FTZ for Geotextiles Approved in Georgia

On April 8, 2013, Georgia Foreign-Trade Zone, Inc., grantee of FTZ 26, submitted a notification of proposed production activity to the Foreign-Trade Zones (FTZ) Board on behalf of PBR, Inc. d/b/a SKAPS Industries (SKAPS Industries), in Athens, Georgia. The FTZ Board has determined that no further review of the activity is warranted at this time. The production activity described in the notification is authorized for an initial period of five years (to 8-23-2018), subject to the FTZ Act and the FTZ Board's regulations, including Section 400.14, and further subject to a restriction requiring that SKAPS Industries admit all foreign-status polypropylene fiber to the zone under privileged foreign status (19 CFR 146.41).

The SKAP facilities are located at 325, 330, and 335 Athena Drive in Athens (Clarke County), Georgia. The facilities are used for the production of non-woven geotextile fabric using polypropylene fiber. FTZ activity would be limited to the specific foreign-status materials and components and specific finished products described in the submitted notification (as described below) and subsequently authorized by the FTZ Board.

Production under FTZ procedures could exempt SKAPS from customs duty payments on the foreign status polypropylene fiber used in export production. On its domestic sales, SKAPS wanted to be able to choose the duty rate during customs entry procedures that applies to geotextile fabric (free) for the foreign status polypropylene fiber (4.3%). However the application was opposed by Agru America and a coalition of U.S. textile industry associations made up of the American Fiber Manufacturers Association (AFMA), the National Council of Textile Organizations (NCTO) and the United States Industrial Fabrics Institute (USIFI). In approving the application, the FTZ Board appears to have taken into consideration the opposition by adding the restriction requiring that SKAPS Industries admit all foreign-status polypropylene fiber to the zone under privileged foreign status, meaning that while SKAPS will be able to import the fiber duty free, they will have to pay the duty when the geotextiles leave the factory and enter the U.S. market. So it is, essentially, a duty-deferral. In addition, the approval is for a limited trial period of five years.