02-4429. Grant of Authority for Subzone Status; Austal USA, LLC (Shipbuilding); Mobile, AL

Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:

WHEREAS, by an Act of Congress approved June 18, 1934, an Act “To provide for the establishment . . . of foreign-trade zones in ports of entry of the United States, to expedite and encourage foreign commerce, and for other purposes,” as amended (19 U.S.C. 81a-81u) (the FTZ Act), the Foreign-Trade Zones Board (the Board) is authorized to grant to qualified corporations the privilege of establishing foreign-trade zones in or adjacent to U.S. Customs ports of entry;

WHEREAS, the Board's regulations (15 CFR part 400) provide for the establishment of special-purpose subzones when existing zone facilities cannot serve the specific use involved, and when the activity results in a significant public benefit and is in the public interest;

WHEREAS, an application from the City of Mobile, Alabama, grantee of FTZ 82, for authority to establish special-purpose subzone status for the shipbuilding facility of Austal USA, LLC (Austal), in Mobile, Alabama, was filed by the Board on January 9, 2001, and notice inviting public comment was given in the Federal Register (FTZ Docket 1-2001, 66 FR 3984, 1-17-2001); and,

WHEREAS, the Board adopts the findings and recommendations of the examiner's report, and finds that the requirements of the FTZ Act and Board's regulations would be satisfied, and that approval of the application would be in the public interest if approval were given subject to the standard shipyard restriction on foreign steel mill products;

NOW, THEREFORE, the Board hereby grants authority for subzone status at the shipbuilding facility of Austal USA, LLC, in Mobile, Alabama (Subzone 82H), at the location described in the application, subject to the FTZ Act and the Board's regulations, including Section 400.28, and subject to the following special conditions:

1. Any foreign steel mill product admitted to the subzone, including plate, angles, shapes, channels, rolled steel stock, bars, pipes and tubes, not incorporated into merchandise otherwise classified, and which is used in manufacturing, shall be subject to Customs duties in accordance with applicable law, unless the Executive Secretary determines that the same item is not then being produced by a domestic steel mill.

2. In addition to the annual report, Austal shall advise the Board's Executive Secretary (§ 400.28(a)(3)) as to significant new contracts with appropriate information concerning foreign purchases otherwise dutiable, so that the Board may consider whether any foreign dutiable items are being imported for manufacturing in the subzone primarily because of subzone status and whether the Board should consider requiring Customs duties to be paid on such items.

3. All foreign-origin quota-class merchandise must be admitted to the subzone under privileged domestic status (19 CFR 146.43(a)(2)).

Signed at Washington, DC, this 12th day of February 2002.

Faryar Shirzad,

Assistant Secretary of Commerce for Import Administration, Alternate Chairman, Foreign-Trade Zones Board.