E7-3512. Foreign-Trade Zone 196 - Fort Worth, Texas, Request for Manufacturing Authority, Motorola, Inc., (Mobile Phone Kitting)

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the Alliance Corridor, Inc., grantee of FTZ 196, requesting authority on behalf of Motorola, Inc. (Motorola) to perform mobile phone kitting under FTZ procedures within FTZ 196. The application was filed on February 16, 2007.

The Motorola facilities (3,800 employees, annual capacity for up to 50 - 60 million mobile phone sets) are located at multiple locations (including those of affiliates and third-party contractors) within Sites 1 and 2 of FTZ 196, and include 4801 Westport Parkway and 15005 Peterson Court, in Fort Worth, Texas. Motorola has requested authority to process (kit) certain imported components into mobile phone sets (2006 HTSUS 8525.20 and proposed 2007 HTSUS 8517.12 and 8517.69 - the phones enter the United States duty-free). The company may source the following potentially dutiable components from abroad (representing 95% of total materials) for processing under FTZ procedures, as described in its application: Nicad batteries (HTSUS 8507.80), power supplies (HTSUS 8504.40), lithium batteries (HTSUS 8507.30), cables (2006 HTSUS 8544.41 and proposed 2007 HTSUS 8544.42), connectors and plugs (HTSUS 8536.69), decals (3919.90), plastic holsters (HTSUS 3926.90), leather carrying cases (HTSUS 4202.31.60.00), leather pouches/cases (HTSUS 4202.91.00.90), plastic carrying cases (HTSUS 4202.92.90.60), leather straps (HTSUS 4205.00.40.00), wrist straps (HTSUS 6307.90), key pads fitted with connectors (HTSUS 8537.10), external speaker sets (HTSUS 8518.22), headsets with microphone (HTSUS 8518.30) and hands free speaker kits (HTSUS 8518.90). Duty rates on these inputs range from duty-free to 17.6 percent, ad valorem.

FTZ procedures would allow Motorola to elect the finished-product duty rate for the imported components listed above. The application indicates that most of the FTZ savings would result from choosing the duty-free rate on mobile phones for imported nicad and lithium batteries (duty rates 3.4% and 2.5% ad valorem, respectively). The company indicates that it would also realize logistical/paperwork savings and duty-deferral savings under FTZ procedures. Motorola's application states that the above-cited savings from zone procedures could help improve the international competitiveness of its Texas facilities.

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 the address below. The closing period for their receipt is April 30, 2007. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to May 15, 2007.

A copy of the application and accompanying exhibits will be available for public inspection at each of the following locations: U.S. Department of Commerce Export Assistance Center, 808 Throckmorton Street, Fort Worth, TX 76102-6315; and, Office of the Executive Secretary, Foreign-Trade Zones Board, Room 2814B, U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington, D.C. 20230-0002.

For further information, contact Liz Whiteman at [phone].

Dated: February 20, 2007.

Andrew McGilvray,

Executive Secretary.