U.S. Foreign-Trade Zone Opportunities · but are physically located in the United States. Companies...

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U.S. Foreign-Trade ZoneOpportunities

SCOTT S. TAYLOR, ESQ.MILLER AND COMPANY P.C.

Jacksonville, FloridaAugust 23, 2011

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U.S. FOREIGN-TRADE ZONESLogical extension of historic/global free zones1934 “New Deal” Legislation – Jobs/Investments

Unique Legal StructureForeign-Trade Zone Act 19 U.S.C. § 81(a) – 81(u)Foreign-Trade Zones Board Regulations 15 C.F.R. § 400Customs Regulations 19 C.F.R. § 146FTZ BoardChanges - Customs Laws – “Public Interest Criteria”

Maintains/creates jobs and investment in the U.S. as opposed to in a foreign country by Customs/tax financial savingsNot a Customs programFTZs are within U.S. boundaries, uniquely not within the Customs territory

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WHO IS ELIGIBLE?Foreign-trade zones stimulate American economic growth and development because they encourage companies to continue and to expand their operations in the United States. Foreign-trade zones are located in all 50 states and Puerto Rico. A company must have a facility in the United States that imports either parts, materials or components for manufacturing and finished goods or parts for distributions. The finished good is then exported or sold in the United States market.

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WHAT IS A FOREIGN-TRADE ZONE?

Foreign-trade zones are restricted-access sites that are considered outside the U.S. Customs territory, but are physically located in the United States.

Companies that operate in foreign-trade zones can defer, reduce, or eliminate Customs duties on foreign products admitted into zones for storage, exhibition, assembly, manufacture, and processing.

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WITHOUT A ZONE

Product is importedCustoms Entry is madeHTSUS Classification and duty rate are declaredCustoms duty is paidThis is based on Harmonized Tariff Schedule of the United States (HTSUS)

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WHO BENEFITS?

Companies that Import and Export Merchandise

Warehouse Operators

Manufacturers

Third Party Logistics Providers

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FTZ BOARD

Secretary of Commerce — Mr. John Bryson (Chairman) (Nominated)

Secretary of Treasury — Mr. Timothy Geithner

Executive Secretary — Mr. Andrew McGilvray

Department of Homeland Security Liaison — Ms. Janet Napolitano (Secretary)

Customs and Border Protection Role (Supervisors) —Mr. Alan Bersin

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U.S. Foreign-Trade Zones Program

U .S . F o re ig n -T ra d e Z o n e s B o a rd

L o c a l C u s to m s P o r t D ire c to rL o c a l G ra n te e

G ra n te e /O p e r a to rA g re e m e n t(s )

Z o n e O p e ra to r(S in g le o r M u lt ip le )

Z o n eO p e r a to r

Z o n e O p e ra to r

Z o n e U s e r

Z o n e U s e r

Z o n e U s e r

S e c re ta ry o fC o m m e rc e

S e c re ta ry o f T re a s u ry

F T Z B o a rd S ta f f

S u b z o n eO p e ra to r

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RAPID DEVELOPMENT

*Data as of August 16, 2011**FY 2009 (latest) FTZ Board statistics published in November 2010

197010 General-Purpose Zones3 Subzones1,401 jobs$104 million (received)11% domestic material

2011277 General-Purpose Zones*677 Subzones*330,000 jobs**$430.6 billion (received)**58% domestic material**

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REASON FOR RAPID DEVELOPMENT

Globalization

Customs Duty Planning-Financial Savings

1950 - Manufacturing Statutory Amendment, Public Law 566, 81st Congress (approved June 17, 1950)

1952 – Foreign-Trade Subzones, Board Order No. 29 (17 Fed. Reg. 53160 - June 5, 1952)

1980 - Manufacturing Valuation Section 146.48(e), Customs Regulations

State/Port Authority/Local Development Agency Involvement

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FLORIDA ZONES AND SUBZONES

21 General-Purpose Zones

85 General-Purpose Zone Sites

18 Subzones

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FTZ No. 25 Port Everglades (Broward County)25A Federal-Mogul World Trade, Inc. (Ft.

Lauderdale) (terminated) (vehicle components)25B CITGO Petroleum Corporation (petroleum products)25C TransMontaigne Product Services, Inc.

