Proposed FTZ Regulation Changes
The International Trade Administration (ITA) is considering numerous changes to how U.S. foreign trade zones (FTZ) are regulated in order to "dramatically improve the flexibility and responsiveness of the FTZ program for U.S. exporters," according to a Dec. 30 Federal Register notice.
FTZs are area inside the United States, in or near a U.S. Customs and Border Patrol (CBP) port of entry, where foreign and domestic merchandise is treated as outside of U.S. territory for customs purposes. Products and components can be imported into a FTZ without going through formal customs entry procedures or paying import duties, unless the goods enter U.S. commerce for domestic consumption. There are currently more than 250 FTZs nationwide and companies that utilize FTZs account for $30 billion in exports each year.
While the current regulations divide activity into manufacturing or processing and apply different requirements to each, the proposed regulations would merge activities into one category deemed "production" and apply one set of requirements. The plan also streamlines an existing requirement that free trade zone manufacturers secure advance approval from the FTZ board before launching operations, proposing instead to require such approvals only in limited circumstances, and outlining steps to accelerate such reviews. ITA hopes that these along with other changes will "generally simplify and clarify FTZ requirements…[and] improve access and flexibility for U.S. manufacturing and value-added operations."
The ITA is conducting a series of public forums on the proposed changes in various cities and is accepting comments on the proposed changes until April 8, 2011.
