Foreign-Trade Zones Board 2010 – Federal Register Recent Federal Regulation Documents

The Foreign-Trade Zones Board (the Board) proposes to amend its regulations, and invites public comment on these proposed amendments. Through this action, the Board proposes to amend the substantive and procedural rules for the authorization of Foreign-Trade Zones (FTZs or zones) and the regulation of zone activity. The purpose of zones as stated in the Foreign-Trade Zones Act (FTZ Act or the Act) is to ``expedite and encourage foreign commerce, and other purposes.'' The regulations proposed here provide the legal framework for accomplishing this purpose in the context of evolving U.S. economic and trade policy, and economic factors relating to international competition. The changes are comprehensive and the proposed action constitutes a major revision. These revisions encompass changes related to manufacturing and value-added activity, as well as new rules designed to address compliance with the Act's requirement for a grantee to provide uniform treatment for the users of a zone. The new rules should improve flexibility for U.S.-based operations, particularly for most circumstances involving exports; enhance clarity; and strengthen compliance and enforcement. The revisions would also reorganize the regulations in the interest of ease-of-use and transparency.

The Foreign-Trade Zones (FTZ) Board has adopted minor adjustments to its practice pertaining to the alternative site framework (ASF) originally adopted by the Board in December 2008 (74 FR 1170, 01/12/09; correction 74 FR 3987, 01/22/09) as an option for grantees to designate and manage their general-purpose FTZ sites. The adjustments stem from a staff proposal published in August 2010 (75 FR 46916, 8/4/2010). The adopted adjustments take into account comments received on the staff proposal. The comments received on the staff proposal and the FTZ Staff's analysis pertaining to the comments and the proposed adjustments are contained in a staff report available in the ``Reading Room'' section of the FTZ Board's Web site, which can be accessed via https:// www.trade.gov/ftz. The two adjustments proposed by the staff and adopted by the Board are summarized as follows: (1) Eliminate the site-specific allotment of a given grantee's 2,000-acre activation limit (including for FTZs already reorganized or with applications pending for reorganization under the ASF). Replace the site-specific allotment with a procedureonce the Online FTZ Information System (OFIS) currently under development is available and appropriate training has been provided to granteeswhereby the grantees use the OFIS online system to update information on each site's activated space. (2) For ASF applications, allow two general options for documentation pertaining to jurisdictions (ordinarily counties) within the service area: (a) Submitting letters from appropriate county officials acknowledging the proposed inclusion of their counties in the service area of the zone, and presenting their views on the proposal; or, (b) In the absence of letters from appropriate county officials, submission of evidence that appropriate officials of the affected counties were notified of the proposal and were provided information on how they could submit comments to the FTZ Board regarding the proposal. For this option, a grantee should be required to use standard language provided by the FTZ Board staff, thereby ensuring that clear explanation and instructions were given to appropriate officials of the affected counties. In the absence of governments at the county level, the publication of local public notice regarding the application should allow a full range of appropriate local public officials to be informed of the application and to submit comments if they wish to do so. However, if a grantee will be relying on the publication of local public notice due to an absence of governments at the county level, the grantee should explain that situation within the body of the ``application letter'' signed by an authorized grantee official. In response to a comment received, the FTZ Board has also adopted a recommendation to clarify that a site can be designated as Usage-Driven so long at the site falls within the grantee's service area (i.e., meets the standard general-purpose FTZ adjacency requirement), has appropriate zoning (i.e., can accommodate the types of uses ordinarily associated with general-purpose FTZ activity) and is tied to a single operator's or user's use.