82340 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Proposed Rules 

Unsafe Condition 

(e) This AD was prompted by results from 

fuel system reviews conducted by the 

manufacturer. We are issuing this AD to 

prevent the potential of ignition sources 

inside fuel tanks, which, in combination with 

flammable fuel vapors, could result in a fuel 

tank explosion and consequent loss of the 

airplane. 

Compliance 

(f) Comply with this AD within the 

compliance times specified, unless already 

done. 

Installation 

(g) For airplanes in Groups 1 and 2, 

Configuration 2, as identified in Boeing 

Service Bulletin 777–28A0047, Revision 5, 

dated September 20, 2010: Within 36 months 

after the effective date of this AD, install a 

new P301 panel on the left side of the 

airplane, install a new P302 panel on the 

right side of the airplane, and change the 

wiring, in accordance with the 

Accomplishment Instructions of Boeing 

Service Bulletin 777–28A0047, Revision 5, 

dated September 20, 2010. 

(h) For airplanes in Groups 1 and 2, 

Configuration 1, as identified in Boeing 

Service Bulletin 777–28A0047, Revision 5, 

dated September 20, 2010: Within 36 months 

after the effective date of this AD, perform 

bonding resistance measurements and rework 

the airplane installation if necessary, 

depending on airplane configuration, in 

accordance with the Accomplishment 

Instructions of Boeing Service Bulletin 777– 

28A0047, Revision 5, dated September 20, 

2010. 

Concurrent Requirements 

(i) Prior to or concurrently with 

accomplishing the requirements of paragraph 

(g) of this AD, do the actions in paragraphs 

(i)(1), (i)(2), (i)(3), and (i)(4) of this AD. 

(1) Install new software in the electrical 

load management system (ELMS) electronics 

units in the P110, P210, and P310 power 

management panels, in accordance with the 

Accomplishment Instructions of Boeing 

Service Bulletin 777–28A0040, Revision 1, 

dated March 18, 2010. 

(2) Install airplane information 

management system 2 (AIMS–2) software in 

the AIMS–2 hardware, in accordance with 

the Accomplishment Instructions of Boeing 

Special Attention Service Bulletin 777–31– 

0097, Revision 3, dated February 22, 2007. 

(3) Modify the P110 left power 

management panel by incorporating wiring 

changes, in accordance with the 

Accomplishment Instructions of GE Aviation 

Service Bulletin 5000ELM–28–456, Revision 

1, dated January 7, 2010. 

(4) Modify the P210 right power 

management panel by incorporating wiring 

changes, in accordance with the 

Accomplishment Instructions of GE Aviation 

Service Bulletin 6000ELM–28–457, Revision 

1, dated January 7, 2010. 

Credit for Actions Accomplished in 

Accordance With Previous Service 

Information 

(j) Installations done before the effective 

date of this AD in accordance with Boeing 

Alert Service Bulletin 777–28A0040, dated 

April 13, 2007, are acceptable for compliance 

with the requirements of paragraph (i)(1) of 

this AD. 

(k) Installations done before the effective 

date of this AD in accordance with Boeing 

Service Bulletin 777–28A0047, Revision 3, 

dated June 11, 2009; or Revision 4, dated 

May 20, 2010; are acceptable for compliance 

with the requirements of paragraphs (g) and 

(h) of this AD. 

(l) Installations done before the effective 

date of this AD in accordance with Boeing 

Special Attention Service Bulletin 777–31– 

0097, dated March 30, 2006; Revision 1, 

dated August 10, 2006; or Revision 2, dated 

October 26, 2006; are acceptable for 

compliance with the requirements of 

paragraph (i)(2) of this AD. 

Paperwork Reduction Act Burden Statement 

(m) A Federal agency may not conduct or 

sponsor, and a person is not required to 

respond to, nor shall a person be subject to 

a penalty for failure to comply with a 

collection of information subject to the 

requirements of the Paperwork Reduction 

Act unless that collection of information 

displays a current valid OMB Control 

Number. The OMB Control Number for this 

information collection is 2120–0056. Public 

reporting for this collection of information is 

estimated to be approximately 5 minutes per 

response, including the time for reviewing 

instructions, completing and reviewing the 

collection of information. All responses to 

this collection of information are mandatory. 

Comments concerning the accuracy of this 

burden and suggestions for reducing the 

burden should be directed to the FAA at: 800 

Independence Ave., SW, Washington, DC 

20591, Attn: Information Collection 

Clearance Officer, AES–200. 

Alternative Methods of Compliance 

(AMOCs) 

(n)(1) The Manager, Seattle Aircraft 

Certification Office (ACO), FAA, has the 

authority to approve AMOCs for this AD, if 

requested using the procedures found in 14 

CFR 39.19. In accordance with 14 CFR 39.19, 

send your request to your principal inspector 

or local Flight Standards District Office, as 

appropriate. If sending information directly 

to the manager of the ACO, send it to the 

attention of the person identified in the 

Related Information section of this AD. 

Information may be e-mailed to: 9-ANMSeattle-ACO-AMOC-Requests@faa.gov. 

(2) Before using any approved AMOC, 

notify your Principal Maintenance Inspector 

or Principal Avionics Inspector, as 

appropriate, or lacking a principal inspector, 

your local Flight Standards District Office. 

Related Information 

(o) For more information about this AD, 

contact Georgios Roussos, Aerospace 

Engineer, Systems and Equipment Branch, 

ANM–130S, FAA, Seattle Aircraft 

Certification Office, 1601 Lind Avenue, SW., 

Renton, Washington 98057–3356; telephone 

(425) 917–6482; fax (425) 917–6590; e-mail: 

Georgios.Roussos@faa.gov. 

(p) For Boeing service information 

identified in this AD, contact Boeing 

Commercial Airplanes, Attention: Data & 

Services Management, P.O. Box 3707, MC 

2H–65, Seattle, Washington 98124–2207; 

telephone 206–544–5000, extension 1; fax 

206–766–5680; e-mail 

me.boecom@boeing.com; Internet https:// 

www.myboeingfleet.com. For GE Aviation 

service information identified in this AD, 

contact GE Aviation, Customer Services— 

Clearwater, P.O. Box 9013, Clearwater, 

Florida 33758; telephone 727–539–1631; fax 

727–539–0680; e-mail cs.support@ge.com. 

You may review copies of the referenced 

service information at the FAA, Transport 

Airplane Directorate, the FAA, 1601 Lind 

Avenue, SW., Renton, Washington. For 

information on the availability of this 

material at the FAA, call 425–227–1221. 

Issued in Renton, Washington, on 

December 17, 2010. 

Ali Bahrami, 

Manager,Transport Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. 2010–33000 Filed 12–29–10; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF COMMERCE 

Foreign-Trade Zones Board 

15 CFR Part 400 

[Docket No. 090210156–0416–01] 

RIN 0625–AA81 

Foreign-Trade Zones in the United 

States 

AGENCY: Foreign-Trade Zones Board, 

International Trade Administration, 

Commerce. 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: The Foreign-Trade Zones 

Board (the Board) proposes to amend its 

regulations, and invites public comment 

on these proposed amendments. 

Through this action, the Board proposes 

to amend the substantive and 

procedural rules for the authorization of 

Foreign-Trade Zones (FTZs or zones) 

and the regulation of zone activity. The 

purpose of zones as stated in the 

Foreign-Trade Zones Act (FTZ Act or 

the Act) is to ‘‘expedite and encourage 

foreign commerce, and other purposes.’’ 

The regulations proposed here 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. The changes 

are comprehensive and the proposed 

action constitutes a major revision. 

These revisions encompass changes 

related to manufacturing and valueadded activity, as well as new rules 

designed to address compliance with 

the Act’s requirement for a grantee to 


srobinson on DSKHWCL6B1PROD with PROPOSALS
Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Proposed Rules 82341 

provide uniform treatment for the users 

of a zone. The new rules should 

improve flexibility for U.S.-based 

operations, particularly for most 

circumstances involving exports; 

enhance clarity; and strengthen 

compliance and enforcement. The 

revisions would also reorganize the 

regulations in the interest of ease-of-use 

and transparency. 

DATES: Comments on the proposed rule 

must be received on or before April 8, 

2011. 

ADDRESSES: All comments must be 

submitted through the Federal 

eRulemaking Portal at http:// 

www.Regulations.gov, Docket No. ITA– 

2010–0012, unless the commenter does 

not have access to the internet. 

Commenters that do not have access to 

the internet may submit their comments 

by mail or hand delivery/courier. All 

comments should be addressed to 

Andrew McGilvray, Executive 

Secretary, Foreign-Trade Zones Board, 

International Trade Administration, 

U.S. Department of Commerce, 1401 

Constitution Avenue, NW., Room 2111, 

Washington, DC 20230. 

All comments received are a part of 

the public record and will generally be 

posted to http://www.Regulations.gov 

without change. All Personal Identifying 

Information (e.g., name, address) 

voluntarily submitted by the commenter 

may be publicly accessible. Do not 

submit Confidential Business 

Information or otherwise sensitive or 

protected information, as such 

information may become part of the 

public record. 

The FTZ Board will accept 

anonymous comments (enter N/A in 

required fields if you wish to remain 

anonymous). Attachments to electronic 

comments will be accepted in Microsoft 

Word, Excel, WordPerfect, or Adobe 

portable document file (pdf) formats 

only. All comments to Regulations.gov 

must be submitted into Docket Number 

ITA–2010–0012, and comments should 

refer to RIN 0625–AA81. The public 

record concerning these regulations will 

be maintained in the Office of the 

Executive Secretary, Foreign-Trade 

Zones Board, International Trade 

Administration, U.S. Department of 

Commerce, 1401 Constitution Avenue, 

NW., Room 2111, Washington, DC 

20230. Written public comments will be 

available at the facility in accordance 

with 15 CFR part 4 and may also be 

available electronically over the internet 

via http://www.trade.gov/ftz or http:// 

www.Regulations.gov. Questions may be 

directed to the Foreign-Trade Zones 

Board staff by calling (202) 482–2862 or 

via e-mail to ftz@trade.gov. 

FOR FURTHER INFORMATION CONTACT: 

Andrew McGilvray, Executive 

Secretary, Foreign Trade Zones Board, 

International Trade Administration, 

U.S. Department of Commerce, 1401 

Constitution Avenue, NW., Room 2111, 

Washington, DC 20230, (202) 482–2862 

or Matthew Walden, Senior Attorney, 

Office of Chief Counsel for Import 

Administration, U.S. Department of 

Commerce, 1401 Constitution Avenue, 

NW., Room 4610, Washington, DC 

20230, (202) 482–2963. 

SUPPLEMENTARY INFORMATION: 

Background 

Foreign-Trade Zones (FTZs or zones) 

are restricted-access sites in or near U.S. 

Customs and Border Protection (CBP) 

ports of entry. The zones are licensed by 

the Board and operated under the 

supervision of CBP (see 19 CFR part 

146). Specifically, zones are physical 

areas into which foreign and domestic 

merchandise may be moved for 

operations involving storage, exhibition, 

assembly, manufacture or other 

processing not otherwise prohibited by 

law. Zone areas ‘‘activated’’ by CBP are 

considered outside of U.S. customs 

territory for purposes of CBP entry 

procedures. Therefore, the usual formal 

CBP entry procedure and payment of 

duties is not required on the foreign 

merchandise in FTZs unless and until it 

enters U.S. customs territory for U.S. 

domestic consumption. In fact, U.S. 

duties can be avoided on foreign 

merchandise re-exported from a FTZ, 

including after incorporation into a 

downstream product through activity in 

the FTZ. Zones have as their public 

policy objective the creation and 

maintenance of employment through 

the encouragement of operations in the 

United States which, for customs 

reasons, might otherwise have been 

carried on abroad. 

Domestic goods moved into a zone for 

export may be considered exported 

upon entering the zone for purposes of 

excise tax rebates and drawback. 

‘‘Subzones,’’ a special-purpose type of 

ancillary zone, are authorized by the 

Board, through grantees of generalpurpose zones, in situations such as 

when the ‘‘adjacency’’ requirement 

(distance/driving time) for generalpurpose zones cannot be met. Goods 

that are in a zone for a bona fide 

customs reason are exempt from State 

and local ad valorem taxes. Zones and 

subzones are operated by corporations 

that have met certain regulatory criteria 

for submitting applications to the Board 

to operate zones. Under the FTZ Act, 

zones must be operated under public 

utility principles, and provide uniform 

treatment to all that apply to use the 

zone. The Board reviews and approves 

applications for authority to establish 

zone locations and to conduct certain 

activity within zones, and oversees zone 

grantees’ compliance with zone 

regulations. The Board can limit or deny 

zone use on a case-by-case basis on 

public interest grounds. In response to 

applications, the Board can also provide 

the applicant with specific authority to 

choose whether to pay duties either on 

the original foreign material or on a 

downstream product incorporating the 

foreign material. 

To receive approval to operate a zone, 

an applicant must demonstrate the need 

for zone services, a workable plan that 

includes suitable physical facilities for 

zone operations, and financing for the 

operation. Successful applicants are 

granted licenses to operate zones. 

License grantees’ sponsorship of 

specific sites for proposed FTZ 

designation is based on the grantees’ 

determinations regarding the sites’ 

appropriateness and potential for FTZ 

use, and a grantee may subsequently 

request removal of FTZ designation 

from a site based on factors such as the 

grantee’s determination that projected 

FTZ use has not occurred. 

Through this proposed action, the 

Board intends to update and modify the 

rules for FTZs. Continued interest in 

zones, on the part of both communities 

providing zone access as part of their 

economic development efforts and firms 

using zone procedures to help improve 

their international competitiveness, 

demonstrates zones’ importance to 

international trade and to investment in 

the domestic economy. Since the 

issuance of the Board’s current 

regulations (last revised substantively in 

1991), several issues or trends have 

emerged which necessitate fresh 

approaches in the regulations, as 

detailed below. Key revisions in the 

proposed regulations pertain to activity 

in zones in which an imported 

component is combined with one or 

more other components to create a 

different finished product. The current 

regulations divide such activity into two 

categories—‘‘manufacturing’’ or 

‘‘processing,’’ depending on whether the 

activity involves ‘‘substantial 

transformation’’ of the component—and 

apply procedures that can differ 

between the two categories. The 

proposed regulations would simplify 

use of the FTZ program through 

application of a unified concept— 

‘‘production’’ as defined in § 400.2(l)—and 

provide a single set of procedures 

pertaining to that type of activity. All 

changes to rules pertaining to 

production activity have been carefully 


srobinson on DSKHWCL6B1PROD with PROPOSALS
82342 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Proposed Rules 

balanced, including through adoption of 

certain additional constraints and 

safeguards such as enhanced authority 

to conduct reviews and restrict activity 

that is determined not to be in the 

public interest. 

The proposed regulations would 

eliminate the general requirement for 

advance approval from the FTZ Board 

for all manufacturing (i.e., substantial 

transformation) activity. The proposed 

regulations would only require advance 

approval for production activity under 

specific circumstances (e.g., if a lower 

U.S. duty rate will be applied to the 

component through its incorporation 

into a downstream product in the FTZ) 

(see § 400.14(a)). This and other changes 

related to production activity respond to 

trends such as dramatically shorter 

timeframes for companies’ decisionmaking on production locations (U.S. 

versus offshore), and the growth in 

contract manufacturing in which U.S. 

manufacturers compete with foreignbased alternatives for contracts under 

deadlines that are often incompatible 

with existing regulatory timeframes for 

obtaining authority from the FTZ Board. 

