The SKAPS facilities (185 employees) are located within Site 29 of FTZ 26. The facilities are used for the production of non-woven geotextile fabric using polypropylene staple fiber. SKAPS requested FTZ production authority in a notification proceeding (15 CFR 400.22) in 2013 (see, 78 FR 54234, 9-3-2013; Doc. B-37-2013). After an initial review, the requested production authority was limited to a five-year initial term, as well as a restriction that precludes inverted tariff benefits on foreign polypropylene staple fiber used in production of non-woven geotextile fabrics for U.S. consumption. For an explanation of the significance of the restriction see the Agathon Associates September, 3, 2013 blog posting.
The pending application seeks to remove the above-mentioned restriction by requesting authority for SKAPS to choose the duty rate during customs entry procedures that applies to non-woven geotextile fabrics (duty rate--free) for the polypropylene staple fiber (duty rate--4.3%) sourced from abroad. The request indicates that the savings related to inverted tariff benefits on polypropylene staple fiber used in production for the U.S. market would further improve the facilities' international competitiveness.