Responsibilities of the Zone Grantee


The Grantee of a Foreign-Trade Zone project has a number of important responsibilities. A number of these are set forth in the Foreign-Trade Zones Act, the Foreign-Trade Zones Board regulations, and the Customs regulations. Other responsibilities are a natural consequence of being involved in the Zones program as a Grantee organization.

The Grantee files all applications with the Foreign-Trade Zones Board. In addition to the original application that results in the establishment of the Zone project, the Grantee files all applications to expand the Zone and establish Subzones. The Grantee also files requests – such as minor boundary modifications – that are handled as administrative actions by the Foreign-Trade Zones Board.

In the original Zone application, and in any subsequent expansions or minor boundary modifications, the Grantee is responsible for site selection. This means that the Grantee must confirm that it has the right of use of each site and that each site meets any land use requirements for Zone activities. For sites owned by the Grantee and for sites not owned by the Grantee, the Grantee is ultimately responsible for the maintenance of Zone facilities. This makes operator and user agreements particularly important as instruments that pass on these kinds of responsibilities.

The Grantee is responsible for seeing that the entire Zone project, including use of the General Purpose Zone and Subzones, is operated under public utility principles. The operating policies, rules and regulations, and fee structure must be set forth in the Grantee’s Zone Schedule, which is available to the public. (A copy of the Zone Schedule must also be filed with the Foreign-Trade Zones Board.)

The Grantee is responsible for its written concurrence when any General Purpose Zone or Subzone area is activated, deactivated, or altered. The Grantee must also issue any permits authorizing retail sales or other commercial activity involving domestic, duty-paid and duty-free goods within activated zone project. (Requests for such permits must also be forwarded for concurrence to the Foreign-Trade Zones Board and the Port Director of Customs.)

The Grantee is responsible for compiling information and filing all annual reports to the Foreign-Trade Zones Board.

The Grantee is also responsible for maintaining a number of documents concerning the Zone project. These include:

  • Grant of Authority
  • Board Orders
  • Applications/requests submitted to the FTZ Board, including Subzone applications, boundary modification requests, manufacturing/processing requests and scope requests
  • Current layout drawings of approved sites showing activated portions
  • Grantee/Operator agreements

Although the Grantee is not directly responsible for inventory control and recordkeeping (this responsibility rests directly with each Zone or Subzone operator), the Grantee is considered by Customs to be ultimately liable for any outstanding Customs fines, penalties and/or liquidated damages should the Zone or Subzone operator be unable to pay them. Therefore, it behooves the Grantee to see that each Zone or Subzone operator utilizes inventory control and recordkeeping systems that are compliant with Customs requirements.

The Grantee is also responsible for marketing the Zone. Depending on the goals and objectives of the Zone project, the Grantee may find itself marketing access to the Zones program, storage and cargo handling services, or land or building space. Ideally, the services or amenities offered by a Grantee will serve to enhance the international competitiveness of firms that use its Zone project.

For further reference regarding Grantee responsibilities, see the following sources:

Foreign-Trade Zones Act

19 U.S.C. 81l
19 U.S.C. 81 n
19 U.S.C. 81p(b)

Foreign-Trade Zones Board regulations

15 C.F.R. 400.42
15 C.F.R.400.42(b)
15 C.F.R. 400.45(a)
15 C.F.R.400.46(b)
15 C.F.R. 400.46(c)
15 C.F.R. 400.46(d)

Customs regulations

19 C.F.R. 146.6

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