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New FTZ Manufacturing Authority Sought for IV Bag Facilities in Puerto Rico

Tuesday, December 13, 2011
Sandler, Travis & Rosenberg Trade Report

The Foreign-Trade Zones Board has received an application from the Puerto Rico Industrial Development Company, grantee of FTZ 7, requesting temporary/interim manufacturing authority at two sites within FTZ 7 at the Baxter Healthcare of Puerto Rico facilities in Aibonito and Jayuya. These facilities are used for the manufacture of pharmaceutical and nutritional intravenous bags and related components. Under T/IM procedures, Baxter has requested authority to produce filled pharmaceutical and nutritional IV bags and IV administration sets and their components.

FTZ procedures could exempt Baxter from customs duty payments on the foreign components used in export production, and the company anticipates that some 22% of the facilities’ shipments of IV administration sets and components will be exported. On its domestic sales, Baxter would be able to choose the duty rate that applies to filled IV products and administration sets (zero) for foreign inputs. Baxter could also be exempt from duty payments on foreign materials that become scrap or waste during the production process.

Comments on this application are due no later than Jan. 12, 2012.

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