Foreign-Trade Zone 52-Suffolk County, NY, Application for Subzone Status, Festo Corporation Facilities (Pneumatic Industrial Automation Components), Hauppauge, NY

An application has been submitted to the Foreign-Trade Zones Board (the Board) by Suffolk County, New York, grantee of FTZ 52, requesting special-purpose subzone status for the pneumatic industrial automation components manufacturing facilities of Festo Corporation (Festo) (a subsidiary of Festo AG, of Germany), located in Hauppauge, New York. 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 June 23, 2003.

The proposed subzone would include Festo's two manufacturing facilities located in Suffolk County, Long Island: Site 1 (8 acres/99,000 sq. ft.)—located at 395 Moreland Road, Hauppauge, New York; and, Site 2 (5 acres/53,000 sq. ft.)—located at 430 Wireless Boulevard, Hauppauge, about one quarter of a mile to the east of Site 1. The facilities (200 employees) are used to produce pneumatic industrial automation components, including pneumatic cylinders, pneumatic valves and valve manifolds, and pneumatic and electronic integrated control systems (HTSUS 8412.31, 8481.20, 8537.10, 8428.90), and to distribute similar imported components for export and the U.S. market. The manufacturing process at the facilities involves machining, assembly, and testing of up to 130,000 units annually. Components purchased from abroad (about 40% of finished component value) used in manufacturing include: Greases, plastic gaskets/profiles/tubes/rolls/sheet/boxes, belts, rubber tubes and o-rings, packaging material, casters, base metal mountings, flex tubing, clasps, hydraulic engines, pumps, air compressors, wooden pins/dowels, stainless and alloy steel products (must be admitted under privileged foreign status (19 CFR 146.41)), fasteners, springs, washers, articles of aluminum, air dryers and purifiers, sprayers and related parts, pneumatic and hydraulic valves, regulators, ballcocks, bearings, transmissions, transmission/crankshafts, flanges, gears, clutches, couplings, chains, sprockets, electrical connectors, motors, generators, transformers, converters, magnets, lithium batteries, capacitors, printed circuit boards, fuses, relays, switches, lampholders/sockets, panel/distribution boards, controllers, circuit breakers, diodes, conductors, fiber optic cable, and liquid meters (2003 duty rate range: Free—24%).

FTZ procedures would exempt Festo from Customs duty payments on the foreign component inputs used in export production. On its domestic sales and exports to NAFTA markets, the company would be able to choose the duty rate that applies to finished industrial automation components (free—2.7%) for the foreign-sourced inputs noted above. Festo would be able to defer Customs duty payments on the foreign-origin finished industrial automation components that would be admitted to the proposed subzone for U.S. distribution. Duties would be deferred or reduced on foreign production equipment admitted to the proposed subzone until which time it becomes operational. The application indicates that subzone status would help improve the facilities' 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 on the application is invited from interested parties. Submissions (original and three copies) shall be addressed to the Board's Executive Secretary at 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 Street, NW., Washington, DC 20005; or,

2. Submissions via the U.S. Postal Service: Foreign-Trade Zones Board, U.S. Department of Commerce, FCB-4100W, 1401 Constitution Ave., NW., Washington, DC 20230.

The closing period for their receipt is September 2, 2003. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period (to September 15, 2003).

A copy of the application will be available for public inspection at the Office of the Foreign-Trade Zones Board's Executive Secretary at address No.1 listed above and at the U.S. Department of Commerce Export Assistance Center, 40th Floor, 20 Exchange Place, New York, NY 10005.