unius est exclusio
alterius]{.underline} means that 'the expression of one thing is the
exclusion of another.'"(citations omitted)). According to the General
Rules of Interpretation, Rule 6, of the HTSUS, "For legal purposes, the
classification of goods in the subheadings of a heading shall be
determined according to the terms of those subheadings and any related
subheading notes. . . ." The terms of HTSUS 2711.21.00 specifically
provide for natural gas. The terms of HTSUS Chapter 27 Additional U.S.
Note 6(b) specifically exempt only electrical energy from entry
requirements. There is no legal basis for applying the electrical energy
entry exemption to natural gas importations.

**MPF Is Properly Assessed on a Daily Basis for Each Importation**

The legislative history of the Customs user fee statute indicates that
Congress intended the MPF, pursuant to the pre-1989 monthly entry
program at issue, to be calculated on the basis of each release, not on
each consolidated monthly entry. Unless their goods are exempt from
entry, all importers are required to enter their goods, and when they
file an entry, they are required to pay a merchandise processing fee
("MPF"). MPF is determined on each release or entry or, if applicable,
by the statutory aggregate provision. According to the Customs user fee
statute, CBP "shall charge and collect" fees for the processing of
merchandise that "is formally entered or released." 19 U.S.C. §
58c(a)(9)(A). Merchandise is entered or released, if the merchandise is
"entered or released from customs custody" pursuant to 19 U.S.C. §
1484(a)(1)(A). See 19 U.S.C. § 58c(b)(8)(E)(ii). The only statutory
provision specifically allowing aggregate entries or releases to be
treated as a single entry for purposes of assessing MPF is a provision
covering merchandise withdrawn from a foreign trade zone.
[See]{.underline} 19 U.S.C. § 1484(i)(1). Natural gas importers, such as
Constellation Energy, are allowed to make consolidated entries on a
monthly basis, pursuant to a pre-1989 monthly entry program, and the MPF
is assessed on a per-release, [i.e.]{.underline} daily, basis.
Constellation Energy posits that its MPF, if it applies at all, is
limited to the filing of the monthly entry itself, because of the
language of 19 C.F.R. § 24.23(d), and the nature of natural gas. As
discussed below, Constellation Energy's claim fails, because the
legislative history of the Customs user fee statute indicates that
Congress intended the MPF, pursuant to the pre-1989 monthly entry
program at issue, to be calculated on the basis of each release;
moreover, the facts do not support Constellation Energy's arguments.

Natural gas importers, like Constellation Energy, are allowed to make
aggregate entries on a monthly basis, pursuant to a pre-1989 monthly
entry program, and the MPF is assessed on a per-release,
[i.e.]{.underline} daily, basis. As already discussed, the program for
the aggregation of monthly processing fees began on July 1, 1970, when
CBP implemented a policy program for the monthly consolidated entry of
nondutiable merchandise, expanding a pilot program from the ports of
Buffalo and Detroit to the entire country to "determine its
applicability to other types of ports and modes of transportations."
Customs Bureau Circular ENT-1-AC, July 1, 1970, available at
<http://www.cbp.gov/xp/cgov/trade/trade_programs/cargo_summary/pipeline_entry/>
(last visited May 9, 2008, in file). The monthly consolidated entry
program was never specifically incorporated into CBP Regulations.

When Congress amended the Customs user fee statute in 1990, it
specifically carved out an exception for aggregate merchandise
processing fees. Section 111(f) of Pub. L. 101-382, as amended by Pub.
L. 101-508, title X, Sec. 10001(c), Nov. 5, 1990, 104 Stat. 1388-386,
provided that:

> \(1\) Notwithstanding any provision of section 13031 of the
> Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.
> 58c), in the case of entries of merchandise made under the temporary
> monthly entry programs established by the Commissioner of Customs
> before July 1,1989, for the purpose of testing entry processing
> improvements, the fee charged under section 13031(a)(9) of the
> Consolidated Omnibus Budget Reconciliation Act of 1985 for each day\'s
> importations at each port by the same importer from the same exporter
> shall be the lesser of\--
>
> \(A\) \$400, or
>
> \(B\) the amount determined by applying the ad valorem rate currently
> in effect under such section 13031(a)(9) to the total value of each
> day\'s importations at each port by the same importer from the same
> exporter.
>
> \(2\) The fees described in paragraph (1) that are payable under the
> program described in paragraph (1) shall be paid with each monthly
> consumption entry. Interest shall accrue on the fees paid monthly in
> accordance with section 6621 of the Internal Revenue Code of 1986 \[26
> U.S.C. § 6621\].

