Foreign-Trade Zone 65 - Panama City, FL, Application for Subzone Status, Eastern Shipbuilding Group, Inc., (Shipbuilding)

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the Port of Panama City, Florida, grantee of FTZ 65, requesting special-purpose subzone status for the shipbuilding facilities of Eastern Shipbuilding Group (ESG), in Panama City, Florida. 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 5, 2007.

The proposed subzone would comprise ESG's facilities at two sites in Bay County, Florida: Site 1 “Nelson Street Shipyard” (27.2 acres/4 parcels/82,500 sq.ft.) - 2200 Nelson Street, Panama City, Florida; and, Site 2 “Allanton Shipyard” (142.5 acres, 67,300 sq.ft.) - 13300 Allanton Road, Panama City, located 15 miles southeast of Site 1. The ESG facilities (580 employees) are used for the construction, fabrication, and repair of commercial and military oceangoing vessels for domestic and international customers. Foreign components that may be used at the ESG facilities (representing 25 - 40%% of material value) may include plastic tubes/pipes/hoses/fittings/floor coverings/seals/gaskets/o-rings, rubber mats/gaskets/o-rings/seals/knobs/dampeners, carpeting (will be admitted under privileged foreign (PF) status (19 CFR § 146.41)), articles of plaster, tableware, steel and iron pipe/tube/profiles/casings/fittings, stainless steel pipe/tube/flanges, doors, windows, structures, tanks, drums, LNG containers, anchors, articles of copper, couplings (of nickel, aluminum, lead, zinc, tin), articles of chromium, flexible tubing, marine steam turbines, engines (diesel and spark ignition) and parts, turbojets, propellers, gas turbines and parts, pumps, compressors, fans, air conditioners, furnaces and parts, heat exchange units, chillers, water heaters and parts, centrifuges, filters and filtering equipment, cranes, trash compactors, valves, bearings (items subject to AD/CVD orders will be admitted under PF status), gears, flywheels, clutches, parts of transmissions, generators and sets, starters, radio transceivers and remote controllers, radar equipment, parts of signaling equipment, electric switchgear and control panels, ignition wiring sets, compasses, instruments and meters, navigational instruments, thermostats, marine chronometers, furniture, and lamps (duty rate range: free - 9.0%%; 25¢/ea.+3.9%%, ad valorem; 84¢/bbl).

FTZ procedures would exempt ESG from customs duty payments on the foreign components used in export activity. On its domestic sales, the company would not be required to pay applicable customs duties on the foreign components, or it would be able to elect the duty rate that applies to finished oceangoing vessels (duty free) for the foreign components when the vessels are processed for customs entry. The manufacturing activity conducted under FTZ procedures would be subject to the “standard shipyard restriction” applicable to foreign-origin steel mill products (e.g., angles, pipe, plate), which requires that full customs duties be paid on such items. The application indicates that the savings from FTZ procedures 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 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 August 13, 2007. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to August 27, 2007.

A copy of the application and accompanying exhibits will be available for public inspection at each of the following locations: Office of the Area Port Director, U.S. Customs and Border Protection, 2831 Talleyrand Avenue, Jacksonville, FL 32206; and, the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 2111, U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington, DC 20230-0002.

For further information, contact Pierre Duy, examiner, at pierre_duy@ita.doc.gov, or (202) 482-1378.