05-10461. Foreign-Trade Zone 99 - Wilmington, Delaware, Expansion of Subzone and Manufacturing Authority Subzone 99D, AstraZeneca Pharmaceuticals LP (Pharmaceutical Products), Newark, Delaware

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the Delaware Economic Development Office, grantee of FTZ 99, requesting to expand the subzone and the scope of manufacturing authority under zone procedures within Subzone 99D, at the AstraZeneca Pharmaceuticals LP (AstraZeneca) facility in Newark, Delaware. It was formally filed on May 17, 2005.

Subzone 99D was approved by the Board in 1994 at AstraZeneca's plant (2 bldgs. on 156 acres/520,700 sq. ft.) located at 587 Old Baltimore Pike, Newark, Delaware, some 10 miles west of Wilmington. The facility (530 employees) is used to produce and/or distribute a wide range of pharmaceuticals, with specific authority granted for the manufacture of several products under zone procedures (Board Order 717, 12/02/94).

Subzone 99D is currently requesting to expand the subzone at the existing facility (Site 1) to include additions to existing buildings (totaling 114,100 sq. ft.) and to include another site (Site 2) for the manufacture of clinical trial products. AstraZeneca is also requesting to include in its scope of authority general categories of inputs and final products that it may produce under zone procedures in the future.

Proposed Site 2 (30 buildings, 3,226,805 sq. ft. (526,552 mfg. sq. ft.) on 163 acres, which includes a potential expansion of 7 buildings totaling 1,154, 298 sq. ft. (318,548 mfg. sq. ft.)) is located at 1800 Concord Pike, Wilmington, Delaware, some 20 miles from Site 1. It will be used to produce finished dose pharmaceutical formulations of clinical trial products (HTSUS 3004.90, duty-free). Materials sourced from abroad represent 90 to 95 percent of all materials used in production proposed for zone procedures. Inverted tariff savings will initially result from the following bulk active ingredients, all subject to a 6.5% duty rate: AZD 0328 (HTSUS 2934.99.9000), AZD 5455 (HTSUS 2933.39.9100) and AZD 4522 (HTSUS 2935.00.6000). Finished dose products will be transferred to Site 1 for packaging and shipping.

The application also requests authority to include a broad range of inputs and pharmaceutical final products that it may produce under FTZ procedures in the future. (New major activity in these inputs/products could require review by the FTZ Board.) General HTSUS categories of inputs include: 1108, 1212, 1301, 1302, 1515, 1516, 1520, 1521, 1702, 1905, 2106, 2207, 2302, 2309, 2501, 2508, 2510, 2519, 2520, 2526, 2710, 2712, 2807, 2809, 2811, 2814, 2815, 2816, 2817, 2821, 2823, 2825, 2826, 2827, 2829, 2831, 2832, 2833, 2835, 2836, 2837, 2839, 2840, 2841, 2842, 2843, 2844, 2846, 2851, 2901, 2902, 2903, 2904 (except for HTS 2904.20.5000), 2905, 2906, 2907, 2908, 2909, 2910, 2911, 2912, 2913, 2914, 2915, 2916, 2917, 2918, 2919, 2920, 2921, 2922, 2923, 2924, 2925, 2926, 2927, 2928, 2929, 2930, 2931, 2932, 2933, 2934, 2935, 2936, 2937, 2938, 2939, 2940, 2941, 2942, 3001, 3002, 3003, 3004, 3005, 3006, 3102, 3104, 3301, 3302, 3305, 3401, 3402, 3403, 3404, 3502, 3503, 3505, 3506, 3507, 3802, 3804, 3808, 3809, 3815, 3822, 3823, 3824, 3901, 3906, 3910, 3911, 3912, 3913, 3914, 3915, 3919, 3920, 3921, 3923, 4016, (4202.92.1000, 4202.92.9060, 4202.99.1000, 4202.99.5000 (plastic only)), 4817, 4819, 4901, 4902, 5403, 7010, 7607, 8004, 8104, 8309, 8481, 9018, and 9602. The duty rates on these products range from duty-free to 17%.

Final products that may be produced from the inputs listed above include these general HTSUS categories: 2302, 2309, 2902, 2903, 2904, 2905, 2906, 2907, 2909, 2910, 2912, 2913, 2914, 2915, 2916, 2917, 2918, 2920, 2921, 2922, 2923, 2924, 2925, 2926, 2928, 2930, 2931, 2932, 2933, 2934, 2935, 2936, 2937, 2938, 2939, 2941, 2942, 3001, 3002, 3003, 3004, 3006, 3802, 3804, 3808, 3809, 3824, 3910, 3911, 3912, 3913, and 3914. The duty rates on these products range from duty-free to 7.5%.

Zone procedures would exempt AstraZeneca from Customs duty payments on foreign materials used in production for export. On domestic shipments, the company would be able to defer Customs duty payments on foreign materials, and to choose the duty rate that applies to finished products (duty-free) instead of the rates otherwise applicable to the foreign input materials (6.5%). The application indicates that the savings from zone procedures would help improve AstraZeneca'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, D.C. 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, D.C. 20230.

The closing period for their receipt is July 25, 2005. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period (to August 8, 2005).

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, The Curtis Center - Suite 580, West 601 Walnut Street - Independence Square West, Philadelphia, PA 19106-3304.

Dated: May 19, 2005.

Dennis Puccinelli,

Executive Secretary.