There is no indication from the legislative history that Congress
intended "temporary monthly entry programs established by the
Commissioner of Customs before July 1, 1989" to mean a program that had
a specified end date. [See]{.underline} H. R. Conf. Rep. No. 101-650
(1990).

When legacy Customs drafted regulations implementing the Congressional
directive, it stated that the new provision would "set forth the
provision in the Act regarding the daily aggregation of the ad valorem
fee for entries under existing temporary monthly entry programs."
[Customs Regulations Amendments Relating to User Fees]{.underline}, 56
Fed. Reg. 15036 (April 15, 1991). Thus legacy Customs, by paraphrasing
"temporary monthly entry programs established by the Commissioner of
Customs before July 1, 1989" as "existing temporary monthly entry
programs," legacy Customs interpreted "temporary" to be a descriptive,
not a controlling, term. Because Customs in implementing the program
specifically stated that it was expanding a pilot program from two ports
to the entire country to determine its applicability, and because it was
never formally implemented in CBP Regulations, it was a temporary
program established before July 1, 1989.

The Regulatory provision matches the Congressional directive word for
word:

> \(d\) *Aggregation of ad valorem fee*. (1) Notwithstanding any other
> provision of this section, in the case of entries of merchandise made
> under any temporary monthly entry program established by Customs
> before July 1, 1989, for the purpose of testing entry processing
> improvements, the ad valorem fee charged under paragraph (b)(1)(i) of
> this section for each day\'s importations at an individual port shall
> be the lesser of the following, provided that those importations
> involve the same importer and exporter:
>
> \(i\) \$400; or
>
> \(ii\) The amount determined by applying the ad valorem rate under
> paragraph (b)(1)(i)(A) of this section to the total value of such
> daily importations.
>
> \(2\) The fees as determined under paragraph (d)(1) of this section
> shall be paid to Customs at the time of presentation of the monthly
> entry summary. Interest shall accrue on the fees paid monthly in
> accordance with section 6621 of the Internal Revenue Code of 1986.

19 C.F.R. § 24.23(d).

Legislative history demonstrates that Congress intended the term
"temporary," in the phrase "temporary monthly entry program," to be a
descriptive, not a controlling, term. Constellation Energy argues that
the consolidated monthly entry program has existed for so long that it
could not be a temporary program, and 19 C.F.R § 24.23(d) does not
apply. Such an interpretation is contrary to Congressional intent.

Congress has never limited the amount of time in which legacy Customs or
CBP could develop procedures for collecting duties on imports. Congress
has explicitly granted CBP the ability to set up procedures for testing
the collection of duties on imports. See 19 U.S.C. § 3 ("The Secretary
of the Treasury shall direct the superintencence of the collection of
the duties on imports as he shall judge best."). Even in the North
American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107
Stat. 2057 (December 8, 1993)("NAFTA Implementation Act"), did Congress
decline to set specific time limits for testing procedures. The NAFTA
Implementation Act contained provisions pertaining to Customs
Modernization, including provisions for the National Customs Automation
Program (NCAP), an electronic system for the processing of commercial
importations. Specifically, the NAFTA Implementation Act added 19 U.S.C.
§§ 1411-1414, covering the NCAP, and the new provisions set forth
implementation and evaluation requirements for the NCAP. However, the
statute did not implement a requirement that testing be performed within
a specific period of time.

It was not until 1995 that time limits on testing were considered: in
implementing 19 U.S.C. §§ 1411-1414, legacy Customs added a new
regulation setting parameters covering tests of the NCAP, and expanded
the new regulation to include procedures for future test programs in
general. [See]{.underline} [Test Programs]{.underline}, 60 Fed. Reg.
14211, 14213 (March 16, 1995). The Regulation does not include any
specific time limitation for conducting a new procedure or test program.
[See]{.underline} 19 C.F.R. § 101.9. Therefore, to read "temporary" to
mean that 19 C.F.R. § 24.23(d) does not apply to consolidated monthly
entries of natural gas, because the program has lasted for too long,
would conflict with Congress's intent to preserve the programs in
existence in 1989.

