Step One – The Application   There are 6 different types of applications that can be made to the Foreign-Trade Zones Board. They are:
New General Purpose Zone
Major Boundary Modification
New Subzone (Manufacturing/Distribution)
Manufacturing Authority within a General Purpose Zone
Manufacturing Authority Expansion
Temporary/Interium Manufacturing Authority

All applications for foreign-trade zones are submitted to the Foreign-Trade Zones Board Staff within the Import Administration of the Department of Commerce through the local grantee. The application submitted to the Board must provide extensive information on the proposed zone project including the purpose of the project, legal descriptions, public interest explanations, and HTSUS descriptions(if necessary).
There are fees for each type of application. These fees have been established within 15 CFR, Sect. 100.29, of the Foreign-Trade Zones Board regulations. The fees are:

• $0 For the initial zone project at a CBP port of entry or for minor modification requests.
• $3,200 For aAdditional general-purpose zone applications within a CBP port of entry
• $4,000 to $6,500 For subzone applications.
• $1,600 For the expansion of an existing foreign-trade zone.

Applications for foreign-trade zones are published in the Federal Register and are subject to public notice and comment proceedings. An examiner from the Foreign-Trade Zones Board staff is assigned to review and evaluate each individual application to ensure that the application meets statutory and regulatory requirements, including whether or not the proposal is in the public interest. The average processing time for a new general-purpose zone or subzone application is one year.

The Foreign-Trade Zones Board has an extensive website designed to take interested parties through the application process. Please take the time to review the FTZ Board’s website at http://www.ia.ita.doc.gov/ftzpage/applications.html to get all of the detailed and most up-to-date information on the application process.

Recommendation: “Feasibility Study”   The decision to pursue the establishment of a foreign-trade zone or subzone should be carefully researched. In the case of a new general purpose zone each community must weigh the resources required to market and operate a zone against the economic development an FTZ may be expected to generate. In its review of a FTZ application, the Foreign-Trade Zones Board will analyze certain factors which should be addressed in a feasibility study. These factors include: how the zone fits into the overall economic development plan of the community; the potential use of the zone by existing and new business firms; the adequacy of operational and financial plans; the suitability of proposed sites and facilities; the extent of local and state support; and the views of persons or firms likely to be affected by the proposed activity.

In the case of a subzone the company or corporation needs to evaluate if there is a savings to be achieved, does that savings cover the start-up costs of a new subzone, and what will the costs be going forward, to name a few. The company also needs to review how the subzone will benefit their community and will it adversely impact other companies within its industry.

Foreign-Trade Zones Board Contacts   All applications and correspondence can be sent to the FTZ Board via the following two addresses.

When contacting the FTZ Board by U.S. Postal Service:
Foreign-Trade Zones Board
U.S. Department of Commerce
FCB-Suite 4100W
1401 Constitution Avenue, NW
Washington, D.C. 20230

When you want to send an express delivery:
Foreign-Trade Zones Board
U.S. Department of Commerce
Franklin Court Building, Suite 4100W
1099 14th Street, NW
Washington, D.C. 20005

Telephone for the FTZ Board is 202.482.2862

Fax number for the FTZ Board is 202.482.0002

Step Two - Activation
Activating a Foreign-Trade Zone  Once the application has been approved and before operations can begin, the user/operator must activate with the local CBP office. Activation takes place locally under the supervision of the CBP Port Director and involves a review of zone procedures, inventory control, record keeping systems and security. Once the FTZ is activated, users may begin admitting merchandise under zone status.

Activation Request  Requests for activation are submitted in a letter addressed to the local Port Director of the U.S. Bureau of Customs and Border Protection (CBP). The area to be activated may include all or any portion of the zone approved by the Foreign-Trade Zones Board. The written request for activation usually includes a description of the zone sites covered by the original application, any operation to be conducted therein, and a statement regarding the general character of the merchandise to be admitted. The written request must also be accompanied by the following supporting documents: the initial blueprint of the area approved by the Board to be activated, a gauge table (where appropriate), a procedures manual in English describing the inventory control and record keeping systems that will be used in the zone, and the written concurrence of the grantee in cases where the operator requests activation.

Recommendation: Meet with Local CBP Office   Prior to beginning your application process the grantee, user or operator should have a meeting with the local CBP office to discuss the project. If this was not done then a meeting with them should be initiated prior to the Activation process. At this meeting a complete review of the project can be discussed along with CBP requirements for operations and what information CBP needs to approve activation of the project.

As part of the review process CBP will conduct background checks on those employees, within the company requesting activation, that CBP deems necessary. Background checks can take some time to complete so get them started as early in the process as possible.

Decision on Activation Request  A decision by CBP can take one to four months after the written request has been submitted. The decision of the Port Director will be the final CBP administrative determination in the matter. Upon approval of the request, a Foreign-Trade Zone Operators Bond must be executed on CBP Form 301. This bond, which cannot be less than $50,000, protects the revenue of the United States in the event that the operator does not comply with the U.S. Bureau of Customs and Border Protection regulations. Upon the Port Director's approval of the request for activation and acceptance of the executed bond, the zone will be considered activated and merchandise may be admitted into the zone under zone status.