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 FTZs Community 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 Duties Imported 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 Authority U.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 : AssembledSalvaged Manufactured DisplayedRelabeled Cleaned StoredMixed Sampled TestedDestroyed Processed RepairedRepackagedManipulated

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 FTZs General Purpose Facilities available for public use Generally industrial parks Subzone Single-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 Role Review 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 Role Handles 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 Grantee Submits Applications for Subzones and Zone Modifications Prepares Annual Reports Prepares Zone Schedule Interfaces with the FTZ Board Interfaces with U. S. Customs Interfaces with Subzone and General Purpose Operators

FTZ #122 Grantee – Port Corpus Christi Established in September 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 Sites Initiated 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 process Gaining 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 Operators BTB Refining Gulf Marine Fabricators Bay Ltd. TOR Minerals International CITGO Refining Valero Refining – Corpus Christi location Sherwin Alumina Halliburton Energy Services Flint Hills Resources Valero Refining – Three Rivers location Equistar Chemicals International Resistive Company (IRC) Kiewit Offshore Services Baker Hills Drilling Fluids

Subzone Application Process Application 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 Process Subzone must be authorized/approved by FTZ Board before activation process begins Written request for activation submitted to Customs Supporting documents required Blueprint of area Procedures manual Written concurrence from Grantee Guage table (where applicable)

Additional Resource Instructions for preparing and submitting applications are available on the Foreign-Trade Zones Board website:

Questions? Sonya Lopez-Sosa FTZ #122 Manager Port of Corpus Christi 361/ – Office 361/ – Fax -