(formerly Coastal Fuels Marketing, Inc.) (petroleum products)

25D Motiva Enterprises LLC (petroleum products)25E Chevron Products Company (petroleum products)

FTZ No. 32 Miami32A Hewlett-Packard Company (electronics)32B Komatsu Latin-America Corporation (mining equipment)

FTZ No. 42 Orlando42A Mitsubishi Power Systems, Inc. (power generation turbine

components)

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FTZ No. 64 Jacksonville64A Atlantic Marine, Inc. (shipbuilding) (lapsed)

FTZ No. 65 Panama City65A Eastern Shipbuilding Group, Inc. (shipbuilding)

FTZ No. 79 Tampa79A Reilly Dairy & Food Company (dairy)79B Sypris Electronics (formerly Group Technologies Corporation)

(electronic equipment)

FTZ No. 135 Palm Beach County (West Palm Beach)

FTZ No. 136 Brevard County (Port Canaveral)136A Flite Technology, Inc. (Cocoa) (deactivated) (machinery)136B American Digital Switching, Inc. (Melbourne) (lapsed)

(telecommunications)136C Harris Corporation-Electronic Systems Sector

(telecommunication)

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FTZ No. 166 Homestead

FTZ No. 169 Manatee County (Palmetto)169A Aso Corporation (Sarasota County) (adhesive bandages)

FTZ No. 180 Miami (Wynwood County)

FTZ No. 193 Pinellas County (St. Petersburg-Clearwater)193A Catalent Pharma Soluctions, LLC (formerly

Cardinal Health PTS, LLC) (pharmaceuticals)

FTZ No. 198 Volusia & Flagler Counties (Daytona Beach area)

FTZ No. 209 Palm Beach County (transferred)

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FTZ No. 213 Fort Myers

FTZ No. 215 Sebring

FTZ No. 217 Ocala

FTZ No. 218 St. Lucie County

FTZ No. 241 Fort Lauderdale

FTZ No. 249 Pensacola/Escambia County

249A General Electric Wind Energy and Energy Rentals (wind turbine)

FTZ No. 250 Seminole County

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JACKSONVILLE, FLORIDA FOREIGN-TRADE ZONE NO. 64FTZ No. 64 — Jacksonville, Florida

Grantee: Jacksonville Port Authority

Approved 1980

Received $968.8 million foreign merchandise in FY 2009.

Site 1 – 67 acres within the Jacksonville International AirportSite 3 – 809 acres at Jacksonville Port Authority Blount Island Terminal Complex Site 4 – 200 acres within the International Tradeport Complex on Airport RoadSite 7 – 47 acres located at the Westlake Industrial park at 9767 Pritchard RoadSite 8 – 75 acres located at One Imeson Park Boulevard within the ImesonInternational Industrial Park.Site 9 – 135 acres located at 2085 Talleyrand Avenue.Site 10 – 4,474 acres located at I-10 at Cecil Commerce Center Parkway

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FTZ INDUSTRY USE

OIL REFINING – CITGO, ConocoPhillips, Chevron, Exxon Mobil, Lion Oil Company, Motiva Enterprises, Shell Oil, Sunoco, Tesoro Refining & Marketing Company, U.S. Department of Energy Strategic Petroleum Reserve, and Valero – 94 approved.

2009 Dollar Volume - $126 Billion

MOTOR VEHICLES – BMW, Chrysler, Ford, GM, Honda, Hyundai, Kawasaki, Kia, Mercedes, Volkswagen, Nissan – 124 approved.

2009 Dollar Volume - $14 Billion

ELECTRONICS – AZ Electronics, Canon, Dell, HP, Intel, Lucent, Ricoh, and Sony – 74 approved.

2009 Dollar Volume - $12.9 Billion

PHARMACEUTICAL INDUSTRY –Abbott Laboratories, AstraZeneca, Baxter Health Care, BMS, Eli Lilly, GlaxoSmithKline, IPR Pharmaceuticals, Merck, Pfizer, Sanofi and others –85 approved.


CONSUMER GOODS – Conair, GE Appliance, Eastman Kodak, Movado Group, Pier 1 Imports, Fuji Photo Film – 56 approved.


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SENSITIVE INDUSTRIES

Industry ConcernsSteelTextilesSugarPrinter’s ink

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PRIMARY FINANCIAL SAVINGSInverted Duty – 6.8% 0%, 5% 2.5% Cash FlowExportsStaged Duty ReductionsDirect DeliveryU.S. Labor/Overhead/ProfitScrap/Waste/Obsolete MaterialWeekly Entry

Merchandise Processing Fee SavingsCustoms Brokerage Expense SavingsPaperwork Reduction

Tax Savings“Bona Fide” Customs Reason

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Easiest Way to Increase Existing FTZ Use

Identify and Include All Direct Foreign Sourced MaterialIdentify and Include Domestic Purchased Merchandise that is Really Foreign-Sourced MerchandisePackagingScrap/Waste/ObsoleteKitting

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Kitting

Liquor/Glasses/ CradleCosmeticsCell PhonesComputersHome Theatre KitsTool KitsNapkins/Rings

