What is a Foreign Trade Zone (FTZ)?

A secure area located in or near a port of entry that is

considered to be outside the country, or at least, outside

U.S. Customs territory.

What is the Purpose of a FTZ?

To encourage, facilitate and expedite U.S. participation in international trade.

To encourage global competitiveness of U.S.-based companies

Benefits of FTZsCommunity Benefits

Economic growth

Jobs created or retained in the community

Creates opportunities for suppliers and service providers of the community

Can attract new business investments to the area

Benefits of FTZs (continued)Business Benefits

Defer, reduce or eliminate DutiesImported goods or domestic goods

designated for export are exempt from state and local ad valorem taxes

Goods can be held in a zone until a quota opens or for an unspecified length of time

CBP security requirements provide protection against theft

FTZ AuthorityU.S. Foreign Trade Zones Act of 1934

(19 USC 81a-u)

Foreign Trade Zones Board Regulations

(15 CFR Part 400)

U.S. Customs Service Regulations

(19 CFR Part 146)

What May be Done in an FTZ?Merchandise entering a zone may be:

Assembled Salvaged ManufacturedDisplayed Relabeled CleanedStored Mixed SampledTested Destroyed ProcessedRepaired Repackaged Manipulated

What May be Placed in an FTZ? Any foreign or domestic merchandise not

prohibited by law.The FTZ Board may exclude any

merchandise that in its judgment is detrimental to the public interest, health, or safety.

Merchandise subject to quota restrictions may be admitted until a quota on entry is removed; or may be manufactured or manipulated into a product that is not subject to quota.

Types of FTZsGeneral Purpose

Facilities available for public useGenerally industrial parks

SubzoneSingle-purpose sites for operations that cannot

be feasibly moved to, or accommodated in a general purpose zone (refineries, manufacturers, etc.)

FTZ Participants Overview

FTZ Board RoleReview applications to establish or alter the

boundaries of FTZs.

Recommend approval of any zone or subzone application which is in the public interest.

Regulate administration of FTZs.

CBP RoleHandles the day-to-day monitoring of

zone activity.Regulatory control over merchandise

moving to or from a zone.Ensure that all revenue is properly

collected.Ensure adherence to the laws and

regulations governing the merchandise.Ensure that merchandise has not been

overtly or illegally removed from the zone without proper Customs permits.

Role of the GranteeSubmits Applications for Subzones and

Zone ModificationsPrepares Annual ReportsPrepares Zone ScheduleInterfaces with the FTZ BoardInterfaces with U. S. CustomsInterfaces with Subzone and General

Purpose Operators

FTZ #122Grantee – Port Corpus ChristiEstablished in September 19853 General Purpose sites within FTZ #122

Located on Port complex and in industrial sites

Port owned warehouse and storage area available to users

14 Subzones within FTZ #122

Use of General-Purpose SitesInitiated by contacting FTZ Manager

Operator/Users shall comply with rules and regulations of FTZ Program

Operator/User responsible for preparation and filing of required Customs documents

Establishing Subzone Status in FTZ #122

Multi-step processGaining authorization from FTZ Board to

establish, operate and maintain a subzone

Gaining approval from Customs for activation to allow merchandise to be admitted to the zone

Subzone OperatorsBTB RefiningGulf Marine

FabricatorsBay Ltd.TOR Minerals International

CITGO RefiningValero Refining –

Corpus Christi locationSherwin AluminaHalliburton Energy

Services

Flint Hills ResourcesValero Refining –

Three Rivers locationEquistar ChemicalsInternational

Resistive Company (IRC)

Kiewit Offshore Services

Baker Hills Drilling Fluids

Subzone Application ProcessApplication is submitted by the Grantee on

behalf of company seeking FTZ benefits

Application submitted to the FTZ Board

Application must include extensive information on the proposed zone project

Application fees

Subzone Activation ProcessSubzone must be authorized/approved by

FTZ Board before activation process beginsWritten request for activation submitted to

CustomsSupporting documents required

Blueprint of area Procedures manualWritten concurrence from GranteeGuage table (where applicable)

Additional Resource

Instructions for preparing and submitting applications are available on the Foreign-Trade Zones Board website:http://ia.ita.doc.gov/ftzpage/applications.html

Sonya Lopez-Sosa

FTZ #122 Manager

Port of Corpus Christi

361/885-6187 – Office

361/881-5162 – Fax

Email - Sonya@pocca.com