One of NAFTZ's most important roles is ensuring the unique interests of the foreign-trade zone community are effectively represented, recognized, and advanced in Washington. We advocate for the practical application of international trade policies and regulations to achieve maximum simplicity and effectiveness for the FTZ community.
The NAFTZ works hard to ensure congressional decision-makers and government agencies (including U.S. Customs and Border Protection [CBP], the Foreign-Trade Zone Board, U.S. Trade Representative (USTR) and others) understand the significant local and national economic impact of America’s foreign-trade zones. NAFTZ’s diverse membership contributes significant expertise and informed perspectives to major policy discussions in Washington.
NAFTZ POLICY AGENDA - Active Issues
Background:
Under current law, de minimis applies upon importation to the United States, defined by U.S. Customs and Border Protection (CBP) as the time goods physically arrive in the U.S. This means that products stored in U.S. FTZs cannot use the de minimis process, despite the fact that those goods have not yet been duty paid or declared for consumption into the U.S. Foreign-located businesses and distribution services however are able to utilize de minimis. These entities are able to enjoy an estimated 60% duty-and-tax savings by using de minimis, as well as an administrative advantage. This unequal treatment between U.S.-based and foreign located entities poses a serious threat to the future of U.S. retail, manufacturing, and distribution operations and jobs.
Status:
NAFTZ is seeking legislative changes to address this unintended consequence by expanding the Section 321 procedures to include U.S. FTZs.
Background:
Over NAFTZ opposition, two unfair and punitive restrictions on FTZs in the North American Free Trade Agreement (NAFTA) were carried over into the USMCA and its implementing legislation. Following significant NAFTZ advocacy efforts with Congress, the U.S. International Trade Commission (USITC) was tasked by the U.S. Trade Representative (USTR) to conduct a comprehensive study on the effects of these and other tariff policies resulting from free trade agreements. The released the report in May, 2023 and found that U.S. FTZs are, in fact, being disadvantaged by USMCA. You can read the full USITC report as well NAFTZ’s summary of key findings here.
Status:
NAFTZ is working with members of Congress to introduce a legislative fix to this disparity. With USMCA under review in 2025, there will be a focus on the agreement and analyzing needed changes to the agreement and implementing legislation.
Background:
This was formerly comprised of two separate advocacy issues, one focused on CBP resources at the headquarters level and another focused on CBP resources in the ports of entry. Through conversations with both CBP and DHS Subcommittee Appropriations staff, NAFTZ has combined the separate topics into one focus: To achieve Directed funding for CBP’s support of the FTZ program through virtual support offices, regionally focused, with skilled personnel familiar with FTZs to assist port officers with their responsibilities related to the U.S. FTZ program.
Status:
NAFTZ is actively pursuing directed CBP funding to support the U.S. FTZ Program.
Fair Treatment of FTZ goods should trade remedy tariffs be suspended/lowered:
Background:
Ensure that goods that are required to be admitted to an FTZ in PF status for Section 232, Section 301, and other trade remedy tariffs are not subject to those additional tariffs when entered for consumption at a time when the same trade remedy tariff is reduced or no longer in effect for other U.S. importers, if those tariffs are suspended or lowered.
Advocacy effort:
NAFTZ has worked to raise awareness around the same approach to AD/CVD duties in U.S. FTZs and is actively monitoring tariffs situations that might impact U.S. companies.
Background:
Customs regulations on FTZs (19 CFR Part146) have changed little since 1986. In 2024, NAFTZ relaunched an effort with CBP through the Customs Operations Advisory Committee (COAC) to modernize these regulations to account fully for the revolution in CBP automation as well as changes in global supply-chain management.
Status:
CBP’s review of 19 CFR 146 is still in process.
NAFTZ POLICY AGENDA - Issues on hold
Click the title of each issue below to see details for the issue.
Background:
The US Government has sought to prohibit and increase enforcement of the importation of goods into the US produced by forced labor, most notably products made by Uyghurs in China.
Status:
NAFTZ successfully advocated with CBP to allow U.S. FTZs to Store Detained Merchandise while under Forced Labor Review.
On Sept 16, 2024, U.S. Customs & Border Protection (CBP) announced in CSMS # 62269186 that CTPAT Trusted Trade Compliance importers may store merchandise undergoing forced labor review within U.S. Foreign Trade Zones (FTZs).
Background:
CSMS #53267891 along with guidance published in the ACE Frequently Asked Questions (https://www.cbp.gov/trade/automated/ace-faq) indicate if any good with an HTS/COO/MID/Zone Status combination not included on the weekly estimate is to be removed from the zone to go into the U.S. commerce, a supplemental 3461 including that HTS/COO/MID/Zone Status combination in sufficient quantity must be released by CBP prior to the removal of the good.
Status:
NAFTZ is putting this on hold pending CBP review of U.S. FTZ regulations.
Background:
Current 999-line limit on the cargo release filing (3461) forces some FTZs to file multiple weekly estimates in order to accommodate all HTS/COO/MID/Zone Status combinations or other factors of the unpredictability of goods removed from the zone in a given week.
Status:
NAFTZ is putting this on hold pending new data transmission options in future ACE development.
Background:
The NAFTZ Prioritization list for ACE programming is still active in the NAFTZ Automation Committee. FTZ ACE programming has never been completed, and a number of other ACE programming issues remain import issues for consideration.
Status:
Due to limited amount of funding for ACE development, focus on the ACE programming specific to FTZs has been put on hold. The line limitation on entries remains the highest programming priority and is still an open topic with CBP.
Background:
The FTZ Board’s ability to promote and enhance the U.S. FTZ program is limited by the number of personnel and resources that must to dedicated in support of application processes, production of the FTZ Board Annual Report, and continuous improvement to the FTZ Board website as a resource to the FTZ community.
Status:
Due to changes in administration and focus on the more urgent need for FTZ directed funding for CBP resources to support FTZ activity, this advocacy topic is on hold.
Background:
15 CFR Part 400 includes the substantive and procedural rules for the authorization of zones and for the Board's regulation of zone activity. The purpose of zones as stated in the Act is to “expedite and encourage foreign commerce, and other purposes.” The 15 CFR 400 regulations provide the legal framework for accomplishing this purpose in the context of evolving U.S. economic and trade policy, and economic factors relating to international competition.
Status:
Due to changes in administration and focus on the more urgent needs, this advocacy topic is on hold.
Background:
99% of Customs duties and with all taxes and fees paid on a Type 01 7501 entry can be claimed under duty drawback. If the same material is admitted to a Zone and entry made on a Type 06 7501 entry, a duty drawback claim can still be filed but taxes and fees are not available for drawback.
Status:
Due to aspects of electronically filing drawback and in comparison with other advocacy topics, NAFTZ has decided not to pursue a regulatory fix for this scenario.
GET INVOLVED!
Our members play an important role in our advocacy efforts. Here are some ways that you can contribute: