CFR Subpart C

CFR Subpart C
in effect

15 C.F.R. § 400.21 Application to establish a zone.

(a) In general. An application for a grant of authority to establish a zone (including pursuant to the ASF procedures adopted by the Board (§ 400.2(c))) shall consist of an application letter and detailed contents to meet the requirements of this part. (b) Application format. Applications pursuant to this part shall comply with any instructions, guidelines, and forms or related documents, published in the Federal Register and made available on the Board's Web site, as established by the Executive Secretary specific to the type of application in question. An application submitted that uses a superseded format shall be processed unless the format has not been current for a period in excess of one year. (c) Application letter. The application letter shall be dated within six months prior to the submission of the application and signed by an officer of the corporation authorized in the resolution for the application (see § 400.21(d)(1)(iii)). The application letter shall also describe: (1) The relationship of the proposal to the state enabling legislation and the applicant's charter; (2) The specific authority requested from the Board; (3) The proposed zone site(s) and facility(ies) and any larger project of which the zone is a part; (4) The project background; (5) The relationship of the project to the community's and state's international trade-related goals and objectives; and (6) Any additional pertinent information needed for a complete summary description of the proposal. (d) Detailed contents. (1) Legal authority for the application shall be documented with: (i) A current copy of the state enabling legislation described in §§ 400.12(b) and (c); (ii) A copy of the relevant sections of the applicant's charter or organization papers; and (iii) A certified copy of a resolution of the applicant's governing body specific to the application authorizing the official signing the application letter. The resolution must be dated no more than six months prior to the submission of the application. (2) Site descriptions (including a table with site designations when more than one site is involved) shall be documented with: (i) A detailed description of the zone site, including size, location, and address (and legal description or its equivalent in instances where the Executive Secretary determines it is needed to supplement the maps in the application), as well as dimensions and types of existing and proposed structures, master planning, and timelines for construction of roads, utilities and planned buildings; (ii) Where applicable, a summary description of the larger project of which the site is a part, including type, size, location and address; (iii) A statement as to whether the site is within or adjacent to a CBP port of entry (including distance from the limits of the port of entry and, if the distance exceeds 60 miles, driving time from the limits of the port of entry); (iv) A description of existing or proposed site qualifications, including appropriate land-use zoning (with environmentally sensitive areas avoided) and physical security; (v) A description of current and planned activities associated with the site; (vi) A statement regarding the environmental aspects of the proposal; (vii) The estimated time schedules for construction and activation; and (viii) A statement as to the possibilities and plans for future expansion of the site. (3) Operation and financing shall be documented with: (i) A statement as to site ownership (if not owned by the applicant or proposed operator, evidence as to their legal right to use the site); (ii) A discussion of plans for operations at the site; (iii) A commitment to satisfy the requirements for CBP automated systems; and (iv) A summary of the plans for financing the project. (4) Economic justification shall be documented with: (i) A statement of the community's overall economic and trade-related goals and strategies in relation to those of the region and state, including a reference to the plan or plans on which the goals are based and how they relate to the zone project; (ii) An economic profile of the community including discussion of: (A) Dominant sectors in terms of employment or income; (B) Area strengths and weaknesses; (C) Unemployment rates; and (D) Area foreign trade statistics; (iii) A statement as to the role and objective of the zone project and a discussion of the anticipated economic impact, direct and indirect, of the zone project, including references to public costs and benefits, employment, and U.S. international trade; (iv) A separate justification for each proposed site, including a specific explanation addressing the degree to which the site may duplicate types of facilities at other proposed or existing sites in the zone; (v) A statement as to the need for zone services in the community, with specific expressions of interest from proposed zone users and letters of intent from those firms that are considered prime prospects for each specific proposed site; and (vi) For any production activity to be conducted at a proposed site, the separate requirements of § 400.14(a) must also be met. (5) Maps and site plans shall include the following documents: (i) State and county maps showing the general location of the proposed site(s) in terms of the area's transportation network; (ii) For any proposed site, a legible, detailed site plan of the zone area showing zone boundaries in red, with street name(s), and showing existing and proposed structures; and (iii) For proposals involving a change in existing zones, one or more maps showing the relationship between existing zone sites and the proposed changes. (e) ASF applications. In addition to the general application requirements of this section, applications under the ASF shall include the following, where applicable: (1) Service area. (2) Appropriate information regarding magnet sites. (3) Appropriate information regarding usage-driven sites or ASF subzones. (f) Additional information. The Board or the Executive Secretary may require additional information needed to evaluate proposals adequately. (g) Amendment of application. The Board or the Executive Secretary may allow amendment of an application. Amendments which substantively expand the scope of an application shall be subject to comment period requirements such as those of § 400.32(c)(2) with a minimum comment period of 30 days. (h) Drafts. Applicants are encouraged to submit a draft application to the Executive Secretary for review. A draft application must be complete with the possible exception of the application letter and/or resolution from the applicant. (i) Submission of completed application. The applicant shall submit the complete application, including all attachments, via email or by the method prescribed by the Executive Secretary pursuant to § 400.4(m).