In circumstances where advance 

approval is required for specific 

production activity, the proposed rule 

would delegate authority to the 

Commerce Department’s Assistant 

Secretary for Import Administration to 

approve the activity on an interim basis 

pending completion of the full FTZ 

Board’s review of the request, which 

would significantly decrease the time a 

company must wait for approval (see 

§ 400.14(d)(3)). This new provision 

would replace and is significantly more 

flexible than the temporary/interim 

manufacturing (T/IM) procedure 

adopted by the FTZ Board in 2004 (and 

modified in 2006), and which had not 

yet been the subject of specific 

regulations. The T/IM procedure was 

limited to activity similar to that 

approved by the FTZ Board in the 

preceding five years. The new provision 

for interim approvals contains no 

requirement for similarity to recently 

approved activity. 

The proposed regulations also provide 

improved flexibility to accommodate 

changes in production at previously 

approved FTZ operations through 

retrospective notifications to the FTZ 

Board (see §§ 400.14(e)(1) and 400.37). 

The current regulations allow grantees 

or zone operators to notify the FTZ 

Board of new components but require 

advance approval for any new finished 

products. The proposed regulations 

would allow grantees or zone operators 

to notify the Board of new finished 

products as well as new components. 

However, in order to preserve the public 

process long associated with FTZ Board 

evaluation of new ‘‘manufacturing’’ 

activity, the proposed regulations would 

also require that a production operation 

obtain advance FTZ Board approval— 

after a public comment period on the 

proposal—for the list of broad categories 

of components or finished products 

within which specific new components 

or finished products would be notified. 

In addition, the proposed regulations 

would provide for a public comment 

period on all notifications submitted to 

the FTZ Board, as well as procedures to 

review any such notifications and to 

impose restrictions on notified changes 

when warranted. 

Two other significant areas of change 

in the proposed regulations pertain to 

the statutory requirements that each 

zone be operated as a public utility and 

provide uniform treatment to all that 

apply to use the zone. The current 

regulations do not provide grantees 

guidance on the practical 

implementation of these requirements. 

The proposed regulations would 

provide such guidance and would 

establish specific standards for 

compliance with those requirements 

(see §§ 400.42 and 400.43). For example, 

regarding the public utility requirement, 

they would tie the fees that a grantee 

charges zone users to the costs that the 

grantee incurs. With respect to the 

uniform treatment requirement, they 

would preclude certain conflicts of 

interest that could otherwise lead to 

non-uniform treatment of actual or 

potential zone users by private firms 

that assist zone grantees in zone 

management. Explicit standards 

regarding uniform treatment would help 

to ensure that the broadest range of U.S.- 

based operations can use zones to 

maximize their global competitiveness. 

Additionally, the proposed 

regulations would implement the 

statutory authority to issue fines for 

violations of the FTZ Act or the Board’s 

regulations through specific provisions 

targeting certain types of violations (see 

§ 400.62). The current regulations 

contain no provisions pertaining to the 

statutory fining authority. The fining 

provisions are supplemented by 

provisions through which the Board or 

the Commerce Department’s Assistant 

Secretary for Import Administration 

may order the suspension of the 

activated status of a zone operation in 

response to a violation. The proposed 

regulations’ fining and suspension-ofactivation provisions would help to 

ensure compliance with the statutory or 

regulatory requirements that zones 

submit annual reports to the FTZ Board, 

obtain advance approval (or submit 

notification) for certain production 

activity, and avoid certain conflicts of 

interest inconsistent with the statutory 

uniform treatment requirement. 

Finally, the proposed regulations 

contain a new provision allowing for the 

‘‘prior disclosure’’ of violations of the 

FTZ Act or the Board’s regulations (see 

§ 400.63). Disclosure of a violation to 

the FTZ Board prior to its discovery by 

the Board would generally result in the 

potential total fine for the violation (or 

series of offenses stemming from a 

continuing violation) being reduced to 

1,000 dollars. 

Thus, the proposed regulations would 

generally simplify and clarify 

requirements pertaining to FTZ use, 

while also helping to ensure compliance 

with specific statutory and regulatory 

requirements. The proposed regulations 

are intended to improve access and 

flexibility for U.S. manufacturing and 

value-added operations—particularly in 

most circumstances related to exports— 

and to enhance safeguards in order to 

avoid negative economic consequences 

from certain zone activity. 

Proposed changes are described in the 

following summary: 

1. Section 400.1. This section on the 

‘‘scope’’ of the regulations contains a 

summary statement of zone benefits to 

users and is essentially unaltered. 

2. Section 400.2. A small number of 

new terms or refinements to existing 

terms have been added to this 

definitions section. The definitions of 

‘‘manufacturing’’ and ‘‘processing’’ have 

been eliminated in favor of a new 

definition of ‘‘production’’ activity, for 

which advance approval (or 

notification) under specific 

circumstances and reporting to the 

Board would be required. 

3. Section 400.3. This section adopts 

with minimal alterations the contents of 

current § 400.11. The section contains a 

statement of the Board’s authority, the 

roles of the Chairman and Alternates, 

and the procedure for decision making 

(determinations). 

4. Section 400.4. This section on the 

Executive Secretary’s role is modified 

from current § 400.12 to reflect 

responsibilities involving application 

formats, termination of reviews under 

certain circumstances, production 

changes, fining, suspension of activated 

status, and retail trade. 

5. Section 400.5. This section is 

unchanged in substance from current 

§ 400.43. 

6. Section 400.6. This section is 

unchanged in substance from current 

§ 400.13. 

7. Section 400.11. This section closely 

parallels current § 400.21. 

8. Section 400.12. This section closely 

parallels current § 400.22. 


srobinson on DSKHWCL6B1PROD with PROPOSALS
Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Proposed Rules 82343 

9. Section 400.13. This section 

primarily incorporates existing 

restrictions and conditions from 

§ 400.28. Specifically, §§ 400.13(a)(1) 

through (a)(5) plus (a)(7) mirror current 

§§ 400.28(a)(1) and 400.28(a)(4)-(a)(7) 

and the first sentence of current 

§ 400.28(a)(8) regarding preconditions 

for actual use of FTZ designated sites, 

the lapse of authority for unused zones, 

authority to construct buildings in the 

zone, allowing federal and local officials 

to have access to the zone, and the sale 

or transfer of a grant of authority. In 

combination with § 400.14(a), 

§ 400.13(a)(6) parallels the general effect 

of current § 400.28(a)(2) regarding 

requirements specific to manufacturing. 

Section 400.13(a)(8) incorporates the 

language of all but the first sentence of 

current § 400.28(a)(8), and also adds a 

statutorily-derived sentence regarding 

no vested right to zone designation 

approved for privately owned land or 

facilities. Section 400.13(b) parallels 

existing §§ 400.31(a) and 400.33(a) 

regarding the authority to prohibit or 

restrict zone activity. Section 400.13(c) 

is unchanged from current § 400.28(b) 

regarding authority to impose additional 

conditions or restrictions on grants of 

authority. 

10. Section 400.14. This section 

addresses a series of general provisions 

and restrictions that relate to production 

activity in FTZs. Section 400.14(a) 

parallels the general effect of current 

§ 400.28(a)(2), but focuses on the types 

of production activity that have raised 

public interest concerns in certain 

circumstances in the past, or that appear 

to have significant potential to raise 

such concerns in the future (e.g., duty 

reduction on foreign components, 

avoidance of antidumping or 

countervailing duties, avoidance of 

orders of the International Trade 

Commission under 19 U.S.C. 1337). 

Section 400.14(b) is new and makes 

explicit in regulation an existing 

practice of requiring all activity 

involving production in zones to be 

reported annually to the Board. Section 

400.14(c) addresses the limits associated 

with the scope of approved production 

authority, and parallels to some degree 

a portion of current § 400.28(a)(2). 

Section 400.14(d)(1) is the same in 

substance as current § 400.32(b)(1)(iv), 

while §§ 400.14(d)(2) and (d)(3) are new. 

Section 400.14(d)(2) delegates authority 

to the Commerce Department’s Assistant 

Secretary for Import Administration to 

approve production authority where the 

sole zone benefit requiring advance 

approval from the Board is for scrap or 

waste resulting from the production 

activity. The new interim authority in 

§ 400.14(d)(3) replaces the temporary/ 

interim manufacturing (T/IM) authority 

adopted by the Board in 2004, but is 

potentially applicable to many 

applications involving production 

authority, while eliminating the 

complex comparison(s) to previously 

approved authority that had been 

required to establish eligibility for T/IM. 

Section 400.14(e)(1) parallels to some 

degree current §§ 400.28(a)(3)(ii) and 

(iii), but broadens the current 

notification provision for changes in 

‘‘sourcing’’ to encompass ‘‘production’’ 

changes (now defined as new finished 

products or new foreign components/ 

inputs), and it also imposes certain key 

limitations on the production change 

procedure. Section 400.14(e)(2) is new 

and defines a procedure for notification 

of increases in production capacity. 

Section 400.14(e)(3) to some degree 

parallels current § 400.28(a)(3)(iii)(B), 

and delineates authority to impose 

prohibitions or restrictions in response 

to production-change and capacityincrease notifications. Section 400.14(f) 

on ‘‘scope determinations’’ largely 

mirrors the content of current 

§ 400.32(c). Section 400.14(g) mirrors 

current § 400.33(b). 

11. Section 400.15 is new, and reflects 

a statutory change (Pub. L. 104–295, 

Sec. 31(a), 110 Stat. 3536 (1996), 

codified at 19 U.S.C. 81c(e)) regarding 

‘‘production equipment.’’ Specifically, 

this statutory change allows the 

reduction and deferral of duty payment 

on equipment assembled in a zone for 

use in production activity. The language 

of this section reflects the statute, the 

legislative history and Board practice. 

12. Section 400.16 relates to state and 

local ad valorem taxes and expands 

upon existing § 400.1(c) by adopting 

language regarding this topic from the 

conference report on the 1984 

legislation (Pub. L. 98–573, title II, Sec. 

231(a)(2), 98 Stat. 2990 (1984), codified 

at 19 U.S.C. 81o(e)). 

13. Section 400.21 is very similar in 

substance to current § 400.24, but 

eliminates the current format of five 

‘‘exhibits,’’ and instead provides for the 

requirements of the section to be 

addressed in guidelines/formats or 

related documents established by the 

Executive Secretary and published in 

the Federal Register. 

14. Section 400.22 indicates the 

requirements for production and 

subzone applications. The section is 

similar in many ways to current 

§ 400.25, but makes a clearer distinction 

between production requirements and 

subzone requirements to reflect the 

increasing prevalence of production 

activity in non-subzone environments 

and the increasing number of subzone 

applications involving only 

distribution-related activity. 

15. Section 400.23 is very similar in 

substance to current § 400.26, with the 

exception of the elimination of 

§ 400.26(b)(1), which allowed reference 

to information in applications already 

on file with the Board, and which has 

proven problematic in practice. 

16. Section 400.24 is generally similar 

to current § 400.23, but replaces one 

existing criterion encompassing the 

adequacy of operational and financial 

plans and the suitability and 

justification for a new zone site with a 

new criterion specific to the suitability 

of a new zone site and a new criterion 

specific to the justification for a new 

zone site. 

17. Section 400.25 sets forth criteria 

for evaluating production and subzone 

applications. The first paragraph of the 

section parallels current 

§ 400.27(d)(3)(v))(B). Sections 

400.25(a)(1) and (2) are substantively 

unaltered from current §§ 400.31(b)(1) 

and (2). Sections 400.25(b) and (c) 

essentially parallel current § 400.23(b), 

but distinguish more clearly between 

production authority and subzone 

designation, and require all applications 

for production authority to meet the 

significant public benefit standard 

because of the increasing incidence of 

production activity in general-purpose 

zone environments rather than in 

subzones. 

18. Section 400.26 parallels current 

§ 400.31(c)(3), but includes standards 

for all applications. 

19. Section 400.27 is substantively 

identical to current § 400.29. 

20. Sections 400.31 through 400.36 

delineate the procedural steps for 

processing applications, and are 

generally the same in content as current 

§ 400.27, but also incorporate the 

content of current § 400.31(c). However, 

the new sections provide greater ease-ofuse for the applicants by limiting each 

section to a particular case-processing 

stage. Section 400.31 parallels current 

§§ 400.27(a) and 400.27(b)(1). Section 

400.32 parallels current §§ 400.27(b)(2), 

400.27(c), and 400.27(d)(1). Section 

400.33 parallels current § 400.27(d)(2). 

Section 400.34(a) parallels current 

§ 400.27(d)(3) while § 400.34(b) parallels 

current § 400.31(c). Section 400.35 

parallels current § 400.27(e). Section 

400.36 parallels current § 400.27(f). 

21. Section 400.37, which establishes 

procedures for authority and 

notification related to production 

changes, parallels to some degree 

current §§ 400.28(a)(3)(ii) and (iii). 

However, the section is significantly 

expanded, with additional elements 

intended to make the procedure more 


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useful and also ensure the proper 

balance between flexibility and program 

oversight. 

22. Section 400.38 generally parallels 

current § 400.31(d) in both substance 

and structure. 

23. Section 400.41 is substantively 

unchanged from the current section of 

the same number. 

24. Section 400.42 provides new 

guidance and requirements related to 

the statutory mandate for operation of a 

zone as a public utility (referred to in 

current § 400.2(e)). This section also 

contains a provision allowing a delayed 

compliance date. 

25. Section 400.43 provides new 

guidance and requirements to 

implement the statutory mandate for a 

grantee’s uniform treatment of zone 

users (referred to in current 

§ 400.42(b)(2)(v)). This section also 

contains a provision allowing a delayed 

compliance date. 

26. Section 400.44 groups together 

requirements from current 

§§ 400.42(a)(1), 400.28(a)(4) and 

400.42(b)(1). 

27. Section 400.45 generally parallels 

current § 400.42 regarding requirements 

for a grantee’s zone schedule, but adds 

specificity to the documentation 

requirements for a zone’s policies and 

the standard contractual provisions the 

zone offers. This section also contains a 

provision allowing a delayed 

compliance date. 

28. Section 400.46 substantially 

modifies current § 400.42(b)(5), which 

dealt with complaints about fees, by 

adding in § 400.46(a) general procedures 

for complaints by zone participants 

regarding compliance with the uniform 

treatment requirement of the FTZ Act. 

Section 400.46(b), which addresses 

complaints about fees, adds new 

specificity. 

29. Section 400.47 is based on current 

§ 400.28(a)(9) regarding ordinary 

limitations on grantee liability, and 

provides further explanation concerning 

the bases for those limitations by adding 

language largely derived from the Board 

position in response to comments on 

§ 400.41 in the October 1991 final rule 

document for the current regulations. 

This section also adds a final sentence 

stating specific circumstances in which 

a grantee’s actions could undermine the 

limitations on its liability. 

30. Section 400.48 parallels current 

§ 400.45, but shifts responsibility for 

determinations from the Port Director 

(with the Executive Secretary’s 

concurrence) to the Executive Secretary 

(with the Port Director’s concurrence). 

