E8-25950. Foreign-Trade Zone 38 - Spartanburg, South Carolina

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the South Carolina State Ports Authority, grantee of FTZ 38, requesting special-purpose subzone status for the footwear and apparel warehousing and distribution facility of adidas Sales, Inc. (adidas), located in Spartanburg, South Carolina. 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 October 20, 2008.

The adidas facility (1,959,293 sq. ft. /251 acres, 1,300 employees) is located at 685 Cedar Crest Road, Spartanburg, South Carolina. The facility is used for warehousing and distribution of foreign- origin apparel for the U.S. market and export. FTZ procedures would be utilized to support adidas' U.S.-based distribution activity. Finished apparel products to be admitted to the proposed subzone for distribution would include men's, boys', women's and girls' shoes, coats, suits, blouses, shirts, tops, jumpers, underwear, hosiery, pajamas, athletic wear, scarves, shawls, mufflers, gloves/mittens, and infants' apparel. Certain textile fabrics (wool, cotton, man-made fiber) would also be distributed from the proposed subzone. Additional products that would be admitted to the proposed subzone for distribution are umbrellas, various instruments, sporting goods, sunglasses, cameras, jewelry, plates, leather goods, boxes, cases and paints. All foreign-origin apparel and textile products that are subject to quotas will be admitted to the proposed subzone under privileged foreign status (19 CFR § 146.41) or domestic (duty paid) status (19 CFR § 146.43). The applicant is not seeking manufacturing or processing authority with this request.

FTZ procedures would exempt adidas from customs duty payments on foreign products that are re-exported (about 2% of shipments). On domestic sales, duty payments would be deferred until the foreign merchandise is shipped from the facility and entered for U.S. consumption. Certain logistical/supply chain management savings would also be realized through subzone status. The application indicates that the savings from FTZ procedures would help improve the facility's international competitiveness.

In accordance with the Board's regulations, Claudia Hausler of the FTZ Staff is 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 the address below. The closing period for their receipt is December 29, 2008. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to January 13, 2009.

A copy of the application and accompanying exhibits will be available for public inspection at each of the following locations: Greenville U.S. Department of Commerce Export Assistance Center, Buck Mickel Center at Greenville Technical College, 216 S. Pleasantburg Drive, Suite 243, Greenville, South Carolina; and, Office of the Executive Secretary, Foreign-Trade Zones Board, Room 2111, U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington, DC 20230-0002. For further information, contact Claudia Hausler at [e-mail], or [phone].

Dated: October 22, 2008.

Andrew McGilvray,

Executive Secretary.