As discussed above, unless their goods are exempt from entry, all
importers are required to enter their goods, and when they file an
entry, they are required to pay MPF. Only if certain merchandise is
withdrawn from foreign trade zones, may the aggregate (weekly) entry or
release be treated as a single entry for MPF assessment purposes.
[See]{.underline} 19 U.S.C. § 1484(i). Because the treatment of a weekly
entry as a single entry only appears with respect to foreign trade
zones, again following the maxim of statutory and regulatory
construction, [expressio unius est exclusio alterius]{.underline},
Congress did not intend for the MPF assessment of certain foreign trade
zone weekly entries to be extended to consolidated monthly natural gas
pipeline entries. Therefore, CBP cannot treat consolidated monthly
entries as a single entry for purposes of assessing MPF.

By arguing that the monthly aggregate MPF program does not apply,
Constellation Energy appears to be arguing that it should be filing
entries for each release it makes, [i.e.]{.underline}, on a daily basis.
Constellation Energy argues that the only basis for MPF assessment is in
19 C.F.R. § 24.23(b)(1)(i), which requires assessment against the entry
summary filed with the monthly entries. According to Constellation
Energy's reasoning, instead of being liable for up to the maximum per
daily release, which could be \$400 times thirty-one days or \$12,400,
it should be liable for only the maximum or minimum for the entry
itself, [i.e.]{.underline} a maximum of \$485, pursuant to 19 U.S.C. §
58c(a)(9)(B)(i). However, for 24.23(b)(1)(i) of CBP Regulations to
apply, the temporary monthly entry program established before July 1,
1989, which is the monthly entry program, would have to be inapplicable
to Constellation Energy's natural gas importations. According to the
entry documents Constellation Energy provided the Port of Buffalo, its
natural gas is imported on a daily basis, and it is able to report daily
volumes, based on pipeline transportation reports. As is discussed,
above, an entry is required for each importation, and it is only
pursuant to the monthly consolidated entry program that natural gas
importers are not required to make entries on a daily basis. Section
24.23(d) cannot logically be read to allow for aggregated monthly
entries, but not require the daily aggregate MPF that is specified
within that same provision.

The MPF is structured to approximate the cost of CBP services rendered.
The purpose of the fees in section 58c is to reflect the cost of
commercial services CBP provides when processing merchandise, as
described in 19 U.S.C. § 58c(e),(f)(4). The intent of the amendment to
the Customs user fee statute was to ensure that fee revenues approximate
the cost of Customs services rendered: Congress described the fee
revenues as being limited to the cost of "Customs operations related to
merchandise processing and to the processing of imports covered by the
fee." [See]{.underline} H. R. Conf. Rep. No. 101-650 at 105 (1990).
Processing merchandise and imports entails more than Constellation
Energy recognized in its argument. Ignoring CBP Regulations,
Constellation Energy argues that the services CBP provides were limited
to filing the filed entries, and its assumed that CBP does not inspect,
monitor, or provide Customs services at the pipeline. Constellation
Energy's assumption that CBP officials only process documentation with
respect to pipeline entries is erroneous, as noted in the "Facts"
section, above, particularly when the ports monitor natural gas imported
by pipeline, pursuant to 19 C.F.R. § 151.42(a)(1), (b). Because Customs
services rendered amount to more than simply filing entry documents or
electronic entries, it is without merit for Constellation Energy to
assume that the MPF is unrelated to services CBP provides.

Constellation Energy argues that all of its natural gas transaction
documentation is generated on a monthly basis; therefore, even if its
importations or releases occur daily, or even several times a day, its
releases should be treated as a monthly entry for purposes of assessing
the MPF. It reports its imports and exports to the Department of Energy
on a monthly basis, it receives accounts from the pipeline operators on
a monthly basis, and its supplier invoices "typically are submitted on a
monthly basis." Constellation Energy, however, fails to provide samples
of these invoices, and fails to explain why there would be daily prices
if all transactions occur on a monthly basis. Moreover, in its recent
Notice of Procedural Order Amending Natural Gas Import and Export
Orders, the Department of Energy, Office of Fossil Energy noted that its
authority to regulate the natural gas industry was pursuant to the
Natural Gas Act, 15 U.S.C. § 717b, a provision completely different from
Customs law. [Notice of Procedural Order Eliminating Quarterly Reporting
Requirement and Amending Monthly Reporting Requirement for Natural Gas
and Liquefied Natural Gas Import/Export Authorization
Holders]{.underline}, 73 Fed. Reg. 6943, 6944 (February 6, 2008).
Constellation Energy's arguments do not persuade us that importations
are on a monthly basis.