31. Section 400.49 is substantively 

unchanged from current § 400.44. 

32. Section 400.51 is largely 

unchanged from current § 400.46, with 

minimal non-substantive additional 

language. 

33. Section 400.52 parallels current 

§ 400.51. 

34. Section 400.53 is unchanged in 

substance from current § 400.52. 

35. Section 400.54 is largely 

unchanged from current § 400.53, with 

the exception of an added sentence on 

the public nature of information 

submitted pursuant to certain regulatory 

sections. 

36. Section 400.61 closely parallels 

current § 400.28(c), with language added 

regarding the subzone operator. 

37. Section 400.62 is new and 

establishes procedures related to the 

imposition, mitigation, and assessment 

of fines as authorized by the FTZ Act 

(this authority is reflected in current 

§ 400.11(a)(10)), as well as for 

instructing CBP to suspend activated 

status in certain circumstances. 

38. Section 400.63 is new and 

establishes procedures for ‘‘prior 

disclosure’’ of information to the Board 

regarding violations of the FTZ Act or 

the Board’s regulations. 

39. Section 400.64 is unchanged in 

substance from current § 400.47. 

Classification 

This revision is proposed under the 

authority of section 8 of the ForeignTrade Zones Act of June 18, 1934, as 

amended (19 U.S.C. 81h). 

Executive Order 12866 

This proposed rule has been 

determined to be significant for 

purposes of Executive Order 12866. 

Regulatory Flexibility Act 

The Acting Chief Counsel for 

Regulation of the Department of 

Commerce certified to the Chief Counsel 

for Advocacy of the Small Business 

Administration that this proposed rule, 

if adopted, would not have a significant 

economic impact on a substantial 

number of small entities. (5 U.S.C. 

605(b)). In this rule, which is consistent 

with 19 USC 81a–1u, the Foreign Trade 

Zones Board proposes to simplify and 

expedite access to FTZ benefits for U.S. 

manufacturers, particularly for exportoriented activity. In addition, the 

revised regulations would provide 

increased transparency, guidance and 

enforcement of the public utility and 

uniform treatment aspects of the 

program. 

The FTZ Board’s current regulations 

date to 1991. The proposed rule would 

eliminate the general advance approval 

requirement for most export 

manufacturing. This approval process 

generally took between 6 and 12 

months. Instead, the proposed rule 

would require advance approval for 

export manufacturing only in certain 

relatively rare circumstances (such as 

when an imported component used in 

the manufacturing process is subject to 

an antidumping or countervailing duty). 

For manufacturing in FTZs for goods 

that are destined for the U.S. market, 

which generally is conducted in 

competition with factories overseas, the 

proposed rule would eliminate the FTZ 

Board’s general advance approval 

requirement and instead limit the 

advance approval process to the specific 

types of FTZ benefits that could 

potentially impact other domestic 

manufacturers. These amendments 

should dramatically reduce the 

economic burden on large and small 

businesses involved in FTZ export 

manufacturing by reducing and 

streamlining the regulatory process for 

such manufacturing. 

The second area of focus for the 

proposed rule involves circumstances in 

which the organization licensed by the 

FTZ Board to serve a particular region 

is not complying with the FTZ Act’s 

requirements to operate the zone as a 

public utility and provide uniform 

treatment to all users. Use of the FTZ 

program provides certain cost savings 

that are designed to enhance the 

competitiveness of U.S. facilities in 

competition with sites abroad. Improved 

access to FTZs and simplification of the 

rules and procedures regarding FTZ 

activity should therefore generally have 

a net positive effect for all potential 

users of the program regardless of size. 

To determine which entities using the 

FTZ program qualify as ‘‘small’’ entities, 

pursuant to 13 CFR 121.201, the FTZ 

staff used the Small Business 

Administration (SBA) size standards 

identified by North American Industry 

Classification System (NAICS) codes. 

Major users of the FTZ program include 

ocean freight companies and 

manufacturers of various products. 

Under the SBA size standards, ocean 

freight companies are considered small 

entities if they have fewer than 500 

employees. The size standards for 

manufacturing operations vary by the 

NAICS code of the product 

manufactured. Manufacturing in FTZs 

involves a wide variety of industries 

and products, and the NAICS codes for 

all zone users are not always known by 

the FTZ staff. Therefore, to assess the 

potential impact from this rule, FTZ 

manufacturing operations were 

categorized as ‘‘miscellaneous 

manufacturing’’ which, under the SBA 

size standards, are considered small 

entities if they have fewer than 500 


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employees. With these size standards, 

potentially impacted companies 

operating in FTZs were considered 

small entities if they had fewer than 500 

employees. Use of the 500 employee 

standard also appears consistent with 

what has been done in other 

circumstances that involve a large 

variety of industries. For example, 

under the Small Business Size 

Regulations, entities are considered 

small for the purpose of reduced patent 

fees if the number of employees does 

not exceed 500 (13 CFR 121.802), and a 

similar standard applies for entities to 

qualify for small business set-asides or 

8(a) contracts under 13 CFR 121.406. 

To determine the number of small 

entities involved, the FTZ Board staff 

analyzed data on activity within the 

zones in 2009 from annual reports 

submitted by each FTZ. The information 

submitted included the number and 

types of companies using each FTZ. 

Research was then conducted to 

determine whether each company 

would be considered a small entity. 

Based on the research and analysis 

conducted, it is anticipated that the rule 

would impact approximately 200 

business entities that have fewer than 

500 employees, i.e., small entities under 

13 CFR 121.201. The proposed revisions 

would apply equally to all companies 

and organizations involved in the FTZ 

program. However, simplified 

procedures for zone applicants and for 

access to zone use are expected to 

provide the greatest benefit to small 

entities, particularly those with more 

limited resources, because they would 

reduce administrative and application 

costs for these companies. These 

changes would allow program use by 

more small entities that are currently 

underserved in the program. The 

changes proposed in this rule also could 

increase the number of small entities 

using the program. Such an increase 

would result from the simplified 

procedures proposed and would extend 

the cost savings achieved through the 

program to additional small entities that 

had been unable to access those benefits 

in the past. 

The proposed rule would also reduce 

the number of applications for FTZ 

authority that need to be submitted for 

export manufacturing, thereby reducing 

the submission and recordkeeping 

burden on companies using the program 

for such activity. The reduction in 

burden is expected to increase the use 

of the program for this activity. In the 

past, the FTZ staff has received informal 

comments from companies that the 

application required was difficult to 

prepare, and that the process itself was 

burdensome and time consuming. The 

proposed rule is intended to address 

those concerns to the extent possible. 

Moreover, many changes in non-export 

related FTZ activity that currently 

require advance approval (through a 6 to 

12 month application process) would be 

eligible under the proposed rule for a 

dramatically simpler process that allows 

a company to notify the FTZ Board that 

a change has occurred in activity. This 

proposed change is in addition to the 

general elimination of advance approval 

for export manufacturing. As a result of 

this significantly reduced burden, use of 

the FTZ program should be much more 

accessible to all companies and, in 

particular, to small entities. 

The proposal to simplify procedures 

and reduce the number of applications 

submitted was the result of analysis and 

extensive discussion concerning the 

most effective means of improving the 

program while maintaining the 

appropriate balance and safeguards. The 

application structure for manufacturing 

in the current regulations is intended to 

ensure that other domestic companies 

are not negatively impacted if a 

company benefits from the savings 

available in the FTZ program. As a 

result, certain information and 

procedures are necessary in the review 

process, and the application process 

cannot be completely eliminated. At the 

same time, the FTZ Board recognizes 

that certain activity, such as 

manufacturing for export markets, 

generally does not have such an impact 

on other domestic companies. 

The preparation of the proposed rule 

involved an assessment of the areas 

where procedures could be simplified or 

reduced to decrease the burden on 

companies while maintaining those 

procedures that are necessary to ensure 

that the program is not misused. One 

alternative analyzed was to simplify the 

procedures pertaining to FTZ 

manufacturing, without eliminating the 

requirement for the submission of 

applications for certain manufacturing 

(particularly for most export activity). 

While this option would reduce the 

burden on all companies using the 

program, the net positive impact would 

be less than what is being proposed. In 

addition, the elimination of advance 

approval for most export manufacturing 

is expected to provide the greatest 

benefit to small entities using or seeking 

to use the program. The second 

alternative was to maintain the current 

application procedures. Under this 

alternative, there would be no impact on 

small entities using the program, but it 

would continue to discourage certain 

export activity as well as new 

companies, particularly small entities, 

from entering the program. This 

proposed rule would both eliminate the 

need for certain applications and 

simplify manufacturing-related 

procedures as a whole, resulting in the 

largest possible reduction in burden of 

the options considered. 

The FTZ Act and current regulations 

require the submission of an annual 

report from each zone to the FTZ Board. 

This reporting would not be impacted 

by the revised rule, and no increased 

burden would result. 

Most fundamentally, all businesses 

and organizations, whether small or not, 

have access to the use of FTZs. The 

proposed rule simply lays out the 

procedures that the FTZ Board would 

follow when businesses or organizations 

apply to establish FTZs or engage in 

certain activities in FTZs, and they 

delineate certain rights and 

responsibilities of zone grantees, 

operators and users that have decided to 

make use of the FTZ program. The 

procedures, rights and responsibilities 

apply equally, whether the affected 

party is a small or large entity. The FTZ 

Act of 1934 and the FTZ program are 

tools of economic development, and 

when entities use the FTZ program, it 

can be assumed they do so because it is 

in their economic interest. Accordingly, 

this proposed rule, which is designed to 

improve access to the FTZ program, 

should only further the economic 

interests of current and future zone 

users, including small entities. 

Because this rule results in reduced 

burden for many types of FTZ activity, 

with a net positive impact to entities 

involved in the FTZ program, this rule 

will not have a significant economic 

impact on a substantial number of small 

entities. Accordingly, an IRFA is not 

required, and none has been prepared. 

Executive Order 13132 

This proposed rule does not contain 

policies with Federalism implications 

sufficient to warrant preparation of a 

Federalism assessment under Executive 

Order 13132. 

Paperwork Reduction Act 

This rule contains information 

collection activities subject to the 

Paperwork Reduction Act. It would 

impose no additional reporting or 

record keeping burden on the public 

and there would be no impact on the 

collection that falls under the Office of 

Management and Budget (OMB) Control 

No. 0625–0109 (Annual Report to 

Foreign-Trade Zones Board). This 

proposed rule would amend the 

collection under OMB Control No. 

0625–0139 (Application to ForeignTrade Zones Board). Under this 

proposed rule, the application 


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82346 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Proposed Rules 

requirements associated with the latter 

collection for zone applicants, grantees, 

operators, and users would be 

simplified, and there is an overall 

reduction of the burden on those 

parties. The amended requirement 

would be submitted to OMB for 

approval. 

The changes proposed in this rule are 

expected to decrease the annual number 

of future production (manufacturing) 

applications submitted to the FTZ Board 

from 27 to 20. The reduction in the total 

number of applications would result, in 

part, from the elimination of the 

requirement for advance approval for 

certain export production activity. 

Moreover, many changes in non-export 

related FTZ activity that currently 

require advance approval (through a 6 to 

12 month application process) would be 

eligible under the proposed rule for a 

dramatically simpler process that allows 

a company to notify the FTZ Board that 

a change has occurred in activity. These 

changes are expected to reduce the total 

annual burden associated with 

applications for production authority 

from 1,026 to 680 hours. As a result of 

this significantly reduced burden, use of 

the FTZ program should be much more 

accessible to all companies involved in 

production activity. 

In addition to changes pertaining 

directly to production activity, the rule 

also specifically adopts the alternative 

site framework (ASF) authorized by the 

FTZ Board in December 2008. The ASF 

procedures reduce the time and 

complexity involved in designating FTZ 

sites for many companies. As use of the 

ASF becomes more widespread, the 

need for expansion and subzone 

applications will be reduced. As a 

result, with increased use of the ASF by 

zones, there is expected to be a decline 

in the number of expansion applications 

as well as a shift from the submission 

of more complex subzone applications 

to applications for production authority. 

The combined effect of the changes 

pertaining to production activity and to 

the ASF is expected to result in an even 

more significant reduction in 

application burden. The annual number 

of expansion applications should 

decline by half, from 20 to 10, reducing 

the annual burden from 2,100 to 1,050 

hours. While the overall number of 

production applications is anticipated 

to increase (from 27 to 29 per year) 

despite the elimination of the need for 

advance approval in certain 

circumstances, this largely reflects the 

shift from subzone to production 

applications, and the number of 

complex subzone applications is 

expected to decline. The application for 

production authority is a simpler 

process and involves notably fewer 

burden hours than a subzone 

application. As a result, the combined 

annual burden for subzone and 

production requests is expected to 

decline from 4,098 to 2,681 hours. In 

total, the annual FTZ application 

burden through the provisions proposed 

in this rule would be reduced from 

6,651 to 4,184 hours. 

Public comment is sought regarding: 

Whether this proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information shall have practical utility; 

the accuracy of the burden estimate; 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and ways to minimize the 

burden of the collection of information, 

including through the use of automated 

collection techniques or other forms of 

information technology. Send comments 

on these or any other aspects of the 

collection of information to the contact 

listed in ADDRESSES above, and e-mail to 

Wendy Liberante (Wendy_L._Liberante@

omb.eop.gov). 

Notwithstanding any other provision 

of the law, no person is required to 

respond to, nor shall any person be 

subject to a penalty for failure to comply 

with, a collection of information subject 

to the requirements of the PRA, unless 

that collection of information displays a 

currently valid OMB Control Number. 

List of Subjects in 15 CFR Part 400 

Administrative practice and 

procedure, Confidential business 

information, Customs duties and 

inspection, Foreign-trade zones, 

Harbors, Imports, Reporting and 

recordkeeping requirements. 

For the reasons set out in the 

preamble, it is proposed to revise 15 

CFR part 400 as follows: 

PART 400—REGULATIONS OF THE 

FOREIGN-TRADE ZONES BOARD 

Subpart A—Scope, Definitions and 

Authority 

400.1 Scope. 

400.2 Definitions. 

400.3 Authority of the Board. 

400.4 Authority and responsibilities of the 

Executive Secretary. 

400.5 Authority to restrict or prohibit 

certain zone operations. 

400.6 Board headquarters. 

Subpart B—Ability To Establish Zone; 

Limitations and Restrictions on Authority 

Granted 

400.11 Number and location of zones and 

subzones. 

400.12 Eligible applicants. 

400.13 General conditions, prohibitions 

and restrictions applicable to grants of 

authority. 

400.14 Production—activity requiring 

approval or reporting; restrictions. 

400.15 Production equipment. 

400.16 Exemption from state and local ad 

valorem taxation of tangible personal 

property. 

Subpart C—Applications To Establish and 

Modify Authority 

400.21 Application for zone. 

400.22 Application for production or 

subzone authority. 

400.23 Application for expansion or other 

modification to zone project. 

400.24 Criteria for evaluation of zone 

proposals or expansion or other 

modifications to zone projects. 

400.25 Criteria for evaluation of production 

and subzone proposals. 

400.26 Burden of proof. 

400.27 Application fees. 

Subpart D—Procedures for Application 

Evaluation and Reviews 

400.31 General application provisions and 

pre-docketing review. 

400.32 Procedure for docketing application 

and commencement of case review. 

