[Federal Register: April 1, 1996 (Volume 61, Number 63)]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF COMMERCE
Lapse of Authority for Inactive Foreign-Trade Zones
AGENCY: Foreign-Trade Zones Board, International Trade Administration,
Department of Commerce.
SUMMARY: This notice is given as a reminder to foreign-trade zone
grantees and interested parties that Section 400.28(a)(5) (``lapse
provision'') of the regulations of the Foreign-Trade Zones (FTZ) Board
(15 CFR Part 400), which provides for the lapse of authority for
certain inactive foreign-trade zones, goes into effect on November 8,
1996. This information is provided as guidance for affected parties. It
outlines how various zones might be affected; the procedure for FTZ
activation; and, procedures which are under consideration for
implementation of the lapse provision and for a one-year reinstatement
period. The notice also provides certain interpretive guidelines and
invites comments in writing from interested parties.
EFFECTIVE DATE: The lapse provision first goes into effect for zones
approved prior to November 8, 1991, which have not been activated at
any time in the past and will not have been activated by November 8,
1996. Thereafter, it will have a continuing effect that requires
activation within 5 years of approval.
FTZ ACTIVATION: A zone grantee which will have reported in its annual
report to the FTZ Board the receipt of shipments under FTZ procedures
(and under Customs activation approval) at any time in the past prior
to November 8, 1996, and thereafter within the applicable time frame,
is deemed to have fulfilled the activation requirement with regard to
its general-purpose zone sites, and for any subzones for which
shipments have been reported. The grantees of zones so activated since
the last annual report period shall notify the Executive Secretary of
this fact with supporting information.
A zone project at which no shipments have been actually received
under FTZ procedures, but which is active in offering FTZ services to
the public, may fulfill the activation requirement as follows: (1)
obtain Customs activation approval under Section 146.6 of the Customs
regulations from the Customs Port Director (formerly, District
Director) for the area; and, (2) submit a zone schedule to the
Executive Secretary of the FTZ Board and to the Customs Port Director
pursuant to Section 400.42(b) of the FTZ regulations. The completion of
both these requirements will be hereafter referred to as ``FTZ
While these requirements apply to all zones, zone grantees having
no shipments to report and who are completing the requirements to avert
a lapse of authority under Section 400.28(a)(5), shall notify the
Executive Secretary in writing upon completion of the requirements,
stating the extent to which the zone is open for business. The
Executive Secretary will then, upon review, acknowledge in writing
whether FTZ activation has occurred.
REVIEW PROCEDURE: Beginning November 8, 1996, and thereafter on October
1 of each federal fiscal year, the FTZ Staff will conduct periodic
reviews with regard to zone projects that appear to be affected by
Section 400.28(a)(5). Based on findings made by the Executive
Secretary, a list will be maintained of those zones for which authority
has lapsed under Section 400.28(a)(5), and the U.S. Customs Service
will be kept advised.
REINSTATEMENT: Consideration will be given by the FTZ Board to the
adoption of a reinstatement procedure, which would allow zone grantees
to apply for reinstatement of FTZ authority if they fulfill FTZ
activation requirements within one year of a lapse of authority.
Grantees would notify the Executive Secretary when steps are being
taken to qualify for reinstatement. As part of a reinstatement, the FTZ
Board may resume processing applications which had been pending with
the FTZ Board or the FTZ Staff at the time of a lapse of authority.
INTERPRETIVE GUIDELINES: 1. A zone which had been in FTZ activation at
any time and for any length of time within the applicable time frame
(i.e., prior to the lapse date) is not affected by the lapse provision.
2. The FTZ activation of any part of a general-purpose zone or a
subzone will suffice to preserve FTZ authority for all of the general-
purpose sites of a zone project, but each subzone is considered
3. The starting time for tolling whether a lapse of authority has
occurred will be from the time of the original grant of authority for a
zone project, and it will affect all general-purpose zone sites and
subzones associated with the project, however recently approved, as
well as applications submitted to or pending with the FTZ Board or the
4. The FTZ activation of a general-purpose zone or subzone may be
considered to extend to separate, but related, general-purpose zones or
subzones approved for the same grantee pursuant to the same Board
action, if the Customs Port Director concurs that the
projects and/or sites are considered interrelated from a Customs
COMMENTS INVITED: Comments are invited in writing April 29, 1996 from
grantees and interested parties as to any of the information,
procedures or guidelines outlined in this notice. They should be
addressed to: Executive Secretary, Foreign-Trade Zones Board, U.S.
Department of Commerce, Room 3716, 14th and Pennsylvania Avenue, NW.,
Washington, DC 20230.
FOR FURTHER INFORMATION CONTACT: FTZ Staff--Claudia Hausler, (202) 482-
2862; U.S. Customs--Marcus Sircus, (202) 927-6894.
Dated: March 25, 1996.
John J. Da Ponte, Jr.,
[FR Doc. 96-7778 Filed 3-29-96; 8:45 am]
BILLING CODE 3510-25-P