Pen SetAudio Rack SystemSurgical PackClothing SetDinnerware SetGlassware Set

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Everybody Does It

Oil RefineriesMotor Vehicles/PartsEngine ProductionPharmaceutical/ Medical Equipment ProductionChemical Production

Shipyards/ Offshore Drilling Rig ProductionInformation TechnologyToner CartridgesFootwearLME Warehouses

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Future Users/Uses

Expand Current FTZ OperationsAD/CVD MerchandiseHigh Duty Rate Merchandise –Compound/ Chapter 99/ General

All U.S. Distribution WarehousesSpare Parts WarehousesReturns/Repair Operations

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HYPOTHETICAL FOREIGN-TRADE ZONE SAVINGS ANALYSIS

Annual Imports of Foreign Parts/Materials $100,000,000 $100,000,000

Average On-Hand Imported Merchandise Inventory $25,000,000 $25,000,000

DIRECT COST SAVINGS

Inverted Duty

Value of Foreign Parts/Materials Used in Production $100,000,000 $0

x Average Foreign Parts/Material Customs Duty Rate 6.00% 0.00%

= DUTY EXPENSE $6,000,000 $6,000,000

LESS

Value of Foreign Parts/Materials Used in Production $100,000,000 $0

x Finished Product Customs Duty Rate 4.90% 0.00%

= DUTY EXPENSE $4,900,000 $4,900,000

= FTZ INVERTED DUTY SAVINGS $1,100,000 $1,100,000

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Cash Flow

Average On-Hand Imported Merchandise Inventory $25,000,000 $0

x Average (or Individual) Parts/Material Customs Duty Rate 6.00% $1,500,000

x Interest Rate 6.00% 0.00%

= FTZ CASH FLOW SAVINGS $90,000 $0

FTZ BORROWINGS REDUCTION SAVINGS $1,500,000

Exports = 20% of Annual Merchandise Imports of Foreign Components $20,000,000 $0

x Finished Product Customs Duty Rate 4.90% $980,000

= FTZ EXPORT SAVINGS $980,000 $980,000

Direct Delivery

Annual Inventory $100,000,000

One Day Transit Time Savings Equal One Days Less Inventory to Support Same Business ÷ 365 $273,973

= SAVINGS $273,973 $273,973

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Foreign vs. U.S. Production

Value of Foreign Finished Products Imported $200,000,000 $0

x Finished Product Customs Duty Rate 4.90% $9,800,000

= DUTY EXPENSE $9,800,000 $9,800,000

LESS

Value of Foreign Parts/Materials Used in U.S. FTZ Production $100,000,000 $0

x Finished Product Customs Duty Rate (50%) 4.90% $4,900,000

= DUTY EXPENSE $4,900,000 $4,900,000

= FTZ U.S. PRODUCTION SAVINGS $4,900,000 $4,900,000

Scrap/Waste/Obsolete/Surplus = 3% of Annual Merchandise Imports of Foreign 3.00% $3,000,000

Components

x Average Foreign Parts/Material Customs Duty Rate 6.00% $180,000

= FTZ SAVINGS $180,000 $180,000

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Merchandise Processing Fee = Value of Imported Merchandise(Daily Entry)

(Weekly Entry)

(Per CBPF 7501 Customs Entry)

x .21% Ad Valorem (Assumes the $485.00 Maximum) $485 $485

x Number of Customs Entries Filed Annually 1,500 50

= EXPENSE $727,500 $24,250

= FTZ MPF SAVINGS $703,250

Customs Broker Entry Fee $100 $100 $100

x Number of Customs Entries Filed Annually 1,500 50 0

= EXPENSE 150,000 $5,000

= FTZ BROKERAGE FEE SAVINGS $145,000

State and Local Ad Valorem Taxation = Average On-Hand Imported Merchandise $25,000,000

x Tax Rate 1.00% $250,000

= FTZ TAX SAVINGS $250,000 $250,000

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FTZ SAVINGS RECAP

Inverted Duty $1,100,000

Cash Flow/Borrowings Reduction $1,500,000

Exports $980,000

Direct Delivery $273,973

Foreign vs. U.S. Production $4,900,000

Scrap/Waste/Obsolete/Surplus $180,000

Merchandise Processing Fee (Weekly Entry) $703,250

Customs Broker Entry Fee (Weekly Entry) $145,000

State and Local Ad Valorem Taxation $250,000

TOTAL FTZ SAVINGS $10,032,223

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FTZ ADVANTAGESCash FlowExportsWaste/Scrap/Defects/Damage/ObsolescenceInverted U.S. Customs Duty SavingsNondutiability of Labor, Overhead, and ProfitReduced Cycle TimeWeekly EntriesHarbor Maintenance FeeTaxationProduction MachineryInternational ReturnsCountry-of-Origin Marking/LabelingSecurityAntidumping/Countervailing duties

Spare PartsU.S. QuotaQuality Control Inventory ControlEntireties ProvisionExhibitionInsurance CostsZone-to-Zone TransferTemporary Removal ProcedureCompliance with Federal LawsEnterprise Zone CoordinationTransfer of TitleRecord Identity AccountingNo Time LimitChanging CircumstancesDirect Delivery

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Alternative Site Framework

SCOTT S. TAYLOR, ESQ.MILLER AND COMPANY P.C.