400.33 Examiner’s review—case not 

involving production activity. 

400.34 Examiner’s review—case involving 

production activity. 

400.35 Completion of case review. 

400.36 Procedure for application for minor 

modification of zone project. 

400.37 Procedure for notification and 

review of production changes. 

400.38 Monitoring and reviews of zone 

operations and activity. 

Subpart E—Operation of Zones and 

Administrative Requirements 

400.41 Operation of zones; general. 

400.42 Operation as public utility. 

400.43 Uniform treatment. 

400.44 Requirements for commencement of 

operations in a zone project. 

400.45 Zone schedule. 

400.46 Complaints related to public utility 

and uniform treatment. 

400.47 Grantee liability. 

400.48 Retail trade. 

400.49 Zone-restricted merchandise. 

Subpart F—Records, Reports, Notice, 

Hearings and Information 

400.51 Accounts, records and reports. 

400.52 Notice and hearings. 

400.53 Official record; public access. 

400.54 Information. 

Subpart G—Penalties, Prior Disclosure and 

Appeals to the Board 

400.61 Revocation of grants of authority. 

400.62 Fines, penalties and instructions to 

suspend activated status. 

400.63 Prior disclosure. 

400.64 Appeals to the Board of decisions 

of the Assistant Secretary for Import 

Administration and the Executive 

Secretary. 

Authority: Foreign-Trade Zones Act of 

June 18, 1934, as amended (Pub. L. 397, 73rd 


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Congress, 48 Stat. 998–1003 (19 U.S.C. 81a– 

81u)). 

Subpart A—Scope, Definitions and 

Authority 

§ 400.1 Scope. 

(a) This part sets forth the regulations, 

including the rules of practice and 

procedure, of the Foreign-Trade Zones 

Board with regard to foreign-trade zones 

(FTZs or zones) in the United States 

pursuant to the Foreign-Trade Zones 

Act of 1934, as amended (19 U.S.C. 81a– 

81u). It includes the substantive and 

procedural rules for the authorization of 

zones and the regulation of zone 

activity. The purpose of zones as stated 

in the Act is to ‘‘expedite and encourage 

foreign commerce, and other purposes.’’ 

The 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. 

(b) Part 146 of the customs regulations 

(19 CFR part 146) governs zone 

operations, including the admission of 

merchandise into zones, zone activity 

involving such merchandise, and the 

transfer of merchandise from zones. 

(c) To the extent ‘‘activated’’ under 

U.S. Customs and Border Protection 

(CBP) procedures in 19 CFR part 146, 

and only for the purposes specified in 

the Act (19 U.S.C. 81c), zones are 

treated for purposes of the tariff laws 

and customs entry procedures as being 

outside the customs territory of the 

United States. Under zone procedures, 

foreign and domestic merchandise may 

be admitted into zones for operations 

such as storage, exhibition, assembly, 

manufacture and processing, without 

being subject to formal customs entry 

procedures and payment of duties, 

unless and until the foreign 

merchandise enters customs territory for 

domestic consumption. At that time, the 

importer ordinarily has a choice of 

paying duties either at the rate 

applicable to the foreign material in its 

condition as admitted into a zone, or if 

used in production activity, to the 

emerging product. Quota restrictions do 

not normally apply to foreign goods in 

zones. The Board can deny or limit the 

use of zone procedures in specific cases 

on public interest grounds. Merchandise 

moved into zones for export (zonerestricted status) may be considered 

exported for purposes such as federal 

excise tax rebates and customs 

drawback. Foreign merchandise 

(tangible personal property) admitted to 

a zone and domestic merchandise held 

in a zone for exportation are exempt 

from certain state and local ad valorem 

taxes (19 U.S.C. 81o(e)). Articles 

admitted into zones for purposes not 

specified in the Act shall be subject to 

the tariff laws and regular entry 

procedures, including the payment of 

applicable duties, taxes, and fees. 

§ 400.2 Definitions. 

(a) Act means the Foreign-Trade 

Zones Act of 1934, as amended (19 

U.S.C. 81a–81u). 

(b) Agent means a person (as defined 

in § 400.2(h)) acting on behalf of or 

under agreement with the zone grantee 

in zone-related matters. 

(c) Board means the Foreign-Trade 

Zones Board, which consists of the 

Secretary of the Department of 

Commerce (chairman) and the Secretary 

of the Treasury, or their designated 

alternates. 

(d) CBP means U.S. Customs and 

Border Protection. 

(e) Executive Secretary is the 

Executive Secretary of the ForeignTrade Zones Board. 

(f) Foreign-trade zone (FTZ or zone) is 

a restricted-access site, in or adjacent (as 

defined by § 400.11(b)(2)) to a CBP port 

of entry, operated pursuant to public 

utility principles under the sponsorship 

of a corporation granted authority by the 

Board and under the supervision of 

CBP. 

(g) Grant of authority is a document 

issued by the Board that authorizes a 

zone grantee to establish, operate and 

maintain a zone project or a subzone, 

subject to limitations and conditions 

specified in this part and in 19 CFR part 

146. The authority to establish a zone 

includes the authority to operate and 

the responsibility to maintain it. 

(h) Person includes any individual, 

enterprise, or entity. 

(i) Port Director is normally the 

director of CBP for the CBP 

jurisdictional area in which the zone is 

located. 

(j) Port of entry means a port of entry 

in the United States, as defined by part 

101 of the customs regulations (19 CFR 

part 101), or a user fee airport 

authorized under 19 U.S.C. 58b and 

listed in part 122 of the customs 

regulations (19 CFR part 122). 

(k) Private corporation means any 

corporation, other than a public 

corporation, which is organized for the 

purpose of establishing a zone project 

and which is chartered for this purpose 

under a law of the state in which the 

zone is located. 

(l) Production, as used in this part, 

means any activity which results in a 

change in the customs classification of 

an article or in its eligibility for entry for 

consumption, regardless of whether U.S. 

customs entry actually is ultimately 

made on the article resulting from the 

production activity. 

(m) Public corporation means a state, 

a political subdivision (including a 

municipality) or public agency thereof, 

or a corporate municipal 

instrumentality of one or more states. 

(n) Site is one or more parcels of land 

organized as an entity, such as all or 

part of an industrial park or airport 

facility. 

(o) State includes any state of the 

United States, the District of Columbia, 

and Puerto Rico. 

(p) Subzone means a special-purpose 

zone established as an adjunct to a zone 

project for a limited purpose. 

(q) Zone means a foreign-trade zone 

established under the provisions of the 

Act and these regulations. Where used 

in this part, the term also includes 

subzones, unless the context indicates 

otherwise. 

(r) Zone grantee is the corporate 

recipient of a grant of authority for a 

zone project. Where used in this part, 

the term ‘‘grantee’’ means ‘‘zone grantee’’ 

unless otherwise indicated. 

(s) Zone operator is a person that 

operates within a zone or subzone under 

the terms of an agreement with the zone 

grantee, with the concurrence of the 

Port Director. 

(t) Zone participant is a zone operator, 

zone user, property owner, or other 

person participating or seeking to 

participate in some manner in, or to 

make use of, the zone project. 

(u) Zone project means the zone plan, 

including all of the zone and subzone 

sites that the Board authorizes a single 

grantee to establish. 

(v) Zone site means a physical 

location of a zone or subzone. 

(w) Zone user is a party using a zone 

under agreement with the zone grantee 

or a zone operator. 

§ 400.3 Authority of the Board. 

(a) In general. In accordance with the 

Act and procedures of this part, the 

Board has authority to: 

(1) Prescribe rules and regulations 

concerning zones; 

(2) Issue grants of authority for zones 

and subzones, and approve 

modifications to the original zone 

project; 

(3) Approve production activity in 

zones and subzones as described in this 

part; 

(4) Make determinations on matters 

requiring Board decisions under this 

part; 

(5) Decide appeals in regard to certain 

decisions of the Commerce 

Department’s Assistant Secretary for 

Import Administration or the Executive 

Secretary; 


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82348 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Proposed Rules 

(6) Inspect the premises, operations 

and accounts of zone grantees and 

operators; 

(7) Require zone grantees to report on 

zone operations; 

(8) Report annually to the Congress on 

zone operations; 

(9) Restrict or prohibit zone 

operations; 

(10) Terminate reviews of 

applications under certain 

circumstances pursuant to § 400.35(d); 

(11) Authorize under certain 

circumstances the return of ‘‘zonerestricted merchandise’’ for entry into 

customs territory under § 400.49; 

(12) Impose fines for violations of the 

Act and this part; 

(13) Instruct CBP to suspend activated 

status pursuant to § 400.62(i); 

(14) Revoke grants of authority for 

cause; and, 

(15) Determine, as appropriate, 

whether zone activity is or would be in 

the public interest or detrimental to the 

public interest. 

(b) Authority of the Chairman of the 

Board. The Chairman of the Board 

(Secretary of the Department of 

Commerce) has the authority to: 

(1) Appoint the Executive Secretary of 

the Board; 

(2) Call meetings of the Board, with 

reasonable notice given to each member; 

and, 

(3) Submit to the Congress the Board’s 

annual report as prepared by the 

Executive Secretary. 

(c) Alternates. Each member of the 

Board will designate an alternate with 

authority to act in an official capacity 

for that member. 

(d) Authority of the Assistant 

Secretary for Import Administration 

(Alternate Chairman). The Commerce 

Department’s Assistant Secretary for 

Import Administration has the authority 

to: 

(1) Make determinations pursuant to 

§ 400.14(d); 

(2) Terminate reviews of applications 

under certain circumstances pursuant to 

§ 400.35(d); 

(3) Mitigate and assess fines pursuant 

to §§ 400.62(f) and (g) and instruct CBP 

to suspend activated status pursuant to 

§ 400.62(i); and, 

(4) Restrict the use of zone procedures 

under certain circumstances pursuant to 

§§ 400.14(e) and 400.38(c). 

(e) Determinations of the Board. (1) 

The determination of the Board will be 

based on the unanimous vote of the 

members (or alternate members) of the 

Board. 

(2) All votes will be recorded. 

(3) The Board will issue its 

determination in proceedings under the 

regulations in the form of a Board order. 

§ 400.4 Authority and responsibilities of 

the Executive Secretary. 

The Executive Secretary has the 

following responsibilities and authority: 

(a) Represent the Board in 

administrative, regulatory, operational, 

and public affairs matters; 

(b) Serve as director of the Commerce 

Department’s Foreign-Trade Zones staff; 

(c) Execute and implement orders of 

the Board; 

(d) Arrange meetings and direct 

circulation of action documents for the 

Board; 

(e) Arrange with other sections of the 

Department of Commerce and other 

governmental agencies for studies and 

comments on zone issues and proposals; 

(f) Maintain custody of the seal, 

records, files and correspondence of the 

Board, with disposition subject to the 

regulations of the Department of 

Commerce; 

(g) Issue notices on zone matters for 

publication in the Federal Register; 

(h) Direct processing of applications 

and reviews, including designation of 

examiners and scheduling of hearings, 

under various sections of this part; 

(i) Determine subzone sponsorship 

questions as provided in § 400.12(d); 

(j) Make recommendations in cases 

involving questions as to whether zone 

activity should be prohibited or 

restricted for public interest reasons, 

including reviews under § 400.5; 

(k) Determine questions of scope 

under § 400.14(f); 

(l) Determine whether additional 

information is needed for evaluation of 

applications and other requests for 

decisions under this part, as provided 

for in various sections of this part, 

including §§ 400.21, 400.22, and 400.23; 

(m) Issue instructions, guidelines, 

forms and related documents specifying 

time, place, manner and formats for 

applications as provided in § 400.21(b); 

(n) Determine whether proposed 

modifications involve major changes 

under § 400.23(a)(2); 

(o) Determine whether applications 

meet pre-docketing requirements under 

§ 400.31(b); 

(p) Terminate reviews of applications 

under certain circumstances pursuant to 

§ 400.35(d); 

(q) Authorize minor modifications to 

zone projects under § 400.36; 

(r) Review production changes under 

§ 400.37; 

(s) Direct monitoring and reviews of 

zone operations and activity under 

§ 400.38; 

(t) Accept rate schedules and 

determine their sufficiency under 

§ 400.45(e); 

(u) Assess potential issues and make 

determinations pertaining to uniform 

treatment under § 400.43 and review 

and decide complaint cases under 

§ 400.46; 

(v) Make certain determinations and 

authorizations pertaining to retail trade 

under § 400.48; 

(w) Authorize under certain 

circumstances the return of ‘‘zonerestricted merchandise’’ for entry into 

customs territory under § 400.49; 

(x) Determine the format and 

deadlines for the annual reports of zone 

grantees to the Board and direct 

preparation of an annual report to 

Congress from the Board under 

§ 400.51(d); 

(y) Make recommendations and 

certain determinations regarding 

violations and fines, and undertake 

certain procedures related to the 

suspension of activated status, as 

provided in § 400.62; and, 

(z) Designate an acting Executive 

Secretary. 

§ 400.5 Authority to restrict or prohibit 

certain zone operations. 

(a) In general. After review, the Board 

may restrict or prohibit any admission 

of merchandise into a zone project or 

any operation in a zone project when it 

determines that such activity is 

detrimental to the public interest, health 

or safety. 

(b) Initiation of review. The Board 

may conduct a proceeding, or the 

Executive Secretary a review, to 

consider a restriction or prohibition 

under paragraph (a) of this section 

either self-initiated, or in response to a 

complaint made to the Board by a party 

directly affected by the activity in 

question and showing good cause. 

§ 400.6 Board headquarters. 

The headquarters of the Board is 

located within the U.S. Department of 

Commerce (Herbert C. Hoover Building), 

1401 Constitution Avenue, NW., 

Washington, DC 20230, within the office 

of the Foreign-Trade Zones staff. 

Subpart B—Ability To Establish Zone; 

Limitations and Restrictions on 

Authority Granted 

§ 400.11 Number and location of zones 

and subzones. 

(a) Number of zone projects-port of 

entry entitlement. 

(1) Provided that the other 

requirements of this part are met: 

(i) Each port of entry is entitled to at 

least one zone project; 

(ii) If a port of entry is located in more 

than one state, each of the states in 

which the port of entry is located is 

entitled to a zone project; and, 

(iii) If a port of entry is defined to 

include more than one city separated by 


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a navigable waterway, each of the cities 

is entitled to a zone project. 

(2) Applications pertaining to zone 

projects in addition to those approved 

under the entitlement provision of 

paragraph (a)(1) of this section may be 

approved by the Board if it determines 

that the existing project(s) will not 

adequately serve the convenience of 

commerce. 

(b) Location of zones and subzonesport of entry adjacency requirements. 

(1) The Act provides that the Board 

may approve ‘‘zones in or adjacent to 

ports of entry’’ (19 U.S.C. 81b). 

(2) The ‘‘adjacency’’ requirement is 

satisfied if: 

(i) A general-purpose zone site is 

located within 60 statute miles or 90 

minutes’ driving time (as measured by 

the Port Director) from the outer limits 

of a port of entry. 

(ii) A subzone meets the following 

requirements relating to CBP 

supervision: 

(A) Proper CBP oversight can be 

accomplished with physical and 

electronic means; and, 

(B) All electronically produced 

records are maintained in a format 

compatible with the requirements of 

CBP for the duration of the record 

period; and, 

(C) The grantee/operator agrees to 

present merchandise for examination at 

a CBP site selected by CBP when 

requested, and further agrees to present 

all necessary documents directly to the 

CBP oversight office. 

