Foreign-Trade Zones in the United States

Published on AidPage by IDILOGIC on Jun 24, 2005

Administered by:

US Federal Government Agency (see all agencies)
Department of Commerce , International Trade Administration
CFDA #: 11.111

Purpose of this program:

To help encourage domestic warehousing, manufacturing and processing activity. States and local communities use foreign-trade zones as part of their overall economic growth efforts to improve their international business service structure. In this way, FTZs contribute to the enhancement of their investment climate for commerce and industry.

Possible uses and use restrictions...

Zone procedures help firms reduce customs costs and help improve a domestic operation's international competitiveness. The procedures are available at facilities designated as foreign trade zones and sub zones under the sponsorship of local public and quasi-public corporations.

Who is eligible to apply...

Public and private corporations as defined by the Law, and by appropriate State enabling legislation.

Eligible Applicant Categories:
Eligible Functional Categories:
Credentials/Documentation

Applications contain: A cover letter, with exhibits, detailing corporation's eligibility to apply; type of authority requested; a site and facility description; project background; the need for a zone; public economic benefits; the relationship of the zone project to the overall community economic development plans; and how the project will be operated and financed. When manufacturing activity is involved, the application must also contain information on the activity, including products and components, tariff rates, benefits to the operator, industry information, international competitive factors, public benefits (e.g., employment retention/creation), and a demonstration of a net positive economic effect.

Note:This is a brief description of the credentials or documentation required prior to, or along with, an application for assistance.

About this section:

This section indicates who can apply to the Federal government for assistance and the criteria the potential applicant must satisfy. For example, individuals may be eligible for research grants, and the criteria to be satisfied may be that they have a professional or scientific degree, 3 years of research experience, and be a citizen of the United States. Universities, medical schools, hospitals, or State and local governments may also be eligible. Where State governments are eligible, the type of State agency will be indicated (State welfare agency or State agency on aging) and the criteria that they must satisfy.

Certain federal programs (e.g., the Pell Grant program which provides grants to students) involve intermediate levels of application processing, i.e., applications are transmitted through colleges or universities that are neither the direct applicant nor the ultimate beneficiary. For these programs, the criteria that the intermediaries must satisfy are also indicated, along with intermediaries who are not eligible.

How to apply...

Application Procedure:

Applications for zone authority are submitted by eligible applicants and reviewed under the regulations of the FTZ Board. The Board (Secretaries of Commerce (Chairman), and Treasury) can approve or deny the application, or approve it with restrictions. Applications are processed for the Board by the FTZ Staff/Import Administration/International Trade Administration, U.S. Department of Commerce.

Note: Each program will indicate whether applications are to be submitted to the Federal headquarters, regional or local office, or to a State or local government office.

Award Procedure:

Upon filing of an application, after a prefiling review, an examiner is appointed to investigate the proposal and make recommendations. Hearings are held in cases of new zones and public comments invited in all cases. When the Foreign-Trade Zones Board makes a decision an order is issued and published in the Federal Register.

Note: Grant payments may be made by a letter of credit, advance by Treasury check, or reimbursement by Treasury check. Awards may be made by the headquarters office directly to the applicant, an agency field office, a regional office, or by an authorized county office. The assistance may pass through the initial applicant for further distribution by intermediate level applicants to groups or individuals in the private sector.

Deadlines and process...

Deadlines

Not applicable.

Note: When available, this section indicates the deadlines for applications to the funding agency which will be stated in terms of the date(s) or between what dates the application should be received. When not available, applicants should contact the funding agency for deadline information.

Range of Approval/Disapproval Time

Applications are usually acted upon within 10 to 12 months of filing.

Preapplication Coordination

Draft applications are recommended. This program is excluded from coverage under E.O. 12372.

Note: This section indicates whether any prior coordination or approval is required with governmental or nongovernmental units prior to the submission of a formal application to the federal funding agency.

Appeals

A negative decision can be appealed by reapplication to the FTZ Board when warranted by evidence and circumstance.

