E6-19302. Foreign-Trade Zone 68 -- El Paso, Texas, Request for Manufacturing Authority (Vacuum Cleaner Products)

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the City of El Paso, grantee of Foreign-Trade Zone (FTZ) 68, requesting authority on behalf of Electrolux Home Care Products Ltd. (Electrolux) for authority to manufacture vacuum cleaners and vacuum cleaner parts under FTZ procedures within FTZ 68 in El Paso, Texas. 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 November 7, 2006.

Electrolux operates a manufacturing and distribution facility (3 buildings, 300 employees) located at: 9600 Pan American Way; 9500 Plaza Circle; and, 9660 Plaza Circle in El Paso, within FTZ 68. The facility is used to manufacture and distribute vacuum cleaners and related parts and accessories (up to 1,800,000 units annually). The dutiable inputs used in the manufacturing process include: lubricants; shampoo; tape; foam filters; plastics; bags and bag hardware; articles of conveyance; straps; rubber belts; gaskets, washers and seals; grommets; belts; filter packages; screws; springs; micro-sprayers; insulated electrical conductors; motor assemblies; vacuums and vacuum components; button assemblies; switches; motor control centers; and, printed circuit assemblies. Duty rates on the imported components range from 2.0 percent to 8.5 percent. The finished products that Electrolux would manufacture under FTZ procedures include: foam filters; bag hardware; rubber belts; cartons; filters; micro-sprayers; insulated electrical conductors; vacuum cleaners and components; motor assemblies; and, button assemblies. Duty rates on the finished products range from duty free to 4.2 percent.

This application requests authority for Electrolux to conduct the activity under FTZ procedures, which would exempt Electrolux from Customs duty payments on the foreign components used in export production. Approximately 2.5 percent of production is exported. On domestic sales, the company could choose the lower duty rate that applies to the finished products for the foreign components noted above. Electrolux also anticipates realizing additional savings through duty deferral, the elimination of duties on materials that become scrap/waste during production, inventory tax reduction and other logistical benefits. The application indicates that the FTZ-related savings would improve the facility'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 copies) shall be addressed to the Board's Executive Secretary at the address listed below. The closing period for their receipt is January 16, 2007. Rebuttal comments in response to material submitted during the forgoing period may be submitted during the subsequent 15-day period (to January 29, 2007.

A copy of the application and accompanying exhibits will be available for public inspection at each of the following addresses: the City of El Paso, 501 George Perry Boulevard, Suite 1, El Paso, Texas 79906; and, Office of the Executive Secretary, Foreign-Trade Zones Board, Room 1115, U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington, DC 20230.

Dated: November 7, 2006.

Pierre V. Duy,

Acting Executive Secretary.