§ 400.12 Eligible applicants. 

(a) In general. Subject to the other 

provisions of this section, public or 

private corporations may apply for a 

grant of authority to establish a zone 

project. The Board will give preference 

to public corporations. 

(b) Public corporations and private 

non-profit corporations. The eligibility 

of public corporations and private nonprofit corporations to apply for a grant 

of authority shall be supported by 

enabling legislation of the legislature of 

the state in which the zone is to be 

located, indicating that the corporation, 

individually or as part of a class, is 

authorized to so apply. Any application 

must also be consistent with the charter 

or organizational papers of the applying 

entity. 

(c) Private for-profit corporations. The 

eligibility of private for-profit 

corporations to apply for a grant of 

authority shall be supported by a special 

act of the state legislature naming the 

applicant corporation and by evidence 

indicating that the corporation is 

chartered for the purpose of establishing 

a zone. 

(d) Applicants for subzones- 

(1) Eligibility. The following entities 

are eligible to apply for a grant of 

authority to establish a subzone: 

(i) The zone grantee of the closest 

zone project in the same state; 

(ii) The zone grantee of another zone 

in the same state, which is a public 

corporation (or a non-public corporation 

if no such other public corporation 

exists), if the Board, or the Executive 

Secretary, finds that such sponsorship 

better serves the public interest; or, 

(iii) A state agency specifically 

authorized to submit such an 

application by an act of the state 

legislature. 

(2) Notification of closest grantee. If 

an application is submitted under 

paragraph (d)(1)(ii) or (iii) of this 

section, the Executive Secretary will: 

(i) Notify, in writing, the grantee 

specified in paragraph (d)(1)(i) of this 

section, who may, within 30 days, 

object to such sponsorship, in writing, 

with supporting information as to why 

the public interest would be better 

served by its acting as sponsor; 

(ii) Review such objections prior to 

docketing the application to determine 

whether the proposed sponsorship is in 

the public interest, taking into account: 

(A) The complaining zone’s structure 

and operation; 

(B) The views of State and local 

public agencies; and, 

(C) The views of the proposed 

subzone operator; 

(iii) Notify the applicant and 

complainants in writing of the 

Executive Secretary’s determination; 

(iv) If the Executive Secretary 

determines that the proposed 

sponsorship is in the public interest, 

docket the application (see § 400.64 

regarding appeals of decisions of the 

Executive Secretary). 

§ 400.13 General conditions, prohibitions 

and restrictions applicable to grants of 

authority. 

(a) In general. Grants of authority 

issued by the Board for the 

establishment of zones or subzones, 

including those already issued, are 

subject to the Act and this part and the 

following general conditions or 

limitations: 

(1) Approvals from the grantee and 

the Port Director, pursuant to 19 CFR 

part 146, are required prior to the 

activation of any portion of an approved 

zone project. 

(2) Prior to activation of a zone, the 

zone grantee or operator shall obtain all 

necessary permits from federal, state 

and local authorities, and except as 

otherwise specified in the Act or this 

part, shall comply with the 

requirements of those authorities. 

(3) A grant of authority for a zone or 

a subzone shall lapse unless the zone 

project (in case of subzones, the subzone 

facility) is activated, pursuant to 19 CFR 

part 146, and in operation not later than 

five years from the Board order 

authorizing the zone or subzone. 

(4) A grant of authority approved 

under this part includes authority for 

the grantee to permit the erection of 

buildings necessary to carry out the 

approved zone project subject to 

concurrence of the Port Director. 

(5) Zone grantees, operators, and users 

shall permit federal government officials 

acting in an official capacity to have 

access to the zone project and records 

during normal business hours and 

under other reasonable circumstances. 

(6) Activity involving production is 

subject to the specific provisions in 

§ 400.14. 

(7) A grant of authority may not be 

sold, conveyed, transferred, set over, or 

assigned (FTZ Act, section 17; 19 U.S.C. 

81q). 

(8) Private ownership of zone land 

and facilities is permitted provided the 

zone grantee retains the control 

necessary to implement the approved 

zone project. Such permission shall not 

constitute a vested right to zone 

designation, nor interfere with the 

Board’s regulation of the grantee or the 

permittee, nor interfere with or 

complicate the revocation of the grant 

by the Board. Should title to land or 

facilities be transferred after a grant of 

authority is issued, the zone grantee 

must retain, by agreement with the new 

owner, a level of control which allows 

the grantee to carry out its 

responsibilities as grantee. The sale of a 

zone site or facility for more than its fair 

market value without zone status could, 

depending on the circumstances, be 

subject to the prohibitions set forth in 

section 17 of the Act. 

(b) Board authority to restrict or 

prohibit activity. Pursuant to section 

15(c) of the Act (19 U.S.C. 81o(c)), the 

Board has authority to restrict or 

prohibit zone activity ‘‘that in its 

judgment is detrimental to the public 

interest.’’ In approvals of the 

applications for zone or subzone 

production authority required by 

§ 400.14(a), the Board may adopt 

restrictions to protect the public 

interest, health, or safety. The 

Commerce Department’s Assistant 

Secretary for Import Administration 

may similarly adopt restrictions in 

exercising authority under §§ 400.14(d) 

and (e). When evaluating zone or 

subzone production activity, either as 

proposed in an application or as part of 

a review of an ongoing operation, the 

Board shall determine whether the 


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activity is in the public interest by 

reviewing it in relation to the evaluation 

criteria contained in § 400.25. 

(c) Additional conditions, 

prohibitions and restrictions. Other 

conditions/requirements, prohibitions 

and restrictions under Federal, State or 

local law may apply to the zone or 

subzone authorized by the grant of 

authority. 

§ 400.14 Production—activity requiring 

approval or reporting; restrictions. 

(a) Activity requiring advance 

approval. Approval in advance by the 

Board (or notification to the Board 

under the circumstances described in 

§ 400.37) is required for all production 

activity in zones or subzones which 

involves: 

(1) A foreign article for which the 

actual or effective duty rate for U.S. 

entries will be reduced through 

incorporation into a different product or 

article (inverted tariff); 

(2) A foreign article that would be 

subject (if it were to enter U.S. customs 

territory) to an antidumping duty (AD) 

or countervailing duty (CVD) order or 

which would be otherwise subject to 

suspension of liquidation under AD/ 

CVD procedures, to an order of the 

International Trade Commission 

pursuant to 19 U.S.C. 1337 (Section 

337), or to a quantitative import control 

(quota); 

(3) Duty avoidance on scrap or waste 

resulting from the production activity 

(except for production activity that is for 

export only); or, 

(4) For a production operation that 

had been the subject of prior Board 

consideration and approval (including 

delegated authority), a foreign article: 

(i) For which there is a new (or 

increased) inverted tariff due to a new 

(or increased rate of) general or special 

duty relative to the circumstances in 

effect at the time of the Board’s prior 

consideration of the foreign article’s use 

in the production operation; 

(ii) Which is subject (were it to enter 

U.S. customs territory) to an AD/CVD 

duty or suspension of liquidation under 

AD/CVD orders that were not in effect 

at the time of the Board’s prior 

consideration of the foreign article’s use 

in the production operation; or, 

(iii) Which is subject (were it to enter 

U.S. customs territory) to a Section 337 

order that was not in effect at the time 

of the Board’s prior consideration of the 

foreign article’s use in the production 

operation. 

(b) Activity requiring reporting. All 

production activity in zones or subzones 

must be reported to the Board annually 

in accordance with any instructions, 

guidelines, forms and related 

documents specifying time, place, 

manner and format(s) established by the 

Executive Secretary pursuant to 

§ 400.51(d)(1). 

(c) Scope of approved authority. The 

Board’s approval of production 

authority for a particular operation is 

limited to the inputs, finished products, 

and production capacity presented in 

the approved application pursuant to 

§ 400.22(a) (or for which notification has 

been made to the Board pursuant to 

§ 400.14(e)). If a grantee, operator or 

user is uncertain of whether activity 

falls within the scope of activity 

approved by the Board, the grantee, 

operator or user may request a scope 

determination pursuant to § 400.14(f). 

Applications for expanded production 

authority shall meet the requirements of 

§ 400.22 and shall be processed 

pursuant to §§ 400.31–32 and 400.34–35 

(or § 400.14(d), where applicable). 

Activity conducted without required 

authority from the Board could be 

subject to penalties pursuant to 

§ 400.62. 

(d) Delegation to Assistant Secretary 

for Import Administration. The 

Commerce Department’s Assistant 

Secretary for Import Administration 

may make determinations in cases 

requiring production authority, based 

upon a review by the Board staff and the 

recommendation of the Executive 

Secretary, when: 

(1) The Port Director determines that 

the proposed production activity could 

otherwise be conducted under CBP 

bonded procedures; 

(2) The sole zone benefit requiring 

advance approval from the Board is for 

scrap or waste resulting from the 

production activity; or, 

(3) The Assistant Secretary for Import 

Administration’s determination will 

only be on an interim basis, in response 

to a request from the applicant, to 

enable some or all of the activity in 

question to commence until the Board is 

able to complete action pursuant to 

§ 400.35. Interim authority may only be 

approved after the close of the period 

for public comment for the application 

in question based on a recommendation 

from the Executive Secretary, which 

will take into account the factors in 

§ 400.25, any public comments received, 

and any other relevant considerations. 

Any request for interim authority must 

provide a public interest-based 

justification and a full explanation of 

the need for such interim authority, and 

must include both a realistic projected 

timeframe for commencement of the 

proposed activity and written 

concurrence from the CBP port director 

that specifically addresses the 

applicant’s projected timeframe. Interim 

authority, once approved, will remain at 

the discretion of the Assistant Secretary 

for Import Administration until the 

Board has acted and is subject to 

modification or rescission for cause 

during the interim period. 

(e) Production changes and capacity 

increases. 

(1) Production changes. Where 

advance approval is required under 

§ 400.14(a), an applicant requesting 

production authority from the Board (or 

with existing production authority from 

the Board) may also request authority to 

notify the Board on a quarterly 

retrospective basis of production 

changes involving new finished 

products or foreign components/inputs 

resulting in inverted tariff or scrap 

benefits. Foreign articles subject (were 

they to enter U.S. customs territory) to 

AD or CVD orders or which would be 

otherwise subject to suspension of 

liquidation under AD/CVD procedures, 

to an order of the International Trade 

Commission pursuant to Section 337, to 

any ongoing AD/CVD or Section 337 

proceeding, or to quantitative import 

controls (quotas) are not eligible for the 

production change notification 

procedure. § 400.37 delineates 

applicable criteria and procedures for 

requests for authority to utilize the 

production change notification 

provision and, where such authority has 

been approved, for subsequent 

notifications to the Board. 

(2) Capacity increases. For a 

production operation approved by the 

FTZ Board, the operator shall notify the 

Board of any increases in production 

capacity (§ 400.22(a)(3)(vii)) relative to 

the capacity level approved by the 

Board (or for which notification was 

previously submitted to the Board 

pursuant to this paragraph) no later than 

the end of the calendar quarter during 

which the capacity increase becomes 

effective. The notification shall name 

the zone or subzone operation for which 

the notification is occurring and address 

the impact of the notified change(s) on 

the elements in §§ 400.22(a)(3)(v), (vi) 

and (vii) relative to the most recent prior 

Board approval (or notification pursuant 

to this paragraph) for the production 

operation in question. The Executive 

Secretary shall establish any guideline 

or format necessary to implement this 

paragraph, and may request additional 

information as needed. Upon 

notification of an increase in capacity 

pursuant to this paragraph, the 

Executive Secretary within 45 days will 

conduct a preliminary analysis of the 

increase in relation to the approved (or 

previously notified) capacity level for 

the production operation in question, 

taking into account the factors 


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enumerated in § 400.25(a)(2) as 

appropriate, and determine whether 

further review is necessary to ensure 

that activity involved in these situations 

continues to be in the public interest. 

The procedures of §§ 400.32 and 400.34 

shall be used in these situations when 

appropriate. 

(3) The Commerce Department’s 

Assistant Secretary for Import 

Administration may, based on public 

interest grounds, order the prohibition 

or restriction of the use of zone 

procedures in regard to a production 

change or capacity increase notified 

pursuant to §§ 400.14(e)(1) and (2), 

including requiring that items be placed 

in privileged foreign status (19 CFR 

146.41) upon admission to a zone or 

subzone. Any party so ordered shall 

comply or potentially be subject to 

actions that could include penalties 

pursuant to § 400.62(b). Such a 

prohibition or restriction on the use of 

zone procedures in regard to the 

production change or capacity increase 

may occur, depending on the 

circumstances, either after further 

review of the production change or 

capacity increase or, where warranted 

by the circumstances, prior to the 

conduct of further review in order to 

avoid or mitigate potential or ongoing 

negative effects during the pendency of 

the further review. 

(f) Scope determinations. 

Determinations may be made by the 

Executive Secretary as to whether 

changes in activity are within the scope 

of related activity already approved for 

the facility involved under this part. 

When warranted, the procedures of 

§§ 400.32 and 400.34 will be followed. 

(g) Restrictions on items subject to 

antidumping and countervailing duty 

actions. 

(1) Board policy. Zone procedures 

shall not be used to circumvent 

antidumping duty (AD) and 

countervailing duty (CVD) actions under 

19 CFR part 351. 

(2) Admission of items subject to AD/ 

CVD actions. Items subject to AD/CVD 

orders or items which would be 

otherwise subject to suspension of 

liquidation under AD/CVD procedures 

if they entered U.S. customs territory, 

shall be placed in privileged foreign 

status (19 CFR 146.41) upon admission 

to a zone or subzone. Upon entry for 

consumption, such items shall be 

subject to duties under AD/CVD orders 

or to suspension of liquidation, as 

appropriate, under 19 CFR part 351. 

§ 400.15 Production equipment. 

(a) In general. Pursuant to § 81c(e) of 

the FTZ Act, merchandise that is 

admitted into a foreign-trade zone for 

use within such zone as production 

equipment or as parts for such 

equipment, shall not be subject to duty 

until such merchandise is completely 

assembled, installed, tested, and used in 

the production for which it was 

admitted. Payment of duty may be 

deferred until such equipment goes into 

use as production equipment as part of 

zone production activity, at which time 

the equipment shall be entered for 

consumption as completed equipment. 

(b) Definition of production 

equipment. Eligibility for this section is 

limited to equipment and parts of 

equipment destined for use in zone 

production activity as defined in 

§ 400.2(l) of this part. Ineligible for 

treatment as production equipment 

under this section are general materials 

(that are used in the installation of 

production equipment or in the 

assembly of equipment) and materials 

used in the construction or modification 

of the plant that houses the production 

equipment. 

(c) Production equipment not 

destined for zone activity. Production 

equipment or parts that are not destined 

for use in zone production activity shall 

be treated as normal merchandise 

eligible for standard zone-related 

benefits (i.e., benefits not subject to the 

requirements of § 400.14(a)), provided 

the equipment is entered for 

consumption or exported prior to its 

use. 

§ 400.16 Exemption from state and local 

ad valorem taxation of tangible personal 

property. 

