[Federal Register Volume 81, Number 12 (Wednesday, January 20, 2016)]
[Notices]
[Pages 3100-3101]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01031]


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DEPARTMENT OF COMMERCE

Foreign-Trade Zones Board

[B-1-2016]


Notification of Proposed Production Activity; Klaussner Furniture 
Industries, Inc.; Subzone 230D; (Upholstered Furniture); Asheboro and 
Candor, North Carolina

    Klaussner Furniture Industries, Inc. (KFI), operator of Subzone 
230D,

[[Page 3101]]

submitted a notification of proposed production activity to the FTZ 
Board for its facilities in Asheboro and Candor, North Carolina. The 
notification conforming to the requirements of the regulations of the 
FTZ Board (15 CFR 400.22) was received on January 5, 2016.
    KFI currently has authority to conduct cut-and-sew activity using 
certain foreign micro-denier suede upholstery fabrics to produce 
upholstered furniture and related parts (upholstery cover sets) on a 
restricted basis (see Board Order 1745, 76 FR 11426, March 2, 2011). 
Board Order 1745 authorized the production of upholstered furniture 
(sofas, sleep sofas, and recliners) for a five-year period, with a 
scope of authority that only provides FTZ savings on a limited quantity 
(5.79 million square yards per year) of foreign origin, micro-denier 
suede upholstery fabric finished with a hot caustic soda solution 
process (i.e., authorized fabrics). All foreign upholstery fabrics 
other than micro-denier suede finished with a hot caustic soda solution 
process (i.e., unauthorized fabrics) used in KFI's production within 
Subzone 230D are subject to full customs duties.
    The current request seeks to extend KFI's existing FTZ authority 
indefinitely (with no increase in the company's annual quantitative 
limit of 5.79 million square yards) and to add foreign-status leather 
and certain polyurethane-type fabrics to the scope of authority. KFI 
has also requested that the authority under Board Order 1745 be revised 
by modifying Condition #2 to allow KFI to admit unauthorized fabrics to 
Subzone 230D in privileged foreign status (19 CFR 146.41), which would 
preclude any change in customs classification through transformation 
under FTZ procedures. Pursuant to 15 CFR 400.14(b), additional FTZ 
authority 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 KFI from customs duty 
payments on the foreign-status fabrics used in export production. On 
its domestic sales, KFI would be able to apply the finished upholstery 
cover set (i.e., furniture part) or finished furniture duty rate (free) 
for the authorized fabrics and the additional fabrics (indicated 
below). Customs duties also could possibly be deferred or reduced on 
foreign-status production equipment.
    Authority to admit imported fabrics to Subzone 230D in non-
privileged foreign status (19 CFR 146.42)--under which the fabrics' 
customs classification could change through transformation under FTZ 
procedures--would only involve micro-denier suede upholstery fabrics 
finished with a hot caustic soda solution process (classified within 
HTSUS Headings 5407, 5512, 5515, 5516, 5801, 5903, 6001, 6005, and 
6006), polyurethane fabrics backed with ground leather (5903.20.2500), 
upholstery leather (Heading 4107), and wet coagulation process, 100 
percent polyurethane coated fabrics (5903.20.2500), as detailed in the 
notification (duty rate ranges from free to 17.2%).
    Public comment is invited from interested parties. Submissions 
shall be addressed to the FTZ Board's Executive Secretary at the 
address below. The closing period for their receipt is February 29, 
2016.
    A copy of the notification will be available for public inspection 
at the Office of the Executive Secretary, Foreign-Trade Zones Board, 
Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW, 
Washington, DC 20230-0002, and in the ``Reading Room'' section of the 
FTZ Board's Web site, which is accessible via www.trade.gov/ftz.
    For further information, contact Pierre Duy at [email protected] 
or (202) 482-1378.

    Dated: January 13, 2016.
Andrew McGilvray,
Executive Secretary.
[FR Doc. 2016-01031 Filed 1-19-16; 8:45 am]
 BILLING CODE 3510-DS-P