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DEPARTMENT OF COMMERCE

Foreign-Trade Zones Board
[Docket 10-97]
 
Foreign-Trade Zone 38, Spartanburg, SC; Request for Manufacturing 
Authority, Zeuna Starker USA, Inc., (Automotive Exhaust Systems)


    An application has been submitted to the Foreign-Trade Zones Board 
(the Board) by the South Carolina State Ports Authority, grantee of FTZ 
38, pursuant to Sec. 400.28(a)(2) of the Board's regulations (15 CFR 
part 400), requesting authority on behalf of Zeuna Starker USA, Inc. 
(ZSUSA) (a subsidiary of Zeuna Starker GmbH & Co., KG, Germany), to 
manufacture automotive exhaust systems under FTZ procedures within FTZ 
38, with certain restrictions applicable to foreign stainless steel 
materials. It was formally filed on February 18, 1997.
    The ZSUSA plant is located at 2651 New Cut Road within the proposed 
Site 4 of FTZ 38 in the Wingo Corporate Park, Spartanburg, South 
Carolina (Docket 65-96, 61 FR 45400, 8-29-96). The ZSUSA plant (50 
employees) is used to manufacture exhaust systems for automotive 
applications that are sold in the U.S. and exported. Components sourced 
from abroad (about 80% of total) include: Catalytic converters, muffler 
boxes, flanges, fasteners, helical pressure and threaded inserts, 
brackets, stainless steel alloy pipe, and monoliths (duty rate range: 
0.1-5.3%). The


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application indicates that the majority of the plant's current output 
is shipped to BMW Manufacturing Corporation's auto plant in 
Spartanburg, South Carolina. Some two percent of the ZSUSA plant's 
shipments are exported.
    FTZ procedures would exempt ZSUSA from Customs duty payments on the 
foreign components used in export production. On its domestic sales, 
ZSUSA would be able to choose the duty rate during Customs entry 
procedures that applies to finished auto exhaust systems (2.7%) for the 
foreign inputs noted above, except that foreign status stainless steel 
pipe would be admitted to FTZ 38 in privileged foreign status (19 CFR 
146.41), making such materials subject to the full duty normally 
applicable. The motor vehicle duty rate (2.5%) could apply to the 
foreign components in the finished exhaust systems, which are not in 
privileged foreign status, and that are shipped to the BMW plant (FTZ 
Subzone 38A) or other U.S. motor vehicle assembly plants with subzone 
status for manufacture into finished motor vehicles under FTZ 
procedures. FTZ procedures would also exempt the foreign components 
that become scrap during the production process (about 0.08% for 
stainless steel pipe; 4% for the other foreign items) from Customs 
duties. The request indicates that the savings from FTZ procedures 
would help improve the ZSUSA 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 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 May 5, 1997. Rebuttal comments in response 
to material submitted during the foregoing period may be submitted 
during the subsequent 15-day period (to May 19, 1997).
    A copy of the application and the accompanying exhibits will be 
available for public inspection at the following location: Office of 
the Executive Secretary, Foreign-Trade Zones Board, U.S. Department of 
Commerce, Room 3716, 14th Street & Pennsylvania Avenue, NW, Washington, 
DC 20230.

    Dated: February 24, 1997.
John J. Da Ponte, Jr.,
Executive Secretary.
[FR Doc. 97-5404 Filed 3-4-97; 8:45 am]
BILLING CODE 3510-DS-P