Foreign merchandise (tangible 

personal property) admitted to a zone 

and domestic merchandise held in a 

zone for exportation are exempt from 

state and local ad valorem taxation 

while such merchandise remains in the 

zone in zone status (19 U.S.C. 81o(e)). 

The exemption from such taxation is 

limited to tangible personal property 

imported from outside the United States 

and held in a zone for the purposes 

stated in 19 U.S.C. 81o(e), and tangible 

personal property produced in the 

United States and held in a zone for 

exportation, either in its original form or 

as altered by any of the processes stated 

in 19 U.S.C. 81o(e). 

Subpart C—Applications To Establish 

and Modify Authority 

§ 400.21 Application for zone. 

(a) In general. An application for a 

grant of authority to establish a zone 

project (including pursuant to the 

Alternative Site Framework procedures 

adopted by the Board; see 74 FR 1170, 

Jan. 12, 2009, 74 FR 3987, Jan. 22, 2009, 

and 75 FR 71069–71070, Nov. 22, 2010) 

shall consist of an application letter and 

contents to meet the requirements of 

this part. 

(b) Application format. Applications 

shall comply with any instructions, 

guidelines, and forms or related 

documents, published in the Federal 

Register and made available on the 

Board’s Internet site, as established by 

the Executive Secretary specific to the 

type of application in question. 

(c) Application letter. The application 

letter shall be currently dated and 

signed by an officer of the corporation 

authorized in the resolution for the 

application (see § 400.21(d)(1)(iii)). The 

application letter shall also describe: 

(1) How the proposal is consistent 

with the state enabling legislation and 

the grantee’s charter; 

(2) The type of authority requested 

from the Board; 

(3) The proposed zone site(s) and 

facility(ies) and the larger project of 

which the zone is a part; 

(4) The project background; 

(5) The relationship of the project to 

the community’s and state’s 

international trade-related goals and 

objectives; 

(6) Any production authority 

requested, where applicable; and, 

(7) Any additional pertinent 

information needed for a complete 

summary description of the proposal. 

(d) Detailed contents. 

(1) Legal Authority for the 

Application shall be documented with: 

(i) A current copy of the state enabling 

legislation described in §§ 400.12(b) and 

(c); 

(ii) A copy of the sections of the 

applicant’s charter or organization 

papers pertinent to foreign-trade zones; 

and, 

(iii) A certified copy of a recent 

resolution of the governing body of the 

corporation specific to the application 

authorizing the official signing the 

application letter. 

(2) Site Descriptions (including a table 

with site designations when more than 

one site is involved) shall be 

documented with: 

(i) A detailed description of the zone 

site, including size, location, and 

address (and legal description or its 

equivalent in instances where the 

Executive Secretary determines it is 

needed to supplement the maps in the 

application), as well as dimensions and 

types of existing and proposed 

structures, master planning, and 

timelines for construction of roads, 

utilities and planned buildings; 

(ii) Where applicable, a summary 

description of the larger project of 

which the site is a part, including type, 

size, location and address; 


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(iii) A statement as to whether the site 

is within or adjacent to a CBP port of 

entry (including distance from the limits 

of the port of entry and, if the distance 

exceeds 60 miles, driving time from the 

limits of the port of entry); 

(iv) A description of existing or 

proposed site qualifications, including 

appropriate land-use zoning (with 

environmentally sensitive areas 

avoided) and physical security; 

(v) A description of current and 

planned activities associated with the 

site; 

(vi) A summary description of 

transportation systems, facilities, and 

services, including connections from 

local and regional points of arrival to 

the zone; 

(vii) A statement regarding the 

environmental aspects of the proposal; 

(viii) The estimated time schedules 

for construction and activation; and, 

(ix) A statement as to the possibilities 

and plans for future expansion of the 

proposed zone site. 

(3) Operation and financing shall be 

documented with: 

(i) A statement as to site ownership (if 

not owned by the applicant or proposed 

operator, evidence as to their legal right 

to use the site); 

(ii) A discussion of plans for 

operations at the proposed site(s); 

(iii) A commitment to satisfy the 

requirements for CBP automated 

systems; and, 

(iv) A summary of the plans for 

financing the project. 

(4) Economic justification shall be 

documented with: 

(i) A statement of the community’s 

overall economic and trade-related goals 

and strategies in relation to those of the 

region and state, including a reference 

to the plan or plans on which the goals 

are based and how they relate to the 

zone project; 

(ii) An economic profile of the 

community including discussion of: 

(A) Dominant sectors in terms of 

percentage of employment or income; 

(B) Area strengths and weaknesses; 

(C) Unemployment rates; and, 

(D) Area foreign trade statistics; 

(iii) A statement as to the role and 

objective of the zone project and a 

discussion of the anticipated economic 

impact, direct and indirect, of the zone 

project, including references to public 

costs and benefits, employment, and 

U.S. international trade; 

(iv) A separate justification for each 

proposed site, including specific 

explanation addressing the degree to 

which each proposed site may be 

duplicative of types of facilities at other 

proposed or existing sites in the zone 

project; 

(v) A statement as to the need for zone 

services in the community, with specific 

expressions of interest from proposed 

zone users and letters of intent from 

those firms that are considered prime 

prospects for each specific proposed 

site; and, 

(vi) A description of proposed 

production operations, if applicable, 

with the information required in 

§ 400.22. 

(5) Maps and Blueprints shall be 

documented with: 

(i) State and county maps showing the 

general location of the proposed site(s) 

in terms of the area’s transportation 

network; 

(ii) For any proposed site, a local 

community map showing in red the 

location of the site; 

(iii) For any proposed site, a legible, 

detailed blueprint of the zone or 

subzone area showing zone boundaries 

in red, with dimensions, and showing 

existing and proposed structures; and, 

(iv) For proposals involving existing 

zones, one or more maps showing the 

relationship between existing zone sites 

and the proposed changes. 

(e) Additional information. The Board 

or the Executive Secretary may require 

additional information needed to 

adequately evaluate proposals. 

(f) Amendment of application. The 

Board or the Executive Secretary may 

allow amendment of the application. 

Amendments which substantively 

expand the scope of a request shall be 

subject to comment period requirements 

such as those of § 400.32(c)(2) with a 

minimum comment period of 30 days. 

(g) Drafts. Applicants are encouraged 

to submit a draft application to the 

Executive Secretary for review. A draft 

application must be complete with the 

possible exception of the application 

letter and/or resolution from the 

grantee. 

(h) Format and number of copies. 

Unless the Executive Secretary alters the 

requirements of this paragraph, submit 

an original (including original 

documents to meet the requirements of 

paragraphs (c) and (d)(1)(iii) of this 

section) and one copy of the application 

on 81⁄2′′ x 11′′ (216 x 279 mm) paper and 

one electronic copy. 

(i) Where to submit an application. 

Mailing address is: Executive Secretary, 

Foreign-Trade Zones Board, U.S. 

Department of Commerce, 1401 

Constitution Avenue, NW., Washington, 

DC 20230. Options for submission of 

electronic copies are described on the 

FTZ Board’s Internet site. 

§ 400.22 Application for production or 

subzone authority. 

(a) In general. In addition to any 

applicable requirements of § 400.21, an 

application involving proposed 

production authority under § 400.14(a) 

shall include: 

(1) A summary as to the reasons for 

the application and an explanation of its 

anticipated economic effects; 

(2) Identity of the user and its 

corporate affiliation; 

(3) A description of the proposed 

activity, including: 

(i) Products; 

(ii) Materials and components; 

(iii) For each product or material/ 

component, the tariff schedule category, 

tariff rate, other import requirements or 

restrictions, and whether the material/ 

component is subject to any 

antidumping or countervailing duty 

proceeding, a proceeding pursuant to 19 

U.S.C. 1337 (Section 337), or other 

trade-related proceeding(s) or issue(s); 

(iv) Domestic materials, foreign 

materials, and plant value added (as 

percentages of finished product value); 

(v) Projected shipments to domestic 

market and export market (percentages); 

(vi) Estimated total or range of annual 

value of benefits to proposed user 

(broken down by category), including as 

a percent of finished product value; 

(vii) Annual production capacity 

(current and planned) for the proposed 

FTZ activity, in units; 

viii) Information to assist the Board in 

making a determination under 

§§ 400.25(a)(1)(iii) and 400.25(a)(2); 

(ix) Information as to whether 

alternative procedures have been 

considered as a means of obtaining the 

benefits sought; 

(x) Information on the industry 

involved and extent of international 

competition; and, 

(xi) Economic impact of the operation 

on the area. 

(4) Information regarding any request 

for authority to submit notifications of 

future production changes pursuant to 

§ 400.37; and, 

(5) Any additional information 

requested by the Board or the Executive 

Secretary in order to conduct the 

review. 

(b) An application to establish a 

subzone as part of a proposed or 

existing zone shall be submitted in 

accordance with the requirements in 

§ 400.21, except that the focus of the 

information pursuant to § 400.21(d)(4) 

(Economic Justification) shall be on the 

specific activity involved and shall 

include: 

(1) A summary as to the reasons for 

the subzone and a detailed explanation 

of its anticipated economic effects; 

(2) Identity of the subzone user and its 

corporate affiliation; 

(3) A description of the proposed 

activity, including the information 


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required in §§ 400.22(a)(3)(i), (iv), (v), 

(vi), (x), (xi), and tariff schedule 

headings and duty rates for products; 

(4) For subzone applications 

involving requests for production 

authority, the information required in 

§ 400.22(a); 

(5) Reason operation cannot be 

conducted within a general-purpose 

zone; and, 

(6) Statement as to environmental 

impact. 

§ 400.23 Application for expansion or 

other modification to zone project. 

(a) In general. (1) A grantee may apply 

to the Board for authority to expand or 

otherwise modify its zone project 

(including pursuant to the Alternative 

Site Framework procedures adopted by 

the Board; see 74 FR 1170, Jan. 12, 2009, 

74 FR 3987, Jan. 22, 2009, and 75 FR 

71069–71070, Nov. 22, 2010). 

(2) The Executive Secretary, in 

consultation with the Port Director, will 

determine whether the proposed 

modification involves a major change in 

the zone plan and is thus subject to 

paragraph (b) of this section, or is minor 

and subject to paragraph (c) of this 

section. In making this determination 

the Executive Secretary will consider 

the extent to which the proposed 

modification would: 

(i) Substantially modify the plan 

originally approved by the Board; or, 

(ii) Expand the physical dimensions 

of the approved zone area as related to 

the scope of operations envisioned in 

the original plan. 

(b) Major modification to zone project. 

An application for a major modification 

to an approved zone project shall be 

submitted in accordance with the 

requirements of § 400.21, except that the 

content submitted pursuant to 

§ 400.21(d)(4) (Economic Justification) 

shall relate specifically to the proposed 

change. 

(c) Minor modification to zone 

project. Other applications or requests 

under this subpart, including those for 

minor revisions of general-purpose zone 

boundaries based on immediate need for 

zone use and of subzone boundaries 

where the scope of authorized 

production activity is not affected, shall 

be submitted in letter form with 

information and documentation 

necessary for analysis, as determined by 

the Executive Secretary, who shall 

determine whether the proposed change 

is a minor one subject to this paragraph 

(c) instead of paragraph (b) of this 

section (see, § 400.36). 

(d) Applications for other revisions to 

grants of authority. Applications or 

requests for revisions to grants of 

authority, such as modification of a 

restriction or reissuance of a grant of 

authority, shall be submitted in letter 

form with information and 

documentation necessary for analysis, 

as determined by the Executive 

Secretary. If the change involves 

removal or significant modification of a 

restriction included by the Board in a 

grant of authority or reissuance of a 

grant of authority, the review 

procedures of §§ 400.31–400.35 shall be 

followed, where relevant. If not, the 

procedure set forth in § 400.36 shall 

generally apply (although the Executive 

Secretary may elect to follow the 

procedures of §§ 400.31–400.35 when 

warranted). 

§ 400.24 Criteria for evaluation of zone 

proposals or expansion or other 

modifications to zone projects. 

The Board will consider the following 

factors in determining whether to issue 

a grant of authority for a zone project: 

(a) The need for zone services in the 

port of entry area, taking into account 

existing as well as projected 

international trade-related activities and 

employment impact; 

(b) The suitability of each proposed 

site and its facilities based on the plans 

presented for the site, including existing 

and planned buildings, zone-related 

activities, and the timeframe for 

development of the site; 

(c) The specific need and justification 

for each proposed site, taking into 

account existing sites and/or other 

proposed sites; 

(d) The extent of state and local 

government support, as indicated by the 

compatibility of the zone project with 

the community’s master plan or stated 

goals for economic development and the 

views of state and local public officials 

involved in economic development. 

Such officials shall avoid commitments 

that anticipate the outcome of Board 

decisions; 

(e) The views of persons likely to be 

affected by proposed zone activity; and, 

(f) If the proposal involves production 

activity, the criteria in § 400.25. 

§ 400.25 Criteria for evaluation of 

production and subzone proposals. 

(a) Production. The Board will apply 

the criteria delineated in § 400.25(a) in 

determining whether to authorize 

proposed production activity. The 

Board’s evaluation will take into 

account such factors as market 

conditions, price sensitivity, degree and 

nature of foreign competition, intraindustry and intra-firm trade, effect on 

exports and imports, and net effect on 

U.S. employment: 

(1) Threshold factors. It is the policy 

of the Board to authorize zone activity 

only when it is consistent with public 

policy and, in regard to activity 

involving foreign merchandise subject 

to quotas or inverted tariffs, when zone 

procedures are not the sole determining 

cause of imports. Thus, without 

undertaking a review of the economic 

factors enumerated in § 400.25(a)(2), the 

Board shall deny or restrict authority for 

proposed or ongoing activity if it 

determines that: 

(i) The activity is inconsistent with 

U.S. trade and tariff law, or policy 

which has been formally adopted by the 

Executive branch; 

(ii) Board approval of the activity 

under review would seriously prejudice 

U.S. tariff and trade negotiations or 

other initiatives; or, 

(iii) The activity involves items 

subject to quantitative import controls 

or inverted tariffs, and the use of zone 

procedures would be the direct and sole 

cause of imports that, but for such 

procedures, would not likely otherwise 

have occurred, taking into account 

imports both as individual items and as 

components of imported products. 

(2) Economic factors. After its review 

of threshold factors, if there is a basis for 

further consideration, the Board shall 

consider the following factors in 

determining the net economic effect of 

the proposed activity: 

(i) Overall employment impact; 

(ii) Exports and re-exports; 

(iii) Retention or creation of valueadded activity; 

(iv) Extent of value-added activity; 

(v) Overall effect on import levels of 

relevant products; 

(vi) Extent and nature of foreign 

competition in relevant products; 

(vii) Impact on related domestic 

industry, taking into account market 

conditions; and 

(viii) Other relevant information 

relating to the public interest and net 

economic impact considerations, 

including technology transfers and 

investment effects. 

(3) The significant public benefit(s) 

that would result from the production 

activity, taking into account the factors 

in paragraphs (a)(1) and (a)(2) of this 

section. 

(b) Subzones. In reviewing proposals 

for subzones, in addition to application 

of the factors delineated in § 400.25(a) 

where production activity is involved, 

the Board will also consider: 

(1) Whether the operation could be 

located in or otherwise accommodated 

by the multi-purpose facilities of the 

zone project serving the area; and, 

(2) The specific zone benefits sought 

and whether the proposed activity is in 

the public interest supported by 

evidence pursuant to §§ 400.22(b)(1) 

and (3). 


