Foreign-Trade Zone 61-San Juan, Puerto Rico, Expansion of Facilities and Manufacturing Authority-Subzone 61D, 61E, Merck, Sharp & Dohme Quimica Plants (Pharmaceuticals); Arecibo and Barceloneta, Puerto Rico

Applications have been submitted to the Foreign-Trade Zones Board (the Board) by the Puerto Rico Exports Development Corporation (PREDC) (formerly known as the Commercial and Farm Development Corporation of Puerto Rico), grantee of FTZ 61, requesting on behalf of Merck, Sharp & Dohme Quimica de Puerto Rico, Inc. (MSD), to add capacity and to expand the scope of manufacturing authority under zone procedures within Subzone 61D and 61E, at the MSD plants in Arecibo and Barceloneta, Puerto Rico. The applications were formally filed on August 10, 2000.

Subzone 61D was approved by the Board in 1995 at a single site (1 bldg./150,000 sq. ft. on 18.45 acres) located at Km. 60, Road PR-2, in the municipality of Arecibo, Puerto Rico, with authority granted for the manufacture of finished pharmaceuticals (Board Order 741, 60 FR 27272, 5/23/95). MSD is now proposing to expand acreage, add 2 buildings and expand the existing building. The proposed subzone would then include 3 bldgs. consisting of 286,000 sq. ft. (a 90% increase) on 38.18 acres.

Subzone 61E was approved by the Board in 1995 at a single site (76 bldgs./440,616 sq. ft. on 221 acres) located at Road PR-2, Km. 57, in the municipality of Barceloneta, Puerto Rico, with authority granted for the manufacture of pharmaceutical bulk chemicals and intermediates used in Merck's human and animal health products and finished animal health and agricultural chemical products for its AgVet (agricultural/veterinary) Division (Board Order 742, 60 FR 27272, 5/23/95). MSD is now proposing to add 16 buildings and expand existing buildings. The proposed subzone would then include 92 bldgs. consisting of 504,756 sq. ft. (a 15% increase) on 221 acres.

The applications also request to expand the scope of authority for manufacturing activity conducted under FTZ procedures at Subzone 61D and Subzone 61E to include additional general categories of inputs that have recently been approved by the Board for other pharmaceutical plants. They include chemically pure sugars, empty capsules for pharmaceutical use, protein concentrates, natural magnesium phosphates and carbonates, gypsum, anhydrite and plasters, petroleum jelly, paraffin and waxes, sulfuric acid, other inorganic acids or compounds of nonmetals, ammonia, zinc oxide, titanium oxides, fluorides, chlorates, sulfates, salts of oxometallic acids, radioactive chemical elements, compounds of rare earth metals, acyclic hydrocarbons, derivatives of phenols or peroxides, acetals and hemiacetals, phosphoric esters and their salts, diazo-compounds, glands for therapeutic uses, wadding, gauze and bandages, pharmaceutical glaze, hair preparations, lubricating preparations, albumins, prepared glues and adhesives, catalytic preparations, diagnostic or laboratory reagents, prepared binders, acrylic polymers, self-adhesive plates and sheets, other articles of vulcanized rubber, plastic cases, cartons, boxes, printed books, brochures and similar printed matter, carboys, bottles, and flasks, stoppers, caps, and lids, aluminum foil, tin plates and sheets, taps, cocks and valves, and medical instruments and appliances.

FTZ procedures would exempt MSD from Customs duty payments on the foreign components used in export activity. On its domestic sales, the company would be able to elect the duty rates that applies to finished products (primarily duty-free for finished pharmaceuticals and up to 14.6% for intermediates) for the foreign materials noted above (duty rates ranging from duty-free to 14.5%). The application indicates that the expanded use of FTZ procedures will help improve MSD's international competitiveness.

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 address below. The closing period for their receipt is October 23, 2000. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period (to November 6, 2000).

Copies of the applications will be available for public inspection at the following locations:

U.S. Department of Commerce, Export Assistance Center, 525 F.D. Roosevelt Ave., Suite 905, San Juan, PR 00918

Office of the Executive Secretary, Foreign-Trade Zones Board, Room 4008, U.S. Department of Commerce, 14th Street and Pennsylvania Avenue, NW, Washington, DC 20230.