Jacksonville, FloridaAugust 23, 2011

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Key PointsGoal for Alternative Site Framework (ASF): Improve grantees’ ability to bring competitiveness benefits of FTZs to broad range of companies.

FTZ Staff consulted with grantees and others to develop zone-site management option that is flexible (for users), focused (for oversight purposes), and predictable (for everyone’s benefit).

A zone’s approval for a new ASF “plan” involves a public process to enable future site designations (via simplified FTZ Staff minor boundary modification process) across a broad geographic area served by the zone.

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Key PointsASF framework modifies current practice only where necessary for flexibility, focus, and predictability.

As under traditional framework, FTZ space can only be designated or modified through FTZ Board or FTZ staff action (with concurrence of CBP Port Director).

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Terms and Concepts“Service Area” is the geographic area where grantee intends to propose general-purpose FTZ sites.

Baker, Clay, Columbia, Duval, and Nassau Counties

St. Johns, Putnam, and Bradford Counties (pending FTZ Board Approval)

The reason to define Service Area up front is to eliminate need for full FTZ Board processes (Federal Register notices, public comment periods, etc.) when new potential zone users appear and need FTZ designation quickly.

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Example of Magnet Site

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“Magnet” Site

A “Magnet” site is one selected by grantee based on ability to attract multiple potential FTZ operators/users.

Designated only via FTZ Board (Customs ITA/Treasury review) action.

Similar to traditional FTZ site (industrial park, port facility, etc.) designated in advance –essentially speculatively – to attempt to draw FTZ operators/users.

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“Usage-Driven” Site

A “Usage-Driven” site is designated for a company ready to purse conducting FTZ activity.

Can be designated via simplified boundary modification.

Designation tied to the specific company and limited to the space needed by the company.

Under ASF, site is general-purpose if adjacent space has potential for future FTZ use.

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Example of a Usage-Driven Site

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Sunset ProvisionOngoing “Sunset” test remove unused sites.

Standard five-year sunset period for Magnet sites (applicant can request longer on case-specific basis).

Activation

Three-year sunset period for all Usage-Driven sites.Activity required – (Zone Admission)

Activation/activity during any period serves to reset the sunset deadline by an additional five years (Magnet) or three years (Usage-Driven).

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INFORMATION REQUIRED FOR USAGE-DRIVEN APPLICATION

Address. Please provide the address of the facility.

Acreage. Please provide the total number of acres of the facility, including any outside land that should be included for potential outside storage in a fenced area.

Activity Description. Please provide a descriptive summary of activities that will occur at the site, including warehousing, packaging, testing, repairs, kitting, manufacturing, and distribution operations and the type of products.

Type of Land. Is the company located in an industrial park? Yes or No. If yes, please provide the name of the industrial park.

Zoning. Please provide the name of the local property zoning designation.

Security Features. Please provide a description of the security features at the facility. This is a general description that can be provided in a paragraph including items such as fencing, card access readers, locks, alarm system, security cameras, and patrols.

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INFORMATION REQUIRED FOR USAGE-DRIVEN APPLICATION

Property Owner. Please provide the name of the property owner. Please provide a property owner concurrence letter. (Draft attached)

Legal Description. Please provide a metes and bounds legal description of the property. The address of the government office where the legal description can be verified should be provided on the legal description document.

Site Plan. Please provide a site plan of the boundaries of the property that will be designated as a foreign-trade zone. This boundary should be highlighted in a red outline, as required by the Foreign-Trade Zones Board. This site plan should also include sufficient detail to show surrounding street names that are clearly marked. There should also be a north-south-east-west arrow located on the map for reference. Any other reference points are important. The site plan does not have to include any level of detail within the building. The building outline is sufficient for this particular application. The red outlined area should include an acreage total that matches the acreage total provided in question No. 2. It should also match the legal description provided in question No. 8. If the area is different, please explain the difference.

