E7-17036. Foreign-Trade Zone 7-Mayaguez, Puerto Rico, Application for Subzone, MOVA Pharmaceutical Corporation (Pharmaceutical Manufacturing), Manatí, Puerto Rico

An application has been submitted to the Foreign-Trade Zones (FTZ) Board (the Board) by the Puerto Rico Industrial Development Company, grantee of FTZ 7, requesting special-purpose subzone status with manufacturing authority for pharmaceutical products at the pharmaceutical manufacturing facility of MOVA Pharmaceutical Corporation (MOVA), located in Manat´, Puerto Rico. The application was submitted pursuant to 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 August 14, 2007.

The proposed subzone facility (104 acres, 17 buildings totaling 410, 000 sq. ft., 40 percent of which is devoted to manufacturing) is located at State Road 670, Km 2.7 in Manat´, Puerto Rico. The company has indicated that the square footage of the buildings devoted to manufacturing operations could increase to include up to 70 percent of the total in the near future.

The MOVA facility (310 employees) has requested authority to manufacture two pharmaceutical products, Januvia/MK-431A (HTSUS 3004.90) and sitagliptin (HTSUS 2933.59), on behalf of Merck, Sharpe & Dohme Quimica de Puerto Rico, Inc. Duty rates on the finished products range from duty-free to 6.5 percent, ad valorem. Foreign-origin material inputs to be used in the manufacturing process (up to 25 percent of total materials, by value) include sitagliptin (HTSUS 2933.59), metformin hydrochloride (HTSUS 2925.20), enamine amide (HTSUS 2933.59), and butyl josphos (HTSUS 2931.00), which have duty rates of 3.7 percent to 6.5 percent, ad valorem.

The application also requests authority to include a broad range of inputs and finished pharmaceutical products that MOVA may produce under FTZ procedures in the future. (As required by the Board's regulations, new major activity involving these inputs/products would require review by the Board.) The duty rates for these inputs and final products range from duty-free to 10 percent.

FTZ procedures would exempt MOVA from customs duty payments on foreign materials used in export production to non-NAFTA countries. Some 30 to 40 percent of the plant's shipments are exported. On its domestic shipments and sales to NAFTA countries, MOVA could defer duty until the products are entered for consumption or exported, and choose the lower duty rate that applies to the finished product for the foreign components used in production. The company may also realize certain logistical/procedural savings related to zone-to zone transfers and direct delivery procedures as well as savings on materials that become scrap/waste during manufacturing. The application indicates that FTZ procedures would help improve the plant'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 the address below. The closing period for their receipt is October 29, 2007. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period (to November 13, 2007).

A copy of the application will be available for public inspection at each of the following locations: U.S. Department of Commerce Export Assistance Center, Centro Internacional de Mercado, Tower II, Suite 702, Road 165, Guaynabo, Puerto Rico, 00968-8058; and, Office of the Executive Secretary, Foreign-Trade Zones Board, Room 2111, U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington, D.C. 20230-0002.

For further information, contact Diane Finver at [e-mail] or [phone].

Dated: August 21, 2007.

Andrew McGilvray,

Executive Secretary.