NAFTZ’s Policy Agenda For 2018

The following are the major policy objectives adopted by the NAFTZ Board of Directors in 2018:

Policy Agenda

A smooth transition of FTZs to the Automated Commercial Environment (ACE)

As foreign-trade zones process about 10 percent of total U.S. merchandise imports, the so-called “single-window” initiative through the International Trade Data System (ITDS) to ensure full and timely integration of all FTZ compliance data onto the ACE platform is vital to maintain an efficient flow of international commerce across America’s borders. NAFTZ continues to work with U.S. Customs and Border Protection (CBP) and Congress to secure sufficient funding, set trade-enhancing objectives with realistic deadlines, and provide adequate opportunity for software testing.

Read the ACE Policy Brief

Revise the FTZ Board’s “production scope of authority” regulations

Current regulations do not adequately allow FTZ
operator/user companies sufficient flexibility to modify their
approved list of imported components and/or finished products to accommodate changing demands of global competition. NAFTZ continues to urge the FTZ Board to introduce changes that would allow use of six-digit Harmonized Tariff Schedule (HTS) numbers to define the scope of production authority (versus written commercial description), and a retrospective notification process to allow companies to maintain full compliance and keep assembly lines in operation. NAFTZ seeks a pilot program for both concepts, and new regulations where necessary.

Read the Scope of Authority Policy Brief

ACE programming for the FTZ e214 admission

An important milestone in the ITDS single-window initiative
occurred in 2017 with the integration of the e214 FTZ admission process from the legacy Automated Commercial System (ACS) software platform into ACE. The next step is to add Partner Government Agencies (PGAs) message sets into the e214 through ACE for those PGAs needing their compliance data for FTZ goods before entry from a zone into U.S. Customs territory. NAFTZ continues to work with the PGAs and CBP to facilitate this process and adopt a viable interim compliance process that fulfills the PGAs’ enforcement mandate while minimizing unnecessary burdens on FTZ filers.

A complete revision of the Customs Part 146 regulations of FTZs.

Customs regulations on FTZs have changed little since 1986. NAFTZ has launched an effort with CBP to modernize these regulations to account fully for the revolution in CBP automation and sweeping changes in modern global supply-chain management. NAFTZ seeks an expansion of direct delivery and elimination of the outdated five-day rule and the blanket 216 for manufacturing, manipulation, and exhibition. NAFTZ also seeks a proposed rule to transform the regulations, including those under subpart H dealing with the petroleum sector, to meet the 21st century needs of CBP, the FTZ community, and a more globally-integrated U.S. economy. The NAFTZ is pressing CBP to pursue
an immediate update and ensure a prominent voice for NAFTZ in the rewrite.

Read the Rewrite of Part 146 Policy Brief


Read the Expansion of Blanket 216 Policy Brief

North American Free Trade Agreement (NAFTA)

NAFTA renegotiation offers FTZ stakeholders an opportunity
to improve certain NAFTA rules that have adversely affected
FTZ operations. These include ensuring manufacturers in U.S.
FTZs get the same duty-free treatment when U.S. tariffs are
eliminated on imported components for factories in NAFTA
partner countries. Another is to change NAFTA rules on
drawback (i.e., duty refunds on exported goods) to ensure
U.S. FTZ manufacturers can compete equally with companies
in Canada and Mexico, which have rules relieving their
manufacturers from duty on goods destined for export. NAFTZ will continue to work with the Administration and Congress to ensure these changes are included in any new agreement and implementing legislation.

321/De Minimis

Recent changes to the U.S. informal-entry rules increased the duty-free de minimis level for imported goods from $250 to $800. This modification impacted supply chains, by encouraging a shift of direct-to-consumer e-commerce fulfillment operations for the U.S. market to Canada and other foreign locations. NAFTZ seeks to mitigate the adverse impact of this change on the FTZ program and stakeholders.

Approval of FTZ Production Authority

The Government Accountability Office (GAO) is examining the FTZ Board process for approving production authority applications facing certain domestic opposition. Where appropriate, NAFTZ will work to advance reforms in this process to allow broader utilization of the program.

Trusted Trader Programs

NAFTZ seeks recognition in CBP’s physical-security guidelines of FTZ supply-chain security requirements and enhanced benefits to FTZ operator/users with trusted-trader status under the Customs-Trade Partnership Against Terrorism (C-TPAT) and/or Importer Self-Assessment (ISA) programs.

Read the TEAM Policy Brief

How do I get Involved?

Our members play an important role in our advocacy efforts. Here are some ways that you can contribute:

Keep up to date on the industry

Our email blasts inform members of breaking developments in FTZ regulations and our monthly Zones Reports contain a section devoted to regulatory changes and policy developments that affect the FTZ community.

Participate in the Grantee or Operator/User Roundtable discussions

At our Spring Seminars and Annual Conferences, we host roundtable discussions to receive input on what issues are of greatest importance for our Grantees and Operators.

Take part in Congressional Visits/Congressional Updates

As part of our annual Legislative Summit, the NAFTZ encourages members to visit their elected Senators and Representatives on Capitol Hill, to share the impact of the FTZ program in their home states and districts. This allows members a first-hand opportunity to tell the story of how FTZs contribute to the U.S. economy and to educate Congress about issues affecting business. The NAFTZ encourages its members to update elected Senators and Representatives on the positive investment and employment in zone projects on a direct continuing basis.

Join a Committee, Working Group, or Task Force

Members are presented with ongoing opportunities to shape and engage in our policy work. Our Committees meet regularly to discuss concerns and recommend action by the NAFTZ.

Our Working Groups are organized around major policy or issue areas and they meet on an ongoing basis. The working groups are to designed to help us think long-term; identify new opportunities; and to mobilize members to address specific issues. We have recently had several very active working groups formed to address the ACE transition of specific PGA’s. Task forces bring members together on a short-term basis to gather insights, expertise, and information to meet a particular policy challenge. We have a very active ACE Taskforce for example.

Contact Jarmila Zapata if you are interested in participating on a working group or task force.