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BASIC REQUIREMENTS OF MANUFACTURING APPLICATION

Application Data RequirementsCompany backgroundProduct descriptionIndustry backgroundZone benefits to companyPublic benefitsImpact on domestic industryUse of public zone

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FTZ APPLICATIONS, SCOPE ISSUES AND EXPANSIONS

Scope of Authority and ExpansionsExisting Subzones

Review approved:Number of buildingsSquare feetAcresHTSUS Scope of Authority

Compare with any possible expansions

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Opportunities & Benefits of ASF Intended & Unintended

For Companies

Warehousing/Distribution in 30 daysManufacturing under T/IM in 75 daysNo filing fee Possible production equipment benefitLower cost entry for companies

Free or $1600 vs. $6500 for Subzone

Costs of Application preparation

Simplifies information gathering process

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Alternative Site Framework ApplicationsFiled at the Foreign-Trade Zones Board

ZONE NO. GRANTEE SERVICE AREA DOCKET/ BOARD ORDER/APPROVED

FTZ 234 Gregg County, Texas Gregg County, Texas Docket 27-2009Board Order No. 1659Approved: 1/15/2010

FTZ 260 City of Lubbock, Texas Counties of Garza, Hale, Hockley, Lubbock and Terry Counties, Texas

Docket 28-2009Board Order No. 1668Approved: 2/23/2010

FTZ 39 Dallas/Fort Worth International Airport Board

Dallas, Tarrant, Kaufman, Collin, Grayson, and Denton Counties, Texas


FTZ 54 Clinton County, New York Clinton County, New York Docket 31-2009Board Order No. 1697Approved: 07/08/2010

FTZ 274 City and County of Butte-Silver Bow

Silver Bow County, Montana Docket 33-2009Board Order No. 1661Approved: 2/5/2010

FTZ 174 Tucson Regional Economic Opportunities, Inc.

Pima County, Arizona Docket 43-2009Board Order No. 1685Approved: 6/4/2010

FTZ 17 Greater Kansas City Foreign-Trade Zone, Inc.

Wyandotte, Johnson, Douglas, Shawnee, Leavenworth, and Miami Counties, Kansas


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FTZ 121 Capital District Regional Planning Commission

Albany, Columbia, Greene, Fulton, Montgomery, Rensselaer, Saratoga, Schenectady, Warren and Washington counties, New York


FTZ 37 County of Orange, New York Orange County, New York Docket 51-2009Board Order No. 1680Approved: 05/13/10

FTZ 2 Board of Commissioners of the Port of New Orleans

Orleans, Jefferson and St. Bernard Parishes, Louisiana


FTZ 176 Greater Rockford Airport Authority

Winnebago, Stephenson, Ogle, Lee, DeKalb, and Boone Counties, and portions of Bureau, McHenry and Kane Counties, Illinois


FTZ 113 Ellis County Trade Zone Corporation

Ellis County, Texas Docket 4-2010Board Order No. 1708Approved: 09/24/10

FTZ 170 Ports of Indiana Jackson, Washington, Harrison, Floyd, Clark and Scott Counties, Indiana

Expanded to Include: Jefferson, Ripley, Dearborn, Brown, Ohio, and Switzerland Counties


Docket 37-2011*

FTZ 196 Alliance Corridor, Inc. Denton and Tarrant Counties, Texas


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FTZ 26 Georgia Foreign-Trade Zone, Inc.

Haralson, Paulding, Polk, Bartow, Floyd, Chattooga, Gordon, Pickens, Gilmer, Fannin, Murray, Whitfield, Catoosa, Walker, Dade, Forsyth, Dawson, Hall, Lumpkin, Union, White, Habersham, Banks, Franklin (in part), Cherokee, Gwinnett, Fulton, Clayton, Fayette, Henry, Cobb, Douglas, DeKalb, Rockdale, Spalding, Troup, Coweta, Carroll, Heard, Meriwether, Pike, Lamar, Butts, Upson, Newton, Jasper, Morgan, Walton, Barrow, Oconee, Clarke, Greene, Oglethorpe, Madison, Jackson, Monroe, Bibb, Putnam, Jones, Baldwin, Crawford, Peach, Wilkinson (in part), Twiggs (in part), Houston (in part), Muscogee, Harris, Talbot, Taylor, Marion (in part) and Richmond Counties, Georgia


FTZ 75 City of Phoenix

Maricopa County and portions of Pinal and Yavapai Counties, Arizona


FTZ 144 Brunswick and Glynn County Development Authority

Appling, Atkinson, Brantley, Camden, Charlton, Coffee, Glynn, Jeff Davis, McIntosh, Ware and Wayne Counties, Georgia


FTZ 126 Economic Development Authority of Western Nevada

Carson City, Douglas and Storey Counties as well as portions of Churchill, Lyon and Washoe Counties, Nevada


FTZ 177 Ports of Indiana

Vanderburgh, Dubois, Pike, Gibson, Knox, Daviess, Spencer, Warrick and Posey Counties, Indiana