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(c) Contributory effect. In assessing 

the significance of the economic effect 

of the zone activity as part of the 

consideration of economic factors, and 

in consideration of whether there is a 

significant public benefit, the Board 

may consider the contributory effect 

zone savings have as an incremental 

part of cost effectiveness programs 

adopted by companies to improve their 

international competitiveness. 

§ 400.26 Burden of proof. 

(a) In general. An applicant must 

demonstrate to the Board that the 

proposal meets the criteria delineated in 

these regulations. Applicants seeking 

production-related authority shall 

submit evidence regarding the positive 

economic effect(s) and significant public 

benefit(s) that would result from the 

activity and may submit evidence and 

comments as to policy considerations. 

(b) Responses to evidence of negative 

effects. Applicants making submissions 

in response to comments received 

during the public comment period or 

pursuant to § 400.33(e)(1) or 

§ 400.34(a)(5)(iv)(A) should submit 

evidence that is probative and 

substantial in addressing the matter in 

issue. 

§ 400.27 Application fees. 

(a) In general. This section sets forth 

a uniform system of charges in the form 

of fees to recover some costs incurred by 

the Foreign-Trade Zones staff of the 

Department of Commerce in processing 

the applications listed in paragraph (b) 

of this section. The legal authority for 

the fees is 31 U.S.C. 9701, which 

provides for the collection of user fees 

by agencies of the Federal Government. 

(b) Uniform system of user fee 

charges. The following graduated fee 

schedule establishes fees for certain 

types of applications and requests for 

authority based on their average 

processing time. Applications 

combining requests for more than one 

type of approval are subject to the fee 

for each category. 

(1) Additional general-purpose zones 

(§ 400.21; § 400.11(a)(2))—$3,200 

(2) Special-purpose subzones 

(§ 400.22(b)): 

(i) Not involving production activity 

or less than three products—$4,000 

(ii) Production activity with three or 

more products—$6,500 

(3) Expansions (§ 400.23(b))—$1,600 

(c) Applications submitted to the 

Board shall include a currently dated 

check drawn on a national or state bank 

or trust company of the United States or 

Puerto Rico in the amount called for in 

paragraph (b) of this section. Uncertified 

checks must be acceptable for deposit 

by a Federal Reserve bank or branch. 

(d) Applicants shall make their checks 

payable to the U.S. Department of 

Commerce ITA. The checks will be 

deposited by ITA into the Treasury 

receipts account. If applications are 

found deficient under § 400.31(b), or 

withdrawn by applicants prior to formal 

docketing, refunds will be made. 

Subpart D—Procedures for Application 

Evaluation and Reviews 

§ 400.31 General application provisions 

and pre-docketing review. 

(a) In general. Sections 400.31–400.36 

outline the procedures followed in 

docketing and processing applications 

submitted under §§ 400.21–400.23. In 

addition, these sections set forth the 

time schedules which will normally be 

applied in processing applications. The 

schedules will provide guidance to 

applicants with respect to the time 

frames for each of the procedural steps 

involved in the Board’s review. Under 

these schedules, applications involving 

production activity would be processed 

within 1 year, and those not involving 

such activity, within 10 months. While 

the schedules set forth a standard time 

frame, the Board may determine that it 

requires additional time based on 

special circumstances, such as when the 

public comment period must be 

reopened pursuant to §§ 400.33(e)(2) 

and 400.34(a)(5)(iv)(B). 

(b) Pre-docketing review. The grantee 

shall submit a single complete copy of 

an application for pre-docketing review. 

(For requests relating to production in 

already approved zone or subzone 

space, the request may be submitted by 

the operator, provided a copy of the 

request is furnished at the same time to 

the grantee.) The Executive Secretary 

will determine whether the application 

satisfies the requirements of §§ 400.12, 

400.21, 400.22, 400.23, and other 

applicable provisions of this part such 

that the application is sufficient for 

docketing. If the pre-docketing copy of 

the application is deficient, the 

Executive Secretary will notify the 

applicant within 30 days of receipt of 

the pre-docketing copy, specifying the 

deficiencies. An affected zone 

participant may also be contacted 

regarding relevant application elements 

requiring additional information or 

clarification. If the applicant does not 

correct the deficiencies and submit a 

corrected pre-docketing application 

copy within 30 days of notification, the 

pre-docketing application (single copy) 

will be discarded. 

§ 400.32 Procedures for docketing 

application and case review. 

(a) Once the pre-docketing copy of the 

application is determined to be 

sufficient, the Executive Secretary will 

notify the applicant within 15 days so 

that the applicant may then submit the 

original and requisite number of copies 

(which shall be dated upon receipt at 

the headquarters of the Board) for 

docketing by the Board. For applications 

subject to § 400.27, the original shall be 

accompanied with a check in 

accordance with that section. 

(b) After the procedures described in 

paragraph (a) of this section, the 

Executive Secretary shall within 15 days 

of receipt of the original and required 

number of copies of the application: 

(1) Formally docket the application, 

thereby initiating the proceeding or 

review; 

(2) Assign a case docket number in 

cases requiring a Board order; and, 

(3) Notify the applicant of the formal 

docketing action. 

(c) After initiating a proceeding based 

on an application under §§ 400.21– 

400.22, or § 400.23(b), the Executive 

Secretary will: 

(1) Designate an examiner to conduct 

a review and prepare a report with 

recommendations for the Board; 

(2) Publish in the Federal Register a 

notice of the formal docketing of the 

application and initiation of the review 

which includes the name of the 

applicant, a description of the zone 

project, information as to any hearing 

scheduled at the outset, and an 

invitation for public comment. 

Normally, the comment period will 

close 60 days after the date the notice 

appears, except that, if a hearing is held 

(see § 400.52), the period will not close 

prior to 15 days after the date of the 

hearing. The closing date for general 

comment will ordinarily be followed by 

an additional 15-day period for rebuttal 

comments. All submissions of evidence, 

factual information, and written 

arguments by parties other than the 

applicant must be made during the 

comment period. A comment period 

may be opened or reopened for cause 

(for example, as a result of submission 

by the applicant of new factual 

information for which an opportunity 

for comment is warranted); 

(3) Transmit or otherwise make 

available copies of the docketing and 

initiation notice and the application to 

the Commissioner of CBP and the Port 

Director, or a designee of either; 

(4) Arrange for hearings, as 

appropriate; 

(5) Transmit the reports and 

recommendations of the examiner and 


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of the Port Director to the Board for 

appropriate action; and, 

(6) Notify the applicant in writing and 

publish notice in the Federal Register of 

the Board’s determination. 

(d) CBP review. The Port Director, or 

a designee, in accordance with CBP 

regulations and directives, will submit a 

report to the Executive Secretary within 

45 days of the conclusion of the public 

comment period described in paragraph 

(c)(2) of this section. 

§ 400.33 Examiner’s review—case not 

involving production activity. 

An examiner assigned to a case not 

involving production activity shall 

conduct a review taking into account 

the factors enumerated in § 400.24 and 

other appropriate sections of this part, 

which shall include: 

(a) Conducting or participating in 

necessary hearings scheduled by the 

Executive Secretary; 

(b) Reviewing case records, including 

public comments; 

(c) Requesting information and 

evidence from parties of record; 

(d) Developing information and 

evidence necessary for evaluation and 

analysis of the application in 

accordance with the criteria of the Act 

and this part; and, 

(e) Developing recommendations to 

the Board (and submitting a report to 

the Executive Secretary), generally 

within 120 days of the close of the 

period for public comment (see 

§ 400.32): 

(1) If the recommendations are 

unfavorable to the applicant, they shall 

be considered preliminary and the 

applicant shall be notified in writing 

(via electronic transmission where 

appropriate) of the preliminary 

recommendations and the factors 

considered in their development. The 

applicant shall be given 30 days from 

the date of notification in which to 

respond to the recommendations and 

submit additional evidence pertinent to 

the factors considered in the 

development of the preliminary 

recommendations. Public comment may 

be invited on preliminary 

recommendations when warranted. 

(2) If the response contains new 

evidence on which there has not been 

an opportunity for public comment, the 

Executive Secretary will publish notice 

in the Federal Register after completion 

of the review of the response. The new 

material will be made available for 

public inspection and the Federal 

Register notice will invite further public 

comment for a period of not less than 

30 days, with an additional 15-day 

period for rebuttal comments. 

(3) If the bases for an examiner’s 

recommendation(s) change based on 

new evidence, the procedures of 

§§ 400.33(e)(1) and (2) shall be followed, 

where applicable. 

(4) The CBP adviser shall be 

requested, when necessary, to provide 

further comments, which shall be 

submitted within 45 days after the 

request. 

§ 400.34 Examiner’s review—case 

involving production activity. 

(a) The examiner shall conduct a 

review taking into account the factors 

enumerated in this section, § 400.25, 

and other appropriate sections of this 

part, which shall include: 

(1) Conducting or participating in 

hearings scheduled by the Executive 

Secretary; 

(2) Reviewing case records, including 

public comments; 

(3) Requesting information and 

evidence from parties of record; 

(4) Developing information and 

evidence necessary for analysis of the 

threshold factors and the economic 

factors enumerated in § 400.25; and, 

(5) Conducting an analysis to include: 

(i) An evaluation of policy 

considerations pursuant to 

§§ 400.25(a)(1)(i) and (ii); 

(ii) An evaluation of the economic 

factors enumerated in §§ 400.25(a)(1)(iii) 

and 400.25(a)(2), which shall include an 

evaluation of the economic impact on 

domestic industry, considering both 

producers of like products and 

producers of components/materials 

used in the production activity; 

(iii) Conducting appropriate industry 

surveys when necessary; and 

(iv) Developing recommendations to 

the Board (and submitting a report to 

the Executive Secretary), generally 

within 150 days of the close of the 

period for public comment: 

(A) If the recommendations are 

unfavorable to the applicant, they shall 

be considered preliminary and the 

applicant shall be notified in writing 

(via electronic transmission where 

appropriate) of the preliminary 

recommendations and the factors 

considered in their development. The 

applicant shall be given 45 days from 

the date of notification in which to 

respond to the recommendations and 

submit additional evidence pertinent to 

the factors considered in the 

development of the preliminary 

recommendations. Public comment may 

be invited on preliminary 

recommendations when warranted. 

(B) If the response contains new 

evidence on which there has not been 

an opportunity for public comment, the 

Executive Secretary will publish notice 

in the Federal Register after completion 

of the review of the response. The new 

material will be made available for 

public inspection and the Federal 

Register notice will invite further public 

comment for a period of not less than 

30 days, with an additional 15-day 

period for rebuttal comments. 

(C) If the bases for an examiner’s 

recommendation(s) change based on 

new evidence, the procedures of 

§§ 400.34(a)(5)(iv)(A) and (B) shall be 

followed, where applicable. 

(b) Methodology and evidence. The 

evaluation of any proposal for 

production authority shall include the 

following steps: 

(1) The first phase (§ 400.25(a)(1)) 

involves consideration of threshold 

factors. If an examiner or reviewer 

makes a negative finding on any of the 

factors in § 400.25(a)(1) in the course of 

a review, the applicant shall be 

informed pursuant to 

§ 400.34(a)(5)(iv)(A). When threshold 

factors are the basis for a negative 

recommendation in a review of ongoing 

activity, the zone grantee and directly 

affected party shall be notified and 

given an opportunity to submit evidence 

pursuant to § 400.34(a)(5)(iv)(A). If the 

Board determines in the negative 

regarding any of the factors in 

§ 400.25(a)(1), it shall deny or restrict 

authority for the proposed or ongoing 

activity. 

(2) The process for § 400.25(a)(2) 

involves consideration of the 

enumerated economic factors, taking 

into account their relative weight and 

significance under the circumstances. 

Previous evaluations in similar cases 

will be considered. 

§ 400.35 Completion of case review. 

(a) The Executive Secretary will 

circulate the examiner’s report with 

recommendations to the Treasury Board 

member for its review and vote (by 

resolution). 

(b) The Treasury Board member will 

return its vote to the Executive Secretary 

within 30 days, unless a formal meeting 

is requested (see, § 400.3(b)). 

(c) The Commerce Department will 

complete the decision process within 15 

days of receiving the vote of the 

Treasury Board member, and the 

Executive Secretary will publish the 

Board decision. 

(d) The Board or the Commerce 

Department’s Assistant Secretary for 

Import Administration may opt to 

terminate review of an application with 

no further action if the applicant has 

failed to provide in a timely manner 

information needed for evaluation of the 

application, or if the Board is unable to 

reach a unanimous decision regarding 


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the disposition of the application. The 

Executive Secretary may terminate 

review of an application where the 

circumstances presented in the 

application are no longer applicable as 

a result of a material change, and will 

generally notify the applicant of the 

intent to terminate review and allow 30 

days for a response prior to completion 

of any termination action. 

§ 400.36 Procedure for application for 

minor modification of zone project. 

(a) The Executive Secretary, with the 

concurrence of the Port Director, will 

make a determination in cases under 

§ 400.23(c) involving minor changes to 

zone projects that do not require a Board 

order, such as boundary modifications, 

including certain relocations, and will 

notify the applicant in writing of the 

decision within 30 days of the 

determination that the application or 

request can be processed under 

§ 400.23(c). 

(b) Evidence of concurrence from the 

Port Director and all other 

documentation required for the request 

or application shall be provided by the 

applicant to the Board as part of the 

applicant’s submission of the request or 

application for minor modification. 

§ 400.37 Procedure for notification and 

review of production changes. 

(a) Requests for authority to use 

notification procedure. Pursuant to 

§ 400.14(e)(1), an applicant for FTZ 

production authority (or a grantee or 

operator with existing FTZ production 

authority) may request authority from 

the Board to notify the Board of future 

production changes involving new 

finished products or foreign status 

components/inputs. 

(1) Format for request for authority. A 

request for authority to use the 

notification procedure shall include a 

list of the tariff schedule headings 

(4-digit HTSUS) within which such 

notifications are projected to occur 

(separated into headings that relate to 

finished products and headings that 

relate to components), to which such 

notifications shall then be limited, and 

shall explain the relevance of each 

heading to current or projected activity 

and provide an economic justification 

for the request based on the elements in 

§ 400.22. The Executive Secretary shall 

establish any guidelines or format 

necessary to implement this section. 

(2) Review and decision on request for 

authority. The review of a request 

submitted pursuant to § 400.37(a) shall 

be conducted in accordance with the 

procedures delineated in §§ 400.31–32 

and 400.34–35. A Board approval of 

authority to use the production change 

notification provision may be subject to 

specific restrictions on a case-by-case 

basis, as warranted. 

(b) Procedure for notification of 

production change. 

(1) Deadline for notification. For any 

production change subject to this 

provision, the grantee or operator shall 

notify the Board no later than 45 days 

after the end of the calendar quarter 

during which the production change 

took place. 

