Foreign-Trade Zone 7 Mayaguez, Puerto Rico, Application for Subzone, Abbott Laboratories (Pharmaceutical Products), Barceloneta, Puerto Rico

An application has been submitted to the Foreign-Trade Zones (FTZ) Board (the Board) by the Puerto Rico Industrial Development Corporation, grantee of FTZ 7, requesting special-purpose subzone status for the pharmaceutical manufacturing facilities of Abbott Pharmaceuticals PR LTD. (APPR), Abbott Health Products, Inc. (AHP), and Abbott Biotechnology LTD (ABL), subsidiaries of Abbott Laboratories (Abbott), located in Barceloneta, Puerto Rico. The application was submitted pursuant to 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 May 17, 2005.

The proposed subzone (123 buildings of 2,151,957 square feet (approx. 90% mfg. sq. ft.) on 276 acres, with a possible expansion of 34 buildings of 2,330,579 sq. ft.) is comprised of one site located at Road No. 2, Km 58.0, Barceloneta, Puerto Rico. The Abbott facility (2,200 employees) manufactures, tests, packages, and warehouses pharmaceutical and diagnostic products, activities which it is proposing to perform under zone procedures.

It will be used to produce finished dose pharmaceutical formulations and diagnostic products. Initially, the company is proposing to produce the antibiotics, clarythromycin and erythromycin; and Depakote®, a treatment for epilepsy, migraine and bipolar disorder, under zone procedures. Materials sourced from abroad represent 5-10 percent of the value of the finished products manufactured under the proposed primary scope. Inverted tariff savings will initially result from the following ingredients: Beta Carb (HTSUS 2917.19.7050), hexamethyldisilozane (HTSUS 2931.00.9010), and hypromellose phtalate (HTSUS 3912.90.0090). Some 60 to 80 percent of the proposed production under zone procedures will be exported.

The application also requests authority to include a broad range of inputs and pharmaceutical final products that it may produce under FTZ procedures in the future. (New major activity in these inputs/products could require review by the FTZ Board.) General HTSUS categories of inputs include: 1108, 1212, 1301, 1302, 1515, 1516, 1520, 1521, 1702, 1905, 2106, 2207, 2302, 2309, 2501, 2508, 2510, 2519, 2520, 2526, 2710, 2712, 2807, 2809, 2811, 2814, 2815, 2816, 2817, 2821, 2823, 2825, 2826, 2827, 2829, 2831, 2832, 2833, 2835, 2836, 2837, 2839, 2840, 2841, 2842, 2844, 2846, 2851, 2901, 2902, 2903, 2904 (except for 2904.20.5000), 2905, 2906, 2907, 2908, 2909, 2910, 2911, 2912, 2913, 2914, 2915, 2916, 2917, 2918, 2919, 2920, 2921, 2922, 2923, 2924, 2925, 2926, 2927, 2928, 2929, 2930, 2931, 2932, 2933, 2934, 2935, 2936, 2937, 2938, 2939, 2940, 2941, 2942, 3001, 3002, 3003, 3004, 3005, 3006, 3102, 3104, 3301, 3302, 3305, 3401, 3402, 3403, 3404, 3502, 3503, 3505, 3506, 3507, 3802, 3804, 3808, 3809, 3815, 3822, 3823, 3824, 3906, 3910, 3911, 3912, 3913, 3914, 3915, 3919, 3920, 3921, 3923, 4016, (4202.92.1000, 4202.92.9060, 4202.99.1000, 4202.99.5000 (plastic only)), 4817, 4819, 4901, 4902, 7010, 7607, 8004, 8104, 8309, 8481, 9018, 9602. Duty rates for these materials range from duty-free to 17%.

Final products that may be produced from the inputs listed above include these general HTSUS categories: 2302, 2309, 2825, 2902, 2903, 2904, 2905, 2906, 2907, 2909, 2910, 2912, 2913, 2914, 2915, 2916, 2917, 2918, 2920, 2921, 2922, 2924, 2925, 2926, 2928, 2930, 2931, 2932, 2933, 2934, 2935, 2936, 2937, 2938, 2939, 2940, 2941, 2942, 3001, 3002, 3003, 3004, 3006, 3503, 3507, 3802, 3804, 3808, 3809, 3824, 3910, 3911, 3912, 3913, 3914 and 9018. Duty rates for these products range from duty-free to 7.5%.

Zone procedures would exempt Abbott from Customs duty payments on foreign materials used in production for export (some 60-80% of shipments). On domestic shipments, the company would be able to defer Customs duty payments on foreign materials, and to choose the duty rate that applies to finished products (duty-free) instead of the rates otherwise applicable to the foreign input materials (3.7% - 5.2%). The application indicates that the savings from zone procedures would help improve Abbott'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 is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at one of 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 St. NW, Washington, D.C. 20005; or

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

The closing period for their receipt is July 25, 2005. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period (to August 8, 2005).

A copy of the application and accompanying exhibits will be available for public inspection at the Office of the Foreign-Trade Zones Board's Executive Secretary at address Number 1 listed above, and at the U.S. Department of Commerce Export Assistance Center, Centro Internacional de Mercadeo Torre II, Suite 702, Carr. 165

Guaynabo, Puerto Rico 00968-8058.