15 C.F.R. § 400.22 Notification for production authority.

Notifications requesting production authority pursuant to § 400.14(a) shall comply with any instructions, guidelines, and forms or related documents, published in the Federal Register and made available on the Board's Web site, as established by the Executive Secretary. Notifications shall contain the following information: (a) Identity of the user and its location; (b) Materials, components and finished products associated with the proposed activity, including the tariff schedule categories (6-digit HTSUS) and tariff rates; and (c) Information as to whether any material or component is subject to a trade-related measure or proceeding (e.g., AD/CVD order or proceeding, suspension of liquidation under AD/CVD procedures).

15 C.F.R. § 400.23 Application for production authority.

In addition to any applicable requirements set forth in § 400.21, an application requesting production authority pursuant to § 400.37(c) shall include: (a) A summary as to the reasons for the application and an explanation of its anticipated economic effects; (b) Identity of the user and its corporate affiliation; (c) A description of the proposed activity, including: (1) Finished products; (2) Imported (foreign-status) materials and components; (3) For each finished product and imported material or component, the tariff schedule category (6-digit HTSUS), tariff rate, and whether the material or component is subject to a trade-related measure or proceeding (e.g., AD/CVD order or proceeding, suspension of liquidation under AD/CVD procedures); (4) Domestic inputs, foreign inputs, and plant value added as percentages of finished product value; (5) Projected shipments to domestic market and export market (percentages); (6) Estimated total or range of annual value of benefits to proposed user (broken down by category), including as a percent of finished product value; (7) Annual production capacity (current and planned) for the proposed FTZ activity, in units; (8) Information to assist the Board in making a determination under § 400.27(a)(3) and 400.27(b); (9) Information as to whether alternative procedures have been considered as a means of obtaining the benefits sought; (10) Information on the industry involved and extent of international competition; and (11) Economic impact of the operation on the area; and (d) Any additional information requested by the Board or the Executive Secretary in order to conduct the review.

15 C.F.R. § 400.24 Application for expansion or other modification to zone.

(a) In general. (1) A grantee may apply to the Board for authority to expand or otherwise modify its zone (including pursuant to the ASF procedures adopted by the Board (§ 400.2(c))). (2) The Executive Secretary, in consultation with CBP as appropriate, shall determine whether the proposed modification involves a major change in the zone plan and is thus subject to paragraph (b) of this section, or is minor and subject to paragraph (c) of this section. In making this determination the Executive Secretary shall consider the extent to which the proposed modification would: (i) Substantially modify the plan originally approved by the Board; or (ii) Expand the physical dimensions of the approved zone area as they relate to the scope of operations envisioned in the original plan. (b) Major modification to zone. An application for a major modification of an approved zone shall be submitted in accordance with the requirements of § 400.21, except that the content submitted pursuant to § 400.21(d)(4) (economic justification) shall relate specifically to the proposed change. (c) Minor modification to zone. Other applications or requests under this subpart shall be submitted in letter form with information and documentation necessary for analysis, as determined by the Executive Secretary, who shall determine whether the proposed change is a minor one subject to this paragraph (c) instead of paragraph (b) of this section (see § 400.38). Such applications or requests include those for minor revisions of zone or subzone boundaries based on immediate need, as well as for designation as a subzone of all or part of an existing zone site(s) (or site(s) that qualifies for usage-driven status), where warranted by the circumstances and so long as the subzone remains subject to the activation limit (see § 400.2(b)) for the zone in question. (d) Applications for other revisions to authority. Applications or requests for other revisions to authority, such as for Board action to establish or modify an activation limit for a zone, modification of a restriction, reissuance of a grant of authority or request for a voluntary termination shall be submitted in letter form with information and documentation necessary for analysis, as determined by the Executive Secretary. If the change involves the removal or significant modification of a restriction included by the Board in its approval of authority or the reissuance of a grant of authority, the review procedures of §§ 400.31 through 400.34 and 400.36 shall be followed, where relevant. If not, the procedure set forth in § 400.38 shall generally apply (although the Executive Secretary may elect to follow the procedures of §§ 400.31 through 400.34 and 400.36 when warranted).

15 C.F.R. § 400.25 Application for subzone designation.

In addition to the requirements of §§ 400.21(d)(1)(i) and (ii) pertaining to legal authority, § 400.21(d)(2)(vii) pertaining to environmental aspects of the proposal, and § 400.21(d)(3)(i) and (iii) pertaining to operation, a grantee's application for subzone designation shall contain the following information: (a) The name of the operator/user for which subzone designation is sought; (b) The nature of the activity at the proposed subzone; (c) The address(es) and physical size (acreage or square feet) of the proposed subzone location(s); and (d) One or more maps conforming to the requirements of section § 400.21(d)(5)(ii). For any production activity to be conducted at a proposed subzone, the separate requirements of § 400.14(a) must be met.

