The Application Process
When a community determines that a Foreign-Trade Zone project is needed and can be feasibly established and operated, then it must address the Foreign-Trade Zone application process. Prior to preparing the application, several questions should have already been answered:
- Who will serve as the Zone Grantee? The Grantee is typically a public corporation. The proposed Grantee must qualify to serve as a Grantee under state enabling legislation concerning Foreign-Trade Zones, and, should be an organization that represents a broad segment of the communitys economic interests.
- Which site or sites will serve as the communitys General Purpose Zone? The General Purpose Zone can be comprised of several non-contiguous sites. Industrial park areas with companies who are confirmed to be prospective users normally receive the highest priority. Sites set aside for industrial and commercial development are also often included. If sites are owned by parties other than the Grantee or other public entities, care must be taken to assure that all parties understand the potential benefits and obligations. Zone status does not confer additional value on real estate.
- Who will oversee and finance the operation of the Zone project? Will it be the Grantee or some private organization? In either case, the prospective Grantee must be able to demonstrate how will public utility principles be applied in the management and use of the Zone project.
The application itself consists of a letter of transmittal, an executive summary and five exhibits. These elements are outlined below with some parenthetical tips or commentary where pertinent.
Letter of Transmittal
- Must be currently dated and signed by officer of Grantee organization
- Type of organization making the application and its legal authority to do so
- Type of Zone authority requested (In the case of a new Zone project, this should be stated. Also, state whether the Zone project is being established under the "entitlement" provision, or if it is being established as an additional Zone project within a given port of entry.)
- Proposed Zone site, or sites, and the larger project of which the Zone is a part
- Project background (Briefly explain the impetus for establishing the project.)
- Relationship of the Zone project to the communitys economic development plans
- Plans for operating and financing the Zone project
Exhibit 1 -- Authority to Apply
- Certified copy of state enabling legislation (Contact your Secretary of State or the Clerk of your State Legislature.)
- Copy of pertinent sections of Grantees charter or organization papers
- Certified copy of Grantee resolution authorizing execution of the Letter of Transmittal and submission of the application
Exhibit 2 -- Site Description
- Description of Zone project with list of existing Zone sites
- Proposed site or sites with appropriate legal descriptions; addresses and indications as to the legal jurisdiction of site or sites (if multiple sites, label each, i.e. "Site 1," "Site 2," etc.)
- Description of the larger project of which the Zone is a part
- Statement regarding adjacency to a Customs port of entry
- Description of facilities and services available at the site or sites
- Description of existing or proposed site qualifications (zoning, etc.)
- Description of current or proposed activities
- Description of transportation services and facilities
- Possibilities for expansion
Exhibit 3 -- Operation and financing
- Site ownership and applicants right of use (or, alternatively, indications that the owner or owners will make the site available for zone use)
- Operational plan
- Customs automation
- Plans for financing capital and operating costs
- Estimated time schedule for construction and activation
Exhibit 4 -- Economic Justification
- Overview of communitys economic goals and objectives (Discuss the communitys overall economic plans. Describe the role that the Zone project plays in those plans.)
- Economic profile of the community (Discuss the communitys dominant economic sectors in terms of percentage of employment or income. Discuss the areas economic resources, its problems, and imbalances. Provide a description of the areas unemployment rates, foreign trade statistics. Describe the areas port facilities and/or its transportation networks.)
- Provide justification for the Zone project (Describe existing need, if you have identified it. Describe the Zone projects overall goals and objectives.)
- Description of each proposed site
Type of site
Services/facilities available or planned
Proposed Zone activity
Specific indication of interest
- Specific justification for each proposed site
Type of site
Types of services, facilities, and parcels available
Types of Zone uses that could be available
Specific proposed Zone users (include surveys, letters of interest if available)
- Environmental Impact (each site) Status of local zoning and land use permits/issues
- Will the use of FTZ procedures significantly change the physical aspects of the site, or change existing or proposed operations?
- Is FTZ status or the use of FTZ procedures a requirement or precondition for construction or activity at the site?
- Statement that applicant is aware that FTZ status would not exempt any site or party (e.g. operators or users) from any federal, state or local environmental requirements
- Statement as to whether any specific manufacturing authority is to be requested in the application
- If manufacturing authority is being requested
- Separate discussion of proposed manufacturing operations
- Detailed information on proposed activity is required (See Exhibit 4 on the "Subzone Applications" web page.)
Exhibit 5 -- Maps
- Local map indicating location of Zone site or sites
Detailed street map
- Detailed drawing of Zone sites showing Zone boundaries in red with dimensions and metes and bounds
- State map showing the Zones location relative to the states transportation networks
- Geodetic (or equivalent) map of each proposed site
If the Zone project is to be established as an additional Zone project adjacent to a particular port of entry, an application fee of $3,200 is required. If the Zone project is to be established under the entitlement provision, no fee is required.
Review and Processing by the Foreign-Trade Zones Board
In order to be approved by the Foreign-Trade Zones Board, an application goes through the following review and process:
Submission and Prefiling Review
Upon receipt of the application the Foreign-Trade Zones Board staff reviews it for sufficiency. If the application is deficient, it will be returned to the applicant within 20 days. If the application is found to be sufficient, then the Board formally files the application, assigns it a docket number, and notifies the applicant. This normally occurs within 45 days of submission.
The Foreign-Trade Zones Board publishes public notice of the application in the Federal Register and assigns an examiner (an internal staff member) to the case.
Filing in the Federal Register triggers the public comment period. During the public comment period (normally 60 to 90 days) interested parties may submit comments to the Board in support of, or in opposition to, the application.
If negative comments are received, then the applicant has up to 15 days after the close of the public comment period during which it may submit rebuttal comments to the Board. (Sometimes public comment periods may be extended in order to allow the various parties to reach a common understanding regarding the issues surrounding the application.)
The Board arranges for a public hearing, usually in the community where the proposed Zone project is to be established. Public notice as to the time and place of the public hearing are required.
The application is reviewed by the Foreign-Trade Zones Board examiner within the Department of Commerce, and by a representative of the Treasury Department, usually the office of the U.S. Customs Service having jurisdiction over the area to be served by the proposed Zone project.
Examiners Report and Recommendation
The examiners report (comments of the Department of Commerce staff and local office of U.S. Customs) is prepared and submitted to the Executive Secretary of the Foreign-Trade Zones Board. This normally occurs within 120 days of the close of the public comment period.
If the report is unfavorable, then the applicant will be notified (within 5 days of the reports submission) and the applicant will be given 30 days in which to respond with addition evidence to justify the applications approval.
If the report is favorable, then the application is sent to the Treasury Department and to the office of the Assistant Secretary of Commerce for Import Administration for final review.
Upon review and approval within the Departments of Commerce and Treasury, the Foreign-Trade Zones Board issues a Board Order and publishes the decision in the Federal Register and notifies the applicant of the applications approval.
Typically, applications that do not involve manufacturing under Zone procedures take from 10 to 12 months for processing and review. Applications that involve manufacturing under Zone procedures typically take 12 months or longer; however, applications that involve FTZ manufacturing authority that meet so-called "fast-track review" procedures may be processed more quickly.