Wednesday, October 14, 2015

FTZ Board Grants Extension of Comment Period for Textile Flotation Devise Application

On October 14, 2015, the Foreign Trade Zone Board published in the Federal Register (80 FR 61792) Application for Additional Production Authority; The Coleman Company, Inc.; Subzone 119I; (Textile-Based Personal Flotation Devices) Extension of Comment Period.

The comment period for the application for additional production authority submitted by The Coleman Company, Inc., for activity within Subzone 119I in Sauk Rapids, Minnesota (80 FR 49986, 8-18-2015), is being extended to November 19, 2015, to allow interested parties additional time in which to comment. Rebuttal comments may be submitted during the subsequent 15-day period, until December 4, 2015. Submissions shall be addressed to the FTZ Board's Executive Secretary at: Foreign-Trade Zones Board, U.S. Department of Commerce, Room 21013, 1401 Constitution Avenue NW., Washington, DC 20230-0002.

The applicant has submitted a request to the FTZ Board for a public hearing to be held on its application. The scheduling of the hearing is currently under consideration, and the related details will be announced with a 30-day advance notice at a future date.


On August 18, 2015, the Foreign Trade Zone Board published in the Federal Register (80 FR 49986) Application for Additional Production Authority; The Coleman Company, Inc.; Subzone 119I; (Textile-Based Personal Flotation Devices) Sauk Rapids, Minnesota.

An application has been submitted to the Foreign-Trade Zones ("FTZ") Board by The Coleman Company, Inc. The Coleman facility (252 employees) is located at 1100 Stearns Drive, Sauk Rapids, Minnesota. The facility is used for the production of personal flotation devices and cushions constructed with textile fabrics. In May 2014 Coleman requested FTZ production authority in a notification proceeding). A notification proceeding is a streamlined application well-suited to applications that can be expected to have no domestic manufacturer opposition. It is unclear why Coleman, at that time, chose to use procedures that were unlikely to result in approval. The 2014 application was opposed by Milliken and Company and a coalition of three textile trade associations (AFMA, NCTO, and USIFI). The 2014 application was supported by U.S. Representative Michele Bachmann, Continental Press, Duro Textiles, LLC, Henderson Sewing Machine Company, M-Associates, Mitsubishi Electric Automation, Outdoor Industry Association, U.S. Representative Ed Perlmutter, U.S. Representative Mike Pompeo, Pregis Corporation, SPSI Inc., and T.J. Elias Sales and Service. After an initial review, the requested production authority was approved subject to a restriction that precludes inverted tariff benefits on foreign textile fabrics and cases/bags of textile materials used in production of personal flotation devices and cushions for U.S. consumption. In other words, Coleman got tariff relief comparable to duty drawback and exports and, in the case of goods entering the U.S. market, a deferral of duty during manufacturing a warehousing (with full duty payable when the articles enter U.S. commerce.

This new 2015 pending application seeks to remove the above-mentioned restriction and to add several new components to Coleman's scope of authority by requesting authority for Coleman to choose the duty rate during customs entry procedures that applies to personal flotation devices (4.5%, 7.0%) and flotation cushions (6.0%) for the foreign status inputs noted below. This application was submitted under different procedures than the 2014 application, procedures which require Coleman to make a much fuller and stronger case than under the streamlined procedures. The request indicates that the savings from FTZ procedures would help improve the plant's international competitiveness.

Components and materials sourced from abroad (representing 16% of the value of the finished products) include: Water soluble sensing elements; plastic carry bags; nylon and polyester woven fabrics; webbing of man-made fibers; neoprene fabrics; and, knit polyester fleece fabrics (duty rate ranges from 5 to 20%).

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