15 C.F.R. § 400.26 Criteria for evaluation of proposals, including for zones, expansions, subzones, or other modifications of zones.

The Board shall consider the following factors in determining whether to approve an application pertaining to a zone: (a) The need for zone services in the port of entry area, taking into account existing as well as projected international trade-related activities and employment impact; (b) The suitability of each proposed site and its facilities based on the plans presented for the site, including existing and planned buildings, zone-related activities, and the timeframe for development of the site; (c) The specific need and justification for each proposed site, taking into account existing sites and/or other proposed sites; (d) The extent of state and local government support, as indicated by the compatibility of the zone project with the community's master plan or stated goals for economic development and the views of state and local public officials involved in economic development. Such officials shall avoid commitments that anticipate the outcome of Board decisions; and (e) The views of persons likely to be materially affected by proposed zone activity.

15 C.F.R. § 400.27 Criteria applicable to evaluation of applications for production authority.

The Board shall apply the criteria set forth in this section in determining whether to approve an application for authority to conduct production activity pursuant to § 400.23. The Board's evaluation shall take into account information such as pertains to market conditions, price sensitivity, degree and nature of foreign competition, intra-industry and intra-firm trade, effect on exports and imports, ability to conduct the proposed activity outside the United States with the same U.S. tariff impact, analyses conducted in connection with prior Board actions, and net effect on U.S. employment and the U.S. economy: (a) Threshold factors. It is the policy of the Board to authorize zone activity only when it is consistent with public policy and, in regard to activity involving foreign merchandise subject to quotas or inverted tariffs, when zone procedures are not the sole determining cause of imports. Thus, without undertaking a review of the economic factors enumerated in § 400.27(b), the Board shall deny or restrict authority for proposed or ongoing activity if it determines that: (1) The activity is inconsistent with U.S. trade and tariff law, or policy which has been formally adopted by the Executive branch; (2) Board approval of the activity under review would seriously prejudice U.S. tariff and trade negotiations or other initiatives; or (3) The activity involves items subject to quantitative import controls or inverted tariffs, and the use of zone procedures would be the direct and sole cause of imports that, but for such procedures, would not likely otherwise have occurred, taking into account imports both as individual items and as components of imported products. (b) Economic factors. After its review of threshold factors, if there is a basis for further consideration of the application, the Board shall consider the following factors in determining the net economic effect of the proposed activity: (1) Overall employment impact; (2) Exports and re-exports; (3) Retention or creation of value-added activity; (4) Extent of value-added activity; (5) Overall effect on import levels of relevant products; (6) Extent and nature of foreign competition in relevant products; (7) Impact on related domestic industry, taking into account market conditions; and (8) Other relevant information relating to the public interest and net economic impact considerations, including technology transfers and investment effects. (c) The significant public benefit(s) that would result from the production activity, taking into account the factors in paragraphs (a) and (b) of this section. (d) Contributory effect. In assessing the significance of the economic effect of the proposed zone activity as part of the consideration of economic factors, and considering whether it would result in a significant public benefit(s), the Board may consider the contributory effect zone savings have as an incremental part of cost-effectiveness programs adopted by companies to improve their international competitiveness.

15 C.F.R. § 400.28 Burden of proof.

(a) In general. An applicant must demonstrate to the Board that its application meets the criteria set forth in these regulations. Applications for production-related authority shall contain evidence regarding the positive economic effect(s) and significant public benefit(s) that would result from the proposed activity and may submit evidence and comments concerning policy considerations. (b) Comments on applications. Comments submitted regarding applications should provide information that is probative and substantial in addressing the matter at issue relative to the nature of the proceeding, including any evidence of the projected direct impact of the proposed authority. (c) Requests for extensions of comment periods. Requests for extensions of comment periods shall include a description of the potential impact of the proposed authority and the specific actions or steps for which additional time is necessary. (d) Responses to comments on applications. Submissions in response to comments received during the public comment period or pursuant to § 400.33(e)(1) or § 400.34(a)(5)(iv)(A) should contain evidence that is probative and substantial in addressing the matter at issue.

15 C.F.R. § 400.29 Application fees.

(a) In general. This section sets forth a uniform system of charges in the form of fees to recover some costs incurred by the Foreign-Trade Zones staff of the Department of Commerce in processing the applications listed in paragraph (b) of this section. The legal authority for the fees is 31 U.S.C. 9701, which provides for the collection of user fees by agencies of the Federal Government. (b) Uniform system of user fee charges. The following fee schedule establishes fees for certain types of applications and requests for authority on the basis of their estimated average processing time. (1) Additional zones (§ 400.21; § 400.11(a)(2))—$3,200. (2) Subzones (§ 400.25): (i) Not involving production activity or involving production activity with fewer than three products—$4,000. (ii) Production activity with three or more products—$6,500. (3) Expansions (§ 400.24(b))—$1,600. (c) Timing and manner of payment. Application fees shall be paid prior to the FTZ Board docketing an application and in a manner specified by the Executive Secretary.

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