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                             DEPARTMENT OF COMMERCE 
                           Foreign-Trade Zones Board 
                               [Docket No. A-2-80] 
                                  45 FR 9760
City of San Jose, Calif., Grantee, Foreign-Trade Zone No. 18; Petition for 
Permission To Withdraw Crushed Semiconductors in Zone Restricted Status 
From U.S. Foreign-Trade Zones

The City of San Jose, California, Grantee of Foreign-Trade Zone No. 18, 
has submitted to the Foreign-Trade Zones Board (Board) a petition from the 
zone manager requesting permission under section 3 of the Foreign-Trade 
Zones Act (19 U.S.C. 81C) to withdraw from the zone for domestic entry 
certain crushed semiconductors entered into the zone in "zone restricted" 
status (19 CFR 146.25 and 146.73(3)) for purpose of drawback.  Prior to 
entering the zone the items had been tested and found defective or 
sub-standard, and while in the zone they were crushed, converting
them to scrap which has some valuable content, primarily gold residue.

The petition refers to a specific shipment  of such merchandise presently 
held in the zone by Monolithic Memories Incorporated (Zone Lot SJ01607); 
however, because the situation is a common one experienced by the 
semiconductor industry, it is requested that the Board's approval allow 
the practice at all U.S. foreign-trade zones under like circumstances.  It 
is asserted by the petitioner that the present procedures result in firms 
sending their scrap abroad in order to reclaim the precious metals remaining
as residue, and that allowing this reclamation to take place in the U.S. 
would be beneficial to the domestic electronics industry.  A letter from 
the American Electronics Association reiterating this point was submitted 
as an appendix to the petition.

The Customs Service has ruled that the crushing process is sufficient to 
render the items "destroyed" for drawback purposes, despite the fact that 
some valuable scrap remains (U.S. Customs Service DRA-1-R:CD:D 210735, 
July 31, 1979).  The ruling states that in order to bring the scrap into 
Customs territory permission of the Board is necessary.  It is understood 
that any items entering Customs territory under these circumstances would 
be subject to Customs entry procedures.

A report and recommendation will be prepared on this matter for the Board.  
Since a general Board order is being requested to allow a general practice 
under like circumstances, all interested parties are invited to submit 
their views on the proposal.  Because the Board must determine whether 
the practice in question is in the public interest comments on this point 
should be included.  Submissions should be postmarked before March 14, 
1980 and addressed to the: Executive Secretary, Foreign-Trade Zones Board, 
U.S. Department of Commerce, Room 6886-B, Main Commerce Building, 
Washington, D.C. 20230, Phone (202)377-2862.

Persons wishing to review the petition may do so at the above address 
during the comment period. 

   Dated: February 8, 1980. 

John J. Da Ponte, Jr., 
   Executive Secretary, Foreign-Trade Zones Board. 
[FR Doc. 80-4632 Filed 2-12-80; 8:45 am]