Note: In some cases, there are no provisions for appeal. Where applicable, this section discusses appeal procedures or allowable rework time for resubmission of applications to be processed by the funding agency. Appeal procedures vary with individual programs and are either listed in this section or applicants are referred to appeal procedures documented in the relevant Code of Federal Regulations (CFR).

Renewals

Applicable when the Board places time constraints on the FTZs. In that event, a renewal application must be filed.

Note: In some instances, renewal procedures may be the same as for the application procedure, e.g., for projects of a non-continuing nature renewals will be treated as new, competing applications; for projects of an ongoing nature, renewals may be given annually.

Who can benefit...

Foreign Trade Zone's (FTZ) are required to operate under public utility principles, providing access to zone procedures on a nondiscriminatory basis to businesses and manufacturers. Zone procedures are available at any of the operating FTZ's, subject to customs requirements, a review process to determine that manufacturing activity is in the public interest, and the specific requirements of the local zone project.

Beneficiaries
About this section:

This section lists the ultimate beneficiaries of a program, the criteria they must satisfy and who specifically is not eligible. The applicant and beneficiary will generally be the same for programs that provide assistance directly from a Federal agency. However, financial assistance that passes through State or local governments will have different applicants and beneficiaries since the assistance is transmitted to private sector beneficiaries who are not obligated to request or apply for the assistance.

What types of assistance...

Provision of Specialized Services

Programs which provide Federal personnel directly to perform certain tasks for the benefit of communities or individuals. These services may be performed in conjunction with nonfederal personnel, but they involve more than consultation, advice, or counseling.

How much financial aid...

Range and Average of Financial Assistance

Not applicable.

Note: This section lists the representative range (smallest to largest) of the amount of financial assistance available. These figures are based upon funds awarded in the past fiscal year and the current fiscal year to date. Also indicated is an approximate average amount of awards which were made in the past and current fiscal years.

Obligations

(Operations and administration) FY 03 $956,431; FY 04 est $1,050,000; and FY 05 est $1,100,000.

Note: The dollar amounts listed in this section represent obligations for the past fiscal year (PY), estimates for the current fiscal year (CY), and estimates for the budget fiscal year (BY) as reported by the Federal agencies. Obligations for non-financial assistance programs indicate the administrative expenses involved in the operation of a program.

Account Identification

13-1250-0-1-376.

Note: Note: This 11-digit budget account identification code represents the account which funds a particular program. This code should be consistent with the code given for the program area as specified in Appendix III of the Budget of the United States Government.

Examples of funded projects...

Not applicable.

About this section

This section indicates the different types of projects which have been funded in the past. Only projects funded under Project Grants or Direct Payments for Specified Use should be listed here. The examples give potential applicants an idea of the types of projects that may be accepted for funding. The agency should list at least five examples of the most recently funded projects.

Program accomplishments...

The Board processes approximately 60 to 80 applications each year covering new general-purpose zones, sub zones, and zone expansions.

Criteria for selecting proposals...

Not applicable.

Assistance considerations...

Length and Time Phasing of Assistance

Not applicable.

Formula and Matching Requirements

Not applicable.

Note:
A formula may be based on population, per capita income, and other statistical factors. Applicants are informed whether there are any matching requirements to be met when participating in the cost of a project. In general, the matching share represents that portion of the project costs not borne by the Federal government. Attachment F of OMB Circular No. A-102 (Office of Management and Budget) sets forth the criteria and procedures for the evaluation of matching share requirements which may be cash or in-kind contributions made by State and local governments or other agencies, institutions, private organizations, or individuals to satisfy matching requirements of Federal grants or loans.

Cash contributions represent the grantees' cash outlay, including the outlay of money contributed to the grantee by other public agencies, institutions, private organizations, or individuals. When authorized by Federal regulation, Federal funds received from other grants may be considered as the grantees' cash contribution.

In-kind contributions represent the value of noncash contributions provided by the grantee, other public agencies and institutions, private organizations or individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically identifiable to the grant program. When authorized by Federal legislation, property purchased with Federal funds may be considered as grantees' in-kind contribution.

Maintenance of effort (MOE) is a requirement contained in certain legislation, regulations, or administrative policies stating that a grantee must maintain a specified level of financial effort in a specific area in order to receive Federal grant funds, and that the Federal grant funds may be used only to supplement, not supplant, the level of grantee funds.