Expanded to Include: Sullivan, Perry, Crawford, Orange, and Martin Counties



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FTZ 125 St. Joseph County Airport Authority

St. Joseph, Elkhart, Kosciusko, Marshall, La Porte and Starke Counties, Indiana


FTZ 5 Port of Seattle King and Snohomish Counties, Washington


FTZ 152 Ports of Indiana Lake, Porter, La Porte, Newton, Jasper and Starke Counties, Indiana

Expanded to Include: Pulaski and Fulton Counties



FTZ 22 Illinois International Port District Cook, Du Page, Grundy, Kankakee, Kendall, Lake and Will Counties and portions of McHenry and Kane Counties, Illinois


FTZ 14 Arkansas Economic Development Commission

Clark, Conway, Dallas, Faulkner, Garland, Grant, Hot Spring, Jefferson, Lonoke, Montgomery, Nevada, Pike, Pulaski, Pope, Saline, Yell and White Counties, Arkansas


FTZ 38 South Carolina State Ports Authority

Greenville, Spartanburg, Cherokee, Oconee, Union, Anderson, and Laurens Counties, South Carolina


FTZ 3 San Francisco Port Commission City and County of San Francisco and the County of San Mateo, California


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FTZ 46 Greater Cincinnati FTZ, Inc.

Hamilton, Butler, Warren, Brown and Clermont Counties


FTZ 244 March Joint Powers Authority

Western Riverside County Docket 45-2010Board Order No. 1761May 13, 2011

FTZ 138 Columbus Regional Airport Authority

Athens, Champaign, Clark, Coshocton, Crawford, Delaware, Fairfield, Franklin, Guernsey, Highland, Hocking, Knox, Licking, Logan, Madison, Marion, Morrow, Muskingum, Perry, Pickaway, Pike, Ross, Union, Vinton and Wyandot Counties


FTZ 181 Northeast Ohio Trade & Economic Consortium

Ashtabula, Trumbull, Mahoning, Columbiana, Portage, Summit, Stark, Medina, Wayne and Richland Counties


FTZ 72 Indianapolis Airport Authority

Bartholomew, Benton, Boone, Carroll, Cass, Clay, Clinton, Decatur, Delaware, Fayette, Fountain, Franklin, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Howard, Jennings, Johnson, Lawrence, Madison, Marion, Miami, Monroe, Montgomery, Morgan, Owen, Parke, Putnam, Rush, Shelby, Tippecanoe, Tipton, Vigo, Warren, Wayne, and White Counties


FTZ 104 Savannah Airport Commission

Bulloch, Bryan, Chatham, Effingham, Evans, Liberty, Long, and Screven Counties


FTZ 203 Port of Moses Lake Public Corporation

Benton, Chelan, Columbia, Douglas, Franklin, Grant, Kittitas, Lincoln and Walla Walla Counties, as well as portions of Okanogan and Yakima Counties


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FTZ 51 Duluth Seaway Port Authority

Carlton and Lake Counties, as well as portions of Itasca and St. Louis Counties


FTZ 102 St. Louis County Port Authority

City of St. Louis and St. Louis County Docket 61-2010Board Order No. 1772Approved: 06/22/11

FTZ 176 Greater Rockford Airport Authority

Winnebago, Stephenson, Ogle, Lee, DeKalb, and Boone Counties


FTZ 64 Jacksonville Port Authority

Baker, Clay, Columbia, Duval, and Nassau Counties Docket 63-2010Board Order No. 1759Approved: 05/06/11

FTZ 50 Port of Long Beach

Orange County and portions of Los Angeles and San Bernardino Counties


FTZ 86 Port of Tacoma Pierce County Docket 68-2010Board Order No. 1765Approved: 05/20/11

New GP Zone Houma-Terrebonne Airport Commission

Terrebonne Parish Docket 69-2010*

FTZ 153 City of San Diego San Diego County and a portion of Riverside County Docket 1-2011Board Order No. 1766Approved: 06/03/11

FTZ 53 City of Tulsa-Rogers County Port Authority

Rogers County Docket 8-2011*

FTZ 182 City of Fort Wayne

Adams, Allen, DeKalb, Huntington, Noble, Wabash, Wells, and Whitley Counties


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FTZ 137 Washington Dulles Foreign Trade Zone Inc.

Frederick, Clarke, Loudoun, Fairfax, Fauquier, Prince William, and Arlington Counties and the City of Alexandria

Docket 19-2011*

FTZ 47 Greater Cincinnati Foreign Trade Zone, Inc.