Finally, Constellation Energy states that all the other ports in which
it imports natural gas charge only \$485 total, not per importation,
against the entry summary with each monthly entry. Constellation Energy
lists Champlain, New York: Pembina, North Dakota; St. Albans, Vermont;
and Great Falls, Montana; however, it provides no evidence to support
its assertion. In fact, according to Ruling HQ 231595, Constellation
Energy failed to file entry summaries from April 2005 through August
2005, and only did so for each monthly entry summary on October 3, 2005;
therefore, Constellation Energy cannot argue that it was aware of a
practice at the Port of Champlain when it was failing to file entries.
Thus, Constellation Energy's failure to properly file its entries does
not mean that other ports have a practice that differs from this Port.

**Valuation of Natural Gas for MPF Assessment**

Given that CBP has no authority to assess MPF on a monthly basis, rather
than per entry or release, for consolidated monthly entries,
Constellation Energy has not stated a claim as to how its natural gas
was improperly valued. The protestant argues that natural gas should be
valued using a monthly price average, derived from Canadian natural gas
trade publications' price indices for natural gas delivered at different
Canadian trading hubs and export points. It argues that the current
valuation process at the Port of Champlain is to use invoice prices
multiplied by percentage of the total volume imported from each
supplier, a process the protestant and port officials created. However,
according to three sampled entries, discussed in the "Facts" section,
above, Constellation Energy provided daily volumes for each entry, based
on pipeline transportation reports, and multiplied that quantity by
daily prices, "as posted by The McGraw-Hill Companies' Platts Gas Daily
Mid-Point Price for the Niagara delivery point." In assessing MPF, the
Port of Buffalo accepted the valuation methodology Constellation Energy
used: it applied the lesser of either \$400 or an amount determined by
applying 0.21 percent to the total value, as Constellation Energy had
calculated it, of each daily importation. If there is no basis for an
underlying objection, a protest will not be granted. [See]{.underline}
[3V, Inc. v. United States]{.underline}, 83 F. Supp. 2d 1351, 1353 (Ct.
Int'l Trade 1999)(granting defendant's motion to dismiss for failure to
state a claim upon which relief may be granted). Therefore,
Constellation Energy has no basis to protest the valuation of its
entries for MPF assessment, and its claim must be denied.

**HOLDING:**

You are instructed to DENY the protest in full. The claim in the
Protest, which objects to any assessment of MPF on certain entries, is
also covered in an undecided post-importation NAFTA refund claim.
Because the claim in the Protest was made before the post-importation
NAFTA refund claim had been denied, that claim must be denied as
premature. For the same reason, the claims in the Protest concerning an
undecided request to waive the requirement for a NAFTA Certificate of
Origin for imports of natural gas, and an undecided request to waive
entry requirements of reimported natural gas, must be denied as
premature. As for any other entries that are not included in the
post-importation NAFTA refund claim, and that are not clearly and
accurately described in the Protest, we do not include them in the
Protest. The claim that natural gas is exempt from entry requirements,
because it has characteristics similar to electricity, is denied as
without legal basis. The claim that MPF should be assessed on a monthly,
rather than a daily, basis for imports of natural gas made via pipeline,
is denied as without legal basis. The claim concerning the valuation
methodology used for calculating MPF is denied for failing to state a
claim upon which relief may be granted, because the Port of Buffalo
accepted the valuation methodology Constellation Energy provided.

This decision will result in the assessment of MPF, and any
reliquidation of the entries in accordance with the decision must be
accomplished prior to mailing of the decision, in accordance with
Section IV of the Customs Protest/ Petition Processing Handbook (CIS HB,
January 2002, pp. 18 and 21). You are to mail this decision, together
with CBP Form 19, to the protestant no later than 60 days from the date
of this letter.

No later than 60 days from the date of this letter, Regulations and
Rulings of the Office of International Trade will make the decision
available to CBP personnel, and to the public on the CBP Home Page on
the World Wide Web at [www.cbp.gov](http://www.cbp.gov/), by means of
the Freedom of Information Act, and by other means of public
distribution.

Sincerely,

Myles B. Harmon, Director

Commercial and Trade Facilitation Division