Opinion ID: 450368
Heading Depth: 1
Heading Rank: 1

Heading: oil import license program.

Text: 7 The federal oil import license program as it existed a decade ago lies at the core of this controversy. In order to put the rather daedalian nature of the underlying events and proceedings into proper perspective, it is advisable first to focus on the scope and extent of the applicable regulatory scheme. 8 In the event that any article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security, Congress has authorized the President to take such action ... as he deems necessary to adjust the imports of such article and its derivatives so that such imports will not threaten to impair the national security.... 19 U.S.C. Sec. 1862(b) (1982). The predecessor statutes contained similar authorizations. President Eisenhower exercised this authority to impose a system of quotas on the importation of petroleum and petroleum products in 1959. Presidential Proclamation No. 3279, 3 C.F.R. 11 (1959-63 Comp.). More than a decade later, on April 18, 1973, President Nixon issued Presidential Proclamation No. 4210, 3 C.F.R. 31, 32 (1974), 38 Fed.Reg. 9645 (1973), which provided for a gradual transition from the existing quota method of adjusting imports of petroleum and petroleum products to a long-term program for adjustment of imports of petroleum and petroleum products through the suspension of existing tariffs and the institution of a system of fees applicable to imports of crude oil, unfinished oils, and finished products.... See generally Federal Energy Administration v. Algonquin SNG, Inc., 426 U.S. 548, 552-53, 96 S.Ct. 2295, 2298-99, 49 L.Ed.2d 49 (1976). Section 1(a) of that proclamation prohibited the entry of crude oil, unfinished oils, or finished products into the United States except by or for the account of a person to whom a license has been issued by the Secretary of the Interior pursuant to an allocation made to such person by the Secretary. 38 Fed.Reg. at 9646. Section 2(a) established the maximum levels of imports which could be made without the prior payment of fees. Id. at 9647-48. Section 3(a) established a system of fees for licenses issued under allocations of imports of crude oil, unfinished oils, and finished products over the [maximum] levels of imports. Id. at 9648-49. For residual fuel oil, section 3(a) imposed a fee of thirty cents per barrel as of May 1, 1974, and forty-two cents per barrel as of November 1, 1974. Id. Section 3(b) provided that: 9 Except for allocations and licenses to which the license fee is not applicable, applications for allocations of imports of crude oil, unfinished oils, or finished products shall be accompanied by the applicant's certified check ... in the appropriate amount.... 10 Id. at 9649. 11 Section 4(a) authorized the Secretary to issue regulations for the purpose of implementing the proclamation. Id. On February 11, 1974, the Secretary issued proposed regulations, 39 Fed.Reg. 5193 (1974), amending Oil Import Regulation 1 (Revision 5) (1974), to conform to Presidential Proclamation 4210. On March 19, 1974, the Secretary issued final regulations governing the allocation period from May 1, 1974 through April 30, 1975. See 39 Fed.Reg. 10242 (1974) (codified at 32A C.F.R. Ch. X (1974)). 12 Section 12 of the final regulations controlled allocations of imports of residual fuel oil, not subject to license fees, into District I, so-called. (District I encompassed the eastern seaboard from Maine to Florida.) 32A C.F.R. Ch. X, Sec. 12, 39 Fed.Reg. at 10246. Section 12(b) provided in material part that: 13 To be eligible for an import allocation not subject to license fee of residual fuel oil pursuant to this section a person must: 14 (1) Be in the business in District I of selling residual fuel oil ... and have under his management and operational control a deepwater terminal located in District I into which there has been delivered residual fuel oil ... which he owned at the time of delivery, or 15 (2) Be in the business in District I of selling residual fuel oil ... and have a throughout agreement with a deepwater terminal operator under which agreement the person has delivered to the terminal residual fuel oil ... which he owned when it was so delivered. 16 32A C.F.R. Ch. X, Sec. 12(b), 39 Fed.Reg. at 10246. Section 12(c) further required that: 17 A person seeking an import allocation not subject to license fee ... must file an application with the Director [of the Office of Oil and Gas] on such form as he may prescribe. The application shall disclose such information as the Director may deem necessary in such detail as he may require. 18 32A C.F.R. Ch. X, Sec. 12(c), 39 Fed.Reg. at 10246. The final regulations required that applications be filed by March 31, 1974, in accordance with Sec. 5(a). Id. Section 12(d) limned the allocation to import residual fuel oil into District I which each eligible applicant would receive. 32A C.F.R. Ch. X, Sec. 12(d), 39 Fed.Reg. at 10246. And, Sec. 12(e) declared that: 19 No allocation made pursuant to this section may be sold, assigned or otherwise transferred. 20 32A C.F.R. Ch. X, Sec. 12(e), 39 Fed.Reg. at 10246. 21 One ineligible for an allocation exempt from license fees could apply for an allocation subject to such fees. 32A C.F.R. Ch. X, Sec. 32 (1974). Section 32(i)(1) imposed the fee schedule mandated by Presidential Proclamation 4210. 32A C.F.R. Ch. X, Sec. 32(i)(1) (1974). Once the applicant had obtained an allocation, a license would issue specifying the amount of oil which could be imported. 32A C.F.R. Ch. X, Sec. 7(a), 39 Fed.Reg. at 10243. Section 7(b) declared that: 22 No license issued pursuant to this section may be sold, assigned, or otherwise transferred. 23 32A C.F.R. Ch. X, Sec. 7(b), 39 Fed.Reg. at 10243. Section 18 required that a valid oil import license must be presented to the federal Customs Service before any petroleum product subject to the regulations could be entered for consumption. 32A C.F.R. Ch. X, Sec. 18. 24