02-1271. Foreign-Trade Zone 7-Mayaguez, Puerto Rico; Application for Subzone, Schering-Plough Products, L.L.C., (Pharmaceutical Products), Las Piedras, Puerto Rico

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the Puerto Rico Industrial Development Corporation, grantee of FTZ 7, requesting special-purpose subzone status for the pharmaceutical manufacturing plant of Schering-Plough Products, L.L.C. in Las Piedras, Puerto Rico. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR part 400). It was formally filed on January 10, 2002.

Schering-Plough's Las Piedras plant (3 bldgs./401,814 sq. ft. (including 84,814 square feet proposed) on 40 acres) is located at State Road No. 183, Km 2.6, Las Piedras, Puerto Rico. The facility (500 employees) produces finished pharmaceutical products and their intermediates, including Theo-Dur®, K-Dur®, Uni-Dur®, Normodayne/Labetalol®, Eulexin®, Claritin®, and Rebetol®. Foreign-sourced materials will account for some 40-50 percent of finished product value, and include items from the following general categories: chemically pure sugars, empty capsules for pharmaceutical use, protein concentrates, natural magnesium phosphates and carbonates, gypsum, anhydrite and plasters, petroleum jelly, paraffin and waxes, sulfuric acid, other inorganic acids or compounds of nonmetals, ammonia, zinc oxide, titanium oxides, fluorides, chlorates, sulfates, salts of oxometallic acids, radioactive chemical elements, compounds of rare earth metals, acyclic hydrocarbons, derivatives of phenols or peroxides, acetals and hemiacetals, phosphoric esters and their salts, diazo-compounds, glands for therapeutic uses, wadding, gauze and bandages, pharmaceutical glaze, hair preparations, lubricating preparations, albumins, prepared glues and adhesives, catalytic preparations, diagnostic or laboratory reagents, prepared binders, acrylic polymers, self-adhesive plates and sheets, other articles of vulcanized rubber, plastic cases, cartons, boxes, printed books, brochures and similar printed matter, carboys, bottles, and flasks, stoppers, caps, and lids, aluminum foil, tin plates and sheets, taps, cocks and valves, and medical instruments and appliances.

Zone procedures would exempt Schering-Plough from Customs duty payments on foreign materials used in production for export. Some 30-35 percent of the plant's shipments are exported. On domestic sales, the company would be able to choose the duty rates that apply to the finished products and intermediates (primarily duty-free) rather than the duty rates that would otherwise apply to the foreign-sourced materials noted above (duty-free to 20.0 percent). At the outset, zone savings would primarily involve choosing the finished product duty rate on a cholesterol absorption inhibitor, (HTSUS 3004.90.9060-duty-free), rather than the rate for a foreign-sourced active ingredient (bulk ezetimibe, HTSUS 2933.79.0800-7.9%). The application indicates that the savings from zone procedures will help improve the plant's international competitiveness.

In accordance with the Board's regulations, a member of the FTZ Staff has been designated examiner to investigate the application and report to the Board.

Public comment is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at one of the following addresses:

1. Submissions Via Express/Package Delivery Services: Foreign-Trade-Zones Board, U.S. Department of Commerce, Franklin Court Building—Suite 4100W, 1099 14th St. NW, Washington, DC 20005; or

2. Submissions Via the U.S. Postal Service: Foreign-Trade-Zones Board, U.S. Department of Commerce, FCB-Suite 4100W, 1401 Constitution Ave. NW., Washington, DC 20230.

The closing period for their receipt is March 18, 2002. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period (to April 2, 2002).

A copy of the application and accompanying exhibits will be available for public inspection at the Office of the Foreign-Trade Zones Board's Executive Secretary at address Number 1 listed above, and at the U.S. Department of Commerce Export Assistance Center, 525 F.D. Roosevelt Ave., Suite 905, San Juan, PR 00918.

Dated: January 10, 2002.

Dennis Puccinelli,

Executive Secretary.