FTZ Report Shows Program Under Utilized in New England

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Foreign-trade zones are secure areas under the supervision of U.S. Customs and Border Protection (CBP) that are considered outside the customs territory of the United States for the purposes of duty payment.

Located in or near customs ports of entry, they are the U.S. version of what is known internationally as free trade zones. Authority for establishing these facilities is granted by the Foreign-Trade Zones Board under the Foreign-Trade Zones Act of 1934, as amended (19 U.S.C. 81a-81u), and the Board’s regulations (15 C.F.R. Part 400). The Executive Secretariat of the Board is located within Enforcement and Compliance of the U.S. Department of Commerce in Washington, D.C.

During Fiscal Year 2015, the FTZ Board received and docketed 85 requests, and issued 87 decisions. The FTZ Board’s decisions included the establishment of four new foreign-trade zones, the reorganization or expansion of 22 zones under the alternative site framework (ASF), as well as decisions on 54 applications and notifications for new or expanded production authority. Under delegated authority, the FTZ Board Staff processed an additional 181 requests that included minor boundary modifications and scope determinations.

There were 186 FTZs actives during the year, with a total of 324 active production operations. Over 420,000 persons were employed at some 2,900 firms that used FTZs during the year. The value of shipments into zones totaled nearly $660 billion, compared with $798 billion the previous year. About 63 percent of the shipments received at zones involved domestic status merchandise. The level of domestic status inputs used by FTZ operations indicates that FTZ activity tends to involve domestic operations that combine foreign inputs with significant domestic inputs.

Warehouse/distribution operations received nearly $228 billion in merchandise while production operations received over $431 billion (65 percent of zone activity). The largest industries accounting for zone production activity include the oil refining, automotive, electronics, pharmaceutical, and machinery/equipment sectors.

Exports (shipments to foreign countries) from facilities operating under FTZ procedures amounted to over $84 billion.

Main Foreign-Status Products Received in U.S. FTZs

WAREHOUSE/DISTRIBUTION OPERATORS ($ million) PRODUCTION OPERATORS ($ million)
Vehicles 33,269 Oil/Petroleum 64,822
Consumer Products 12,781 Consumer Electronics 15,890
Consumer Electronics 11,153 Vehicle Parts 13,605
Electrical Machinery 10,954 Pharmaceuticals 6,416
Oil/Petroleum 9,665 Machinery/Equipment 6,104
Textiles/Footwear 8,907 Petrochemicals 2,606
Machinery/Equipment 7,731 Chemicals 1,498
Other Electronics 5,915 Other Electronics 1,316
Other Metals/Minerals 4,850 Plastic/Rubber 724
Pharmaceuticals 3,615 Aircraft/Spacecraft 722
Vehicle Parts 2,457 Other Metals/Minerals 513
Optical, Photographic and Medical Instruments 777 Consumer Products 448
Beverages/Spirits 733 Electrical Machinery 422
Plastic/Rubber 638 Optical, Photographic and Medical Instruments 314
Iron/Steel 479 Textiles/Footwear 209
Food Products 311 Advanced Fiber Materials 75
Tobacco Products 278 Fragrances/Cosmetics 67
Wood/Paper 175 Dyes/Pigments/Paints 67
Rail Cars, Parts & Equipment 153 Food Products 54
Stone/Plaster/Cement/Ceramics 126 Beverages/Spirits 54
Petrochemicals 118 Ships/Boats 45
Chemicals 103 Stone/Plaster/Cement/Ceramics 41
Fragrances/Cosmetics 95 Vehicles 39
Aircraft/Spacecraft 87 Iron/Steel 27
Advanced Fiber Materials 36 Arms/Ammunition 18
Arms/Ammunition 8 Wood/Paper 9
Dyes/Pigments/Paints 3 Rail Cars, Parts & Equipment 7
Ships/Boats 2

Article by our partner :
Glenn Page, Foreign Trade Zone & Customs Expert
Foreign Trade Zone Solutions LLC

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