Foreign-Trade Zones List . Foreign-Trade Zones Board

November 6, 2006

Memorandum To: Foreign-Trade Zone Grantees

From: Pierre V. Duy
Acting Executive Secretary

Subjects: FTZ Annual Report - FY 2006 • Changes to Temporary/Interim Manufacturing Authority
• Improved Application Processing • CBP- e214 Availability

As many of you may know, Dennis Puccinelli – who had served as Executive Secretary of the FTZ Board since 1997 – retired in May of this year. There are currently two individuals (myself and Andrew McGilvray) who have been serving rotating periods as Acting Executive Secretary; you can consult our Web site – www.trade.gov/ftz – for more information on this topic.

1. Annual Report - FY 2006
This is the time of year when annual reports from each zone grantee are due to the FTZ Board. While the deadline for the FY 2006 report is customarily at the end of January (1/31/2007), please help us improve the timeliness of our publication by submitting yours as early as possible. We ask for your support and attention to this requirement so that we can meet our goals for timely review, publication and distribution of our report to Congress and to zone grantees. The report format is available on our Web site along with new and revised application forms and related guidelines, and other information.

If you wish to obtain a copy of the annual report format from our Web site, we suggest you download the MS Word version. (It was written in Times New Roman font - 12 point). For continuity in reporting and to assist new personnel, please forward pertinent sections of the report format to each of your subzones and operators. Grantees should provide subzones and operators sufficient preparation time (i.e., 60 days) to ensure complete and accurate information. If a paper copy of the format is needed, phone Yvette Morgan at (202) 482-2862, or e-mail her at Yvette_Morgan@ita.doc.gov. [Be sure to include names and contact information (fax, phone numbers; email addresses) of your subzone administrators.] Requests for extensions on annual report submissions (usually 30-60 days) are considered, based on special circumstances. Such requests can be made by fax (202-482-0002) or e-mail (Pierre_Duy@ita.doc.gov or Claudia_Hausler@ita.doc.gov).

From a data perspective, we have recurring instances where no domestic merchandise is reported by subzones that do, in fact, inventory domestic goods within activated FTZ space. Please strive to ensure that your subzone operators include in Section B.2 (Merchandise Received) all domestic merchandise handled within activated FTZ areas. In most instances, domestic merchandise is not being tracked within FTZ automated control systems, which is acceptable. If this relates to any of your subzone operators, the value of domestic merchandise may be estimated or derived from existing data available from the operator’s inventory management system. Please review the “Notes for Preparing FTZ Annual Report Data” on how to derive domestic merchandise figures. Note that domestic merchandise can be excluded if it is completely unrelated to the ongoing FTZ activity.

We want to express our gratitude to all those grantees who consistently submit their reports by January 31st. Thank you for working conscientiously with Claudia in responding to her inquiries about your data. Please endeavor to continue this collaboration. Accurate and timely annual report data is vital in order to successfully portray the positive impact the FTZ program has on the U.S. economy. Please contact Claudia or me if you have any questions on the annual report process.

For oil refinery subzones, an oil refinery annual report format/guideline is available which replaces the standard Part V of the annual report format for subzones. This guideline assists oil refinery subzone operators in preparing the report and improves the overall quality of the information received. It was developed in consultation with representatives of oil refinery subzones. You can access the oil refinery format/guideline on our Web page at http://ia.ita.doc.gov/ftzpage/oil.html. [Please contact Diane Finver or Liz Whiteman for assistance on refinery annual reports.]

For FTZ’s that are not currently active, grantees are required to submit a status report in the form of a letter that includes updated contact information for key FTZ personnel, a brief highlight on marketing efforts and comments on the impediments to activation. Include your revised projected time frame for activation. Take note that general-purpose zones and subzones are subject to automatic termination after five years under our regulations’ lapse provision if no activation has occurred (see, Lapse Guidelines at http://ia.ita.doc.gov/ftzpage/ftznew/lapse.html). Grantees should track subzones regarding their activation schedules and advise us of any that become affected by the lapse provision. We also ask that you list subzones that have lapsed in your annual report.

2. Changes to Temporary/Interim Manufacturing Procedures
Temporary/Interim Manufacturing (T/IM) authority was established in 2004 to provide rapid access to the FTZ manufacturing authority under certain circumstances. The Executive Secretary is authorized to approve requests on an expedited basis for manufacturing authority within existing FTZ space for a period of up to two years for non-controversial activity that is similar to recent approvals. In September 2006, the FTZ Board liberalized T/IM eligibility requirements. Visit our web site or call us for details on how these changes can benefit your zone project and local businesses.

3. Improved Application Processing
In September 2006, along with improvements to the T/IM procedure, David Spooner, Assistant Secretary of Commerce for Import Administration, announced a commitment to accelerate FTZ Board action on manufacturing-related applications, with a goal of completing reviews in six to eight months (instead of up to a year). However, we can only be successful in expediting those reviews if we receive solid applications that follow our simplified guidelines or forms for subzone applications or FTZ manufacturing authority. We also encourage all applicants to submit draft applications to us, which we can generally give feedback on within one week. To save time for applicants, a draft can be submitted when the major portions of the application are completed but some minor details are still being ironed out. Submitting a draft helps ensure that we can docket the application quickly after receiving it (rather than needing to first request clarification or additional information at that point).

4. e214 Now Available to FTZ users
As you may know, Customs and Border Protection (CBP) has now gone live with its automated FTZ admissions process, known as e214, through the ACS system. To take advantage of e214, importers only need Automated Broker Interface connectivity and e214-specific software. Some 37 ports are now accepting the e214 in lieu of the traditional paper forms. CBP is encouraging all members of the trade community to file admissions electronically. Please let your operators and subzone administrators know about this new initiative that will yield significant operational benefits for them. To find out more, contact your local CBP port office or check online at http://www.customs.gov/xp/cgov/import/cargo_control/ftz/.