Post assistance requirements...

Reports

Annual reports on FTZ operations are submitted by grantees.

Note: This section indicates whether program reports, expenditure reports, cash reports or performance monitoring are required by the Federal funding agency, and specifies at what time intervals (monthly, annually, etc.) this must be accomplished.

Audits

FTZ operations are supervised and audited by the U.S. Customs Service and monitored by the Foreign-Trade Zones Board in terms of restrictions imposed by board and the general public interest mandate of the FTZ Act.

Note: This section discusses audits required by the Federal agency. The procedures and requirements for State and local governments and nonprofit entities are set forth in OMB Circular No. A-133. These requirements pertain to awards made within the respective State's fiscal year - not the Federal fiscal year, as some State and local governments may use the calendar year or other variation of time span designated as the fiscal year period, rather than that commonly known as the Federal fiscal year (from October 1st through September 30th).

Records

Each grantee is required to keep records pursuant to the FTZ Board's (15 CFR 400), and Customs regulations (19 CFR 146).

Note: This section indicates the record retention requirements and the type of records the Federal agency may require. Not included are the normally imposed requirements of the General Accounting Office. For programs falling under the purview of OMB Circular No. A-102, record retention is set forth in Attachment C. For other programs, record retention is governed by the funding agency's requirements.

Regulations...

Authorization

Foreign-Trade Zones (FTZ) Act of 1934, 48 Stat. 98-1003, 19 U.S.C. 81a-81u, as amended, Public Law 81-566, 64 Stat. 246; Public Law 85-791, 72 Stat. 945; Public Law 91-271, 84 Stat. 292; Public Law 96-609, 94 Stat. 3561 Section 231; Public Law 98-573, 98 Stat. 142 and 299; Public Law 99-386, 100 Stat. 823; Public Law 99-514; Public Law 100-418, 102 Stat. 1300; Public Law 100-647, 102 Stat. 3808; Public Law 100-449, 102 Stat. 1863; Public Law 101-382, 104 Stat. 706 and 710.

Note: This section lists the legal authority upon which a program is based (acts, amendments to acts, Public Law numbers, titles, sections, Statute Codes, citations to the U.S. Code, Executive Orders, Presidential Reorganization Plans, and Memoranda from an agency head).

Regulations, Guidelines, And Literature

Commerce Regulations, 15 CFR, Part 400 (15 CFR 400). U.S. Custom Regulations, (19 CFR Part 146), FTZ Board Guidelines (see web site below).

Contact information...

Web Sites
Regional Or Local Office

Commerce District Offices.

Note: This section lists the agency contact person, address and telephone number of the Federal Regional or Local Office(s) to be contacted for detailed information regarding a program such as: (1) current availability of funds and the likelihood of receiving assistance within a given period; (2) pre-application and application forms required; (3) whether a pre-application conference is recommended; (4) assistance available in preparation of applications; (5) whether funding decisions are made at the headquarters, regional or local level; (6) application renewal procedures (including continuations and supplementals) or appeal procedures for rejected applications; and (7) recently published program guidelines and material. However, for most federal programs, this section will instruct the reader to consult the so-called Appendix IV of the Catalog due to the large volume of Regional and Local Office Contacts for most agencies. This information is provided in Additional Contact Information (see below).

Headquarters Office

Office of the Executive Secretary, Foreign- Trade Zones Board, 1401 Constitution Avenue, NW., Room FCB 4100W, Washington, DC 20230. Inquiries should be directed to Dennis Puccinelli, Executive Secretary, Foreign-Trade Zones Board. Telephone: (202) 482-2862.

Note: This section lists names and addresses of the office at the headquarters level with direct operational responsibility for managing a program. A telephone number is provided in cases where a Regional or Local Office is not normally able to answer detailed inquiries concerning a program. Also listed are the name(s) and telephone number(s) of the information contact person(s) who can provide additional program information to applicants.

Additional Contact Information (Appendix IV)

Due to the large volume of regional and local office contacts for most agencies, full contact information is also provided separately here in a PDF format: