US CBP Test to Grant Zone Operators Liberalized Procedures for Certain Zone Activities

A recent Federal Register Notice (FRN) released Friday, June 7th, 2013, announced the Foreign-Trade Zones Test, which is US Customs and Border Protection’s (CBP) plan to conduct a voluntary general test regarding certain foreign-trade zone activities. Under the prescribed conditions of the test, zone operators will be permitted liberalized procedures for certain zone activities. Specifically, zone operators who are approved for participation in the test will not be required to submit a CBP Form 216 (Application for Foreign-Trade Zones Activity Permit) for the manipulation, manufacture, or exhibition of merchandise within an FTZ where such activity has been previously approved in that zone’s Grant of Authority by the FTZ Board.

In addition, zone operators approved for participation in the test will have the option of allowing duty- paid merchandise that has been entered for consumption to remain in an activated zone area for up to 90 calendar days after CBP releases the merchandise, so long as the merchandise remains segregated, does not undergo further manufacturing, and is accurately recorded in the Inventory Control and Recordkeeping system (ICRS) within five business days of release.

The FTZ test is intended to evaluate whether liberalizing certain FTZ operational procedures will impact CBP’s supervision and control over the zone, as well as the agency’s ability to enforce applicable laws. The FRN invites public comment concerning the planned test, along with describing the eligibility and requirements for voluntary participation and outlines the development and evaluation methodology to be used in the test.

Any zone operator interested in participating in the FTZ test must submit an email to CBP establishing eligibility criteria by July 8th, 2013. Within 10 days of receipt of the email, CBP will notify interested parties of their test participation status. The initial phase of the FTZ test will commence July 17, 2013, and will run for approximately two years. CBP will begin an evaluation of this test approximately 90 days after the test’s commencement.

Click here to access the complete FRN in a pdf format, or here to access it in a text format.

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