Boone, Kenton, and Campbell Counties Docket 21-2011Board Order No. 1774Approved: 07/26/11

FTZ 106 Port Authority of Greater Oklahoma City

Blaine, Caddo, Canadian, Cleveland, Comanche, Custer, Garfield, Garvin, Grady, Kay, Kingfisher, Lincoln, Logan, McClain, Noble, Oklahoma, Payne, Pontotoc, Pottawatomie, Seminole, and Stephens Counties

Docket 20-2011*

FTZ 41 Foreign-Trade Zone of Wisconsin, Ltd.

Kenosha, Milwaukee, and Racine Counties Docket 23-2011*

FTZ 205 Oxnard Harbor District

Ventura County Docket 25-2011*

FTZ 141 County of Monroe Monroe County Docket 29-2011*

FTZ 216 Port of Olympia Thurston County and portions of Lewis, Mason, and Kitsap Counties

Docket 31-2011Board Order No. 1777Approved 08/03/11

FTZ 225 City of Springfield Airport Board

Barry, Barton, Cedar, Christian, Dade, Dallas, Douglas, Greene, Hickory, Howell (partial), Jasper, Laclede, Lawrence, McDonald, Newton, Ozark, Polk, Stone, Taney, Texas (partial), Vernon, Webster, and Wright Counties.

Docket 32-2011*

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FTZ 59 Lincoln Foreign-Trade Zone, Inc.

Lancaster, Otoe, and Seward Counties Docket 33-2011*

FTZ 161 Board of County Commissioners of Sedgwick County

Butler, Harvey, McPherson, Reno, Saline, Sedgwick, and Sumner Counties

Docket 34-2011*

FTZ 277 Greater Maricopa Foreign-Trade Zone, Inc.

Western Maricopa County Docket 36-2011*

Docket 37-2011

FTZ 119 Greater Metropolitan Area Foreign-Trade Zone Commission

Isanti, Chisago, Sherburne, Wright, Anoka, Washington, Ramsey, Hennepin, McLeod, Carver,Scott, Dakota, Sibley, LeSueur, and Rice Counties

Docket 40-2011*

FTZ 124 Port of South Louisana

St. Charles, St. John the Baptist, St. James, La Fourcheand St. Mary Parishes

Docket 44-2011*

FTZ 215 Sebring Airport Authority

DeSoto, Glades, Hardee, Hendry, Highlands andOkeechobee Counties and the Cities of Belle Glade and Pahokee

Docket 46-2011*

FTZ 77 City of Memphis Shelby County Docket 51-2011*

FTZ 74 Baltimore Development Corporation

City of Baltimore and the Counties of Anne Arundel, Baltimore, Cecil and Harford

Docket 53-2011*

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Activation Process

Once a company locates in a zone site, it is in a “designated” site. Any individual

company must still “activate” with local U.S. Customs and Border Protection to use the

FTZ program.

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FTZ ACTIVATION PROCESS19 C.F.R. § 146.6FTZ Operations ManualSite PlanPurpose of Activation/ Manufacturing AuthorityGrantee ConcurrenceBackground InvestigationCargo Security ReviewFTZ Operator’s Bond

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APPLICATION FOR ACTIVATION

Site PlansA legal description and site plan detailing the area for which activation is requested.

Purpose of ActivationA description of the proposed zone activity.

Procedures ManualA manual that describes how the zone operation will be conducted.

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Concurrence of Grantee OrganizationA letter from the Grantee organization that acknowledges the activation of the operator.

Background InvestigationCertain information on key employees must be submitted for Customs to conduct background investigations.

Security InspectionA description of the security features of a zone operation.

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FTZ Operator’s BondA discussion of the required Foreign-Trade Zone Operator’s Bond and justification for its approval.

FIRMS CodeCustoms must be requested to assign a Facilities Information Resource Management System (FIRMS) Code Upon approval of the activation.

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Authority to Manufacture (if applicable)A description of the manufacturing process, if manufacturing will occur.

Statistical ReportingCertain data is required by the Bureau of Census.

Zone Inventory ManagementA description of how the merchandise will be tracked as foreign-trade zone inventory.

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Automated Commercial System CommitmentA commitment for establishment of an electronic interface with Customs through the Automated Commercial System (ACS) must be made.

Request for Specific AuthoritiesThere are specific authorities or options that may be requested of Customs, such as the ability to break and affix Customs seals by the Operator, yearly blanket admission authorization, direct delivery and weekly entry.

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Temporary/InterimManufacturing Authority

This is an extra incentive for a manufacturer to locate in Jacksonville area

industrial park zone sites.

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Background

Department of Commerce initiative to reduce program costs for small/medium manufacturers (SMMs)FTZ Staff directed to benchmark U.S. program with similar programs and procedures abroadResearched programs in 77 countriesMain finding: Some countries provide SMMs with quicker and simpler access to zone procedures

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Temporary/Interim Manufacturing (T/IM) Authority

FTZ Board delegates authority to Executive Secretary to approve T/IM cases in certain circumstancesApplies to any FTZ space (zone or subzone) already existing at time T/IM application is submittedT/IM authority for up to two years; non-renewableCan make application for permanent authority during T/IM period (incl. simultaneous with T/IM application)

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T/IM Authority

Goals for T/IM case processing:15 day pre-docketing period75 day processing period from docketing

30 day public comment periodThreshold (pre-filing) requirement to show “eligibility”

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T/IM Applications to Date

Docket No.

Company Name (City, State) Industry

Zone No. Date Filed

Date Approved

T-1-2005Shell Chemicals Yabucoa, Inc. Yabucoa, Puerto Rico) Petroleum 61I 2/11/2005 4/11/2005

T-2-2005

Southeastern New England Shipbuilding Corporation (Kingstown, Rhode Island) Shipbuilding 105 3/25/2005 6/8/2005

T-3-2005Brother Industries (U.S.A.) Inc. (Bartlett, Tennessee) Toner Cartridges 77B 9/29/2005 12/9/2005

T-4-2005Perkins Shibaura Engines, LLC (Griffin, Georgia)

Compact Diesel Engines 26 12/8/2005 2/21/2006

T-1-2006E.I. du Pont de Nemours and Company, Inc. (La Porte, Texas) Crop Protection 84C 3/24/2006 6/6/2006

T-2-2006TKD Industries, Inc. (Ronkonkoma, New York) Cosmetic Kitting 52 6/20/2006 7/31/2006

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Docket No.

Company Name (City, State) Industry

Zone No. Date Filed

Date Approved

T-3-2006

Norvanco International Inc./ Panasonic Consumer Electronics Co. (Sumner, Washington)

Home Theater Systems 86 9/26/2006 11/6/2006

T-4-2006Arvin Meritor, Inc. (Montgomery, Alabama)

Automotive Parts 222 10/20/2006 12/1/2006

T-5-2006 Motorola, Inc. (Fort Worth, TexasMobile Phone

Kitting 196 11/28/2006 2/20/2007

T-1-2007Kittel Supplier USA, Inc. (Duncan, South Carolina)

Automotive Parts 38 3/12/2007 5/04/2007

T-2-2007Perkins Shibaura Engines LLC (Griffin, Georgia)

Compact Diesel Engines 26 4/24/2007 7/09/2007

T-3-2007

Merck Sharpe & Dohme Quimica De Puerto Rico, Inc. (Caguas, Puerto Rico)

Pharmaceutical Products 7 5/10/2007 7/23/2007

T-4-2007ZF Lemforder Corporation (Duncan,

South Carolina)

Automotive Suspension Systems 38 9/26/2007 12/10/2007

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T/IM Applications to DateDocket No. Company Name (City, State) Industry Zone No. Date Filed Date Approved

T-5-2007 Kittel Supplier USA, Inc. (Duncan, South Carolina Automotive Parts 38 10/26/2007 1/07/2008

T-1-2008 Tampa Bay Shipbuilding and Repair Company Shipbuilding 79 04/08/2008 05/29/2008

T-2-2008 KIA Motors Manufacturing Georgia, Inc. Motor Vehicles 26 05/07/2008 ReviewTerminated

T-4-2008 CNH America, LLC ConstructionEquipment

267 09/30/2008 12/04/2008

T-5-2008 Excalibar Minerals LLC Barite Milling 122 11/20/2008 02/05/2009

T-1-2009 Volkswagen Group of America Chattanooga Operations, LLC

Motor Vehicles 134 07/10/2009 ReviewTerminated

T-1-2010 LG Electronics MobileComm USA, Inc. Cell Phones 22 01/13/2010 03/12/2010

T-2-2010 ATC Logistics & Electronics Cell Phones 196 03/30/2010 05/18/2010

T-1-2011 Baxter Healthcare Corporation Pharmaceutical 22 01/18/2011 02/11/2011

T-2-2011 Makita Corporation of America Garden Tools 26 06/22/2011 08/05/2011

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Average processing time = 62.5 daysT/IM Applications have been submitted for:

4 Special-purpose subzones20 General-purpose zones

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Eligibility for T/IM Consideration

Eligibility based on database of select inputs and finished products from preceding five years’ casesT/IM applications limited to 30 inputs and 10 finished products from database

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Eligibility for T/IM Consideration

Non-controversialT/IM applications use:

Six-digit HTSUS specificity orFour-digit HTSUS and “similar” to already approved activityInput-finished product combinations in database

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CONTACT INFORMATION

Scott S. Taylor, Esq.phone: (816) 561-4999

email: [email protected]

Miller & Company, P.C.4929 Main Street

Kansas City, Missouri 64112

www.millerco.com55844

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