Wednesday, October 19, 2016

Agathon Associates Files FTZ Application for Claremont Flock

On October 19, 2016, the FTZ Board published in the Federal Register (81 FR 72038) Foreign-Trade Zone (FTZ) 27—Boston, Massachusetts; Notification of Proposed Production Activity; Claremont Flock, a Division of Spectro Coating Corporation (Textile Flock); Leominster, Massachusetts.

Claremont Flock, a Division of Spectro Coating Corporation (Claremont Flock), submitted a notification of proposed production activity to the FTZ Board for its facility in Leominster, Massachusetts within Subzone 27N. The notification conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.22) was received on October 13, 2016.

Claremont Flock already has authority to produce textile flock using acrylic and rayon tow within Subzone 27N. The current request would add polyester tow as a material/component to the scope of authority. Pursuant to 15 CFR 400.14(b), additional FTZ authority would be limited to the specific foreign-status material/component described in the submitted notification (as described below) and subsequently authorized by the FTZ Board.

Production under FTZ procedures could exempt Claremont Flock from customs duty payments on polyester tow used in export production. On its domestic sales, Claremont Flock would be able to choose the duty rate during customs entry procedures that applies to textile flock (duty-free) for polyester tow (duty rate 7.5%). Customs duties also could possibly be deferred or reduced on foreign-status production equipment.

Public comment is invited from interested parties. The closing period for their receipt is November 28, 2016.

The application was filed on behalf of Claremont by Agathon Associates.

NOTE, that we are fully aware that there is domestic production of polyester fiber, including tow. Claremont does not make any broad claim that polyester fiber is not available from domestic sources. Claremont's Application relates solely to a narrow claim that certain polyester tow for use in producing textile flock is not available domestically. Other than Palmetto, which, exited this market in January of this year, U.S. producers of polyester tow have not sold it to the flock cutting industry for some years, rather it is used in the production of staple fiber for use by the yarn spinning industry. Approval of this Application would not, and ought not, be viewed as a precedent opening the way for FTZ procedures to be used in the case of other polyester fibers.

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