(2) Format for notification. The 

notification shall name the zone or 

subzone operation for which the 

notification is occurring and delineate 

new finished products or foreign 

components associated with the change, 

including tariff schedule numbers and 

duty rates, as well as provide 

information addressing the impact of 

the notified change(s) on the elements 

in §§ 400.22(a)(3)(iv) and (vi) relative to 

prior approvals and notifications 

pursuant to § 400.14(e)(1). The 

Executive Secretary may modify the 

requirements of this paragraph and shall 

establish any guideline or format 

necessary to implement this section. 

(c) Review of notifications. Upon 

notification of a production change, the 

Executive Secretary will conduct a 

preliminary review of the change: 

(1) Public comment period. Within 30 

days after the deadline for receipt of 

notifications pursuant to § 400.37(b)(1), 

the Executive Secretary shall transmit 

for publication in the Federal Register 

a notice describing any production 

change for which such notification was 

received. The notice shall identify the 

zone or subzone operator/user 

associated with a change, the specific 

finished products or components 

notified for the operator/user, and the 

tariff schedule categories and tariff rates 

for the notified products or components. 

Such notice may be done in 

combination with notices for any other 

production changes notified for the 

same quarter. A public comment period 

of not less than 30 days shall be 

allowed. 

(2) Analysis and recommendation. 

The Executive Secretary’s preliminary 

review will examine the notified 

production change in relation to the 

operation’s previously approved activity 

to determine whether it could have 

significant adverse effects (individually 

or cumulatively with other notified 

changes under this section associated 

with the same production operation), 

taking into account the factors 

enumerated in § 400.25 and any 

comments received in response to the 

Federal Register notice announcing the 

notified change. Based on the review, 

the Executive Secretary shall make a 

recommendation to the Commerce 

Department’s Assistant Secretary for 

Import Administration regarding 

whether further review is warranted for 

the notified production change. The 

Executive Secretary’s recommendation 

shall be made within 90 days of the 

deadline for receipt of notifications 

pursuant to § 400.37(b)(1), except where 

a notified production change was the 

subject of negative public comment or of 

a hearing pursuant to § 400.52. 

(3) Decision on further review. Based 

upon the Executive Secretary’s 

recommendation, the Commerce 

Department’s Assistant Secretary for 

Import Administration shall determine 

whether further review is necessary. 

When warranted, further review shall be 

conducted in accordance with the 

procedures delineated in §§ 400.31–32 

and 400.34–35, as appropriate. The 

Assistant Secretary for Import 

Administration may terminate any 

further review based upon a 

recommendation by the Executive 

Secretary. 

(d) Limitations on use of notification 

provision. Pursuant to § 400.14(e)(1), the 

notification procedure described in this 

section does not apply to changes 

involving foreign status components/ 

inputs subject to antidumping duty (AD) 

or countervailing duty (CVD) orders or 

which would be otherwise subject to 

suspension of liquidation under AD/ 

CVD procedures (if they were to enter 

U.S. customs territory), subject to an 

order of the International Trade 

Commission pursuant to 19 U.S.C. 1337 

(Section 337) (if they were to enter U.S. 

customs territory), subject to any 

ongoing AD/CVD or Section 337 

proceeding, or subject to quantitative 

import controls (quotas). 

§ 400.38 Monitoring and reviews of zone 

operations and activity. 

(a) Ongoing zone operation(s) and 

activity may be reviewed at any time to 

determine whether they are in the 

public interest and in compliance and 

conformity with the Act and 

regulations, as well as the authority 

granted by the Board. Reviews involving 

production activity may also be 

conducted to determine whether there 

are changed circumstances that raise 

questions as to whether the activity is 

detrimental to the public interest, taking 

into account the factors enumerated in 

§ 400.25. The Board may prescribe 

special monitoring requirements in its 

decisions when appropriate. 

(b) Reviews may be initiated by the 

Board, the Commerce Department’s 

Assistant Secretary for Import 

Administration, or the Executive 

Secretary; or, they may be undertaken in 


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response to requests from parties 

directly affected by the activity in 

question showing good cause. After 

initiation of a review, any affected party 

shall provide in a timely manner any 

information requested as part of the 

conduct of the review. If a party fails to 

timely provide information requested as 

part of such a review, a presumption 

unfavorable to that party may be made. 

(c) Upon review, if a finding is made 

that zone activity is no longer in the 

public interest (taking into account the 

provisions of § 400.25 where production 

activity is involved), the Board or the 

Commerce Department’s Assistant 

Secretary for Import Administration 

may order the prohibition or restriction 

of the activity in question. Such 

prohibitions or restrictions may be put 

in place after a preliminary review (e.g., 

prior to potential steps such as a public 

comment period) if circumstances 

warrant such action until further review 

can be completed. The appropriateness 

of a delayed effective date will be 

considered. 

Subpart E—Operation of Zones and 

Administrative Requirements 

§ 400.41 Operation of zones; general. 

Zones shall be operated by or under 

the contractual oversight of zone 

grantees, subject to the requirements of 

the FTZ Act and this part, as well as 

those of other federal, state and local 

agencies having jurisdiction over the 

site and operation. Zone grantees shall 

ensure that the reasonable zone needs of 

the business community are served by 

their zone projects. The Port Director 

represents the Board with regard to the 

zone projects adjacent to the port of 

entry in question and is responsible for 

enforcement, including physical 

security and access requirements, as 

provided in 19 CFR part 146. 

§ 400.42 Operation as public utility. 

(a) In general. Pursuant to Section 14 

of the FTZ Act (19 U.S.C. 81n), each 

zone shall be operated as a public 

utility, in that all rates and charges for 

all services or privileges within the zone 

shall be fair and reasonable. Any rate or 

charge (fee) imposed on zone 

participants shall be based on costs 

incurred by the grantee and shall be 

directly related to the service provided 

by the grantee (for which the rate or 

charge recovers costs incurred) to the 

zone participants. Rates or charges may 

incorporate a reasonable return on 

investment. Rates or charges may not be 

tied to the level of benefits derived by 

zone participants. For any functions that 

a grantee contracts to third parties for 

which costs are passed on (wholly or in 

part) through charges to zone 

participants, costs must reflect going 

rates for the performance of such 

contracted functions. Any rates, charges 

or penalties paid by zone participants 

related to grantee functions shall be 

paid directly to the grantee (or, where 

applicable, to another public entity 

pursuant to a legal or contractual 

relationship with the grantee). 

(b) Delayed compliance date. 

Recognizing that some grantees’ existing 

business arrangements may not comply 

with the requirements detailed in this 

section, the effective date for 

compliance with the requirements of 

§ 400.42 shall be no later than two years 

after the date of publication of the final 

rule. 

§ 400.43 Uniform treatment. 

Pursuant to Section 14 of the FTZ Act 

(19 U.S.C. 81n), a grantee shall afford to 

all who may apply to make use of or 

participate in the zone project uniform 

treatment under like conditions. 

(a) Standard contractual provisions. 

Uniform treatment shall be ensured 

through the grantee’s offer of standard 

contractual provisions for agreements 

for zone participants. The standard 

provisions proposed by the grantee must 

be included in the grantee’s zone 

schedule (see § 400.45). 

(b) Agreements to be made in writing 

directly with grantee. Any agreement or 

contract related to one or more grantee 

function(s) and involving a zone 

participant (e.g., agreements with 

property owners, agreements with zone 

operators) must be in writing between 

the zone participant and the grantee. 

(c) Neutral evaluation criteria. 

Uniform treatment shall be ensured in 

the grantee’s evaluation of proposals 

from potential zone participants through 

the grantee’s application of evaluation 

criteria that are neutral and public 

interest-based. Uniform treatment does 

not require a grantee to accept all 

proposals by zone participants, but the 

bases for a grantee’s decision on a 

particular proposal must be consistent 

with the grantee’s evaluation criteria. 

(d) Justification for differing 

treatment. Given the requirement for 

uniform treatment under like 

conditions, for any instance of 

divergence from uniform treatment a 

grantee must be able to document upon 

request by the Executive Secretary the 

specific dissimilarity of conditions that 

justifies any difference in treatment. 

(e) Preclusion of conflicts of interest. 

To avoid non-uniform treatment of zone 

participants, this section seeks to 

preclude certain conflicts of interest in 

agents’ performance of the following 

zone-related grantee functions: 

Reviewing, making recommendations 

regarding or concurring on proposals/ 

requests by zone participants pertaining 

to FTZ authority or activation by CBP; 

any oversight of zone participants’ 

operations within the zone project; or 

collecting/evaluating annual report data 

from zone participants. None of those 

zone-related grantee functions shall be 

undertaken by: 

(1) A third party (or person on behalf 

of a third party) that currently engages 

in, or which has during the prior two 

years engaged in, offering/providing a 

zone-related product/service to or 

representing a zone participant in the 

grantee’s zone project; 

(2) Any person that stands to gain 

from a specific third party’s offer/ 

provision of a zone-related product/ 

service to or representation of a zone 

participant in the zone project; or, 

(3) Any person related, as defined in 

paragraph (f) of this section, to the third 

party/person identified in paragraphs 

(e)(1) and (2) of this section. 

(f) Definition of related parties. For 

purposes of this section, persons that 

are related would include: 

(1) Members of a family; 

(2) Organizations that are wholly or 

majority-owned by members of the same 

family; 

(3) An officer or director of an 

organization and that organization; 

(4) Partners; 

(5) Employers and their employees; 

(6) An organization and any person 

directly or indirectly owning, 

controlling, or holding with power to 

vote, 20 percent or more of the 

outstanding voting stock or shares of 

that organization; 

(7) Any person who controls any 

other person and that other person (the 

term control means the power, direct or 

indirect, whether or not exercised, 

through any means, to determine, direct, 

or decide important matters affecting an 

entity); or, 

(8) Any two or more persons who 

directly control, are controlled by, or are 

under common control with, any person 

(see definition of control in paragraph 

(f)(7) of this section). 

(g) Requests for determinations. A 

grantee or other party may request a 

determination by the Executive 

Secretary regarding the consistency of 

the grantee’s or other party’s actual or 

potential provision or arrangement with 

the requirements of this section. 

(h) Identification of agent. The Board, 

the Commerce Department’s Assistant 

Secretary for Import Administration, or 

the Executive Secretary may require a 

zone grantee to identify any agent that 

has performed one or more of the zonerelated grantee functions cited in 


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§ 400.43(e) in the zone project during a 

specified period of time. 

(i) Delayed compliance date. 

Recognizing that some grantees’ existing 

business arrangements may not comply 

with the requirements detailed in this 

section, the effective date for 

compliance with the requirements of 

§ 400.43 shall be no later than two years 

after the date of publication of the final 

rule. 

§ 400.44 Requirements for commencement 

of operations in a zone project. 

The following actions are required 

before operations in a zone may 

commence: 

(a) Approvals from the grantee and 

the Port Director, pursuant to 19 CFR 

part 146, are required prior to the 

activation of any portion of an approved 

zone project; 

(b) Prior to activation of a zone, the 

zone grantee or operator shall obtain all 

necessary permits from federal, state 

and local authorities, and except as 

otherwise specified in the Act or this 

part, shall comply with the 

requirements of those authorities; 

(c) The grantee shall submit the zone 

schedule to the Executive Secretary and 

to the Port Director, as provided in 

§ 400.45. 

§ 400.45 Zone schedule. 

(a) In general. The zone grantee shall 

submit to the Executive Secretary (in 

both paper and electronic copies) and to 

the Port Director a zone schedule which 

sets forth the elements required in this 

section. No element of a zone schedule 

may be considered to be in effect until 

such submission has occurred. If 

warranted, the Board may subsequently 

amend the requirements of this section 

by Board Order. 

(b) Each zone schedule shall contain: 

(1) A title page, with information to 

include: 

(i) The name of the zone grantee; 

(ii) The date of the original schedule; 

and, 

(iii) The name of the preparer; 

(2) A table of contents; 

(3) One or more sections with internal 

rules and regulations and policies for 

the zone, including a clear presentation 

of the standard contractual provisions 

offered to the various categories of zone 

participants. Inclusion of the standard 

contractual provisions in the zone 

schedule may take the form of one or 

more sample contracts or agreements 

presented in one or more appendices to 

the zone schedule; 

(4) All rates or charges assessed by or 

on behalf of the grantee; 

(5) Information regarding any 

operator(s) offering services to the user 

community, including the operator(s)’s 

rates or charges for all services offered; 

and, 

(6) An appendix with definitions of 

any FTZ-related terms used in the zone 

schedule (as needed). 

(c) The Executive Secretary may 

review the zone schedule (or any 

amendment to the zone schedule) to 

determine whether it contains sufficient 

information for zone participants 

concerning the operation of the zone 

and the grantee’s rates and charges as 

provided in paragraphs (b)(3) and (b)(4) 

of this section. If the Executive 

Secretary determines that the zone 

schedule (or amendment) does not 

satisfy these requirements, the 

Executive Secretary will notify the zone 

grantee. The Executive Secretary may 

also conduct a review under 400.46(b). 

(d) Amendments to the zone schedule 

shall be prepared and submitted in the 

manner described in paragraph (b) of 

this section, and listed in the 

concluding section of the zone 

schedule, with dates. A grantee may not 

apply rates/charges or other provisions 

required for the zone schedule unless 

those specific fees or provisions are 

included in the most recent zone 

schedule submitted to the Board and 

made available to the public in 

compliance with paragraph (e) of this 

section. 

(e) Availability of zone schedule. A 

complete copy of the zone schedule 

shall be freely available for public 

inspection at the offices of the zone 

grantee and any operator offering FTZ 

services to the user community. For any 

such grantee or operator that maintains 

a site on the internet, the current 

complete zone schedule shall also be 

made available via that internet site. 

The Board may make copies of zone 

schedules available via its own Internet 

site. The zone grantee shall send a copy 

to the Port Director, who may submit 

comments to the Executive Secretary. 

(f) Delayed compliance date. 

Recognizing that some grantees may 

need additional time to comply with the 

requirements detailed in this section, 

the effective date for compliance with 

the requirements of § 400.45 shall be no 

later than two years after the date of 

publication of the final rule. 

§ 400.46 Complaints related to public 

utility and uniform treatment. 

(a) In general. A zone participant may 

submit to the Executive Secretary a 

complaint regarding conditions or 

treatment that the complaining party 

believes are inconsistent with the public 

utility and uniform treatment 

requirements of the FTZ Act and these 

regulations. Complaints may be made 

on a confidential basis, if necessary. 

Grantees shall not enter into or enforce 

contractual provisions for agreements or 

contracts with zone participants that 

would require zone participants to 

disclose to other parties, including the 

grantee, any confidential 

communication with the Board under 

this section. 

(b) Objections to rates and charges. A 

current or prospective zone participant 

showing good cause may object to any 

rate or charge related to the zone project 

on the basis that it is not fair and 

reasonable by submitting to the 

Executive Secretary a complaint in 

writing with supporting information. 

The Executive Secretary will review the 

complaint and issue a report and 

decision, which will be final unless 

appealed to the Board within 30 days. 

The Board or the Executive Secretary 

may otherwise initiate a review for 

cause. The factors considered in 

reviewing fairness and reasonableness 

will include: 

(1) The actual costs of the specific 

services rendered by the zone grantee or 

operator, taking into account any extra 

costs incurred relative to non-zone 

operations and including return on 

investment, and reasonable out-ofpocket expenses; and, 

(2) The going-rates and charges for 

like zone operations (including based on 

other like operations at other similarly 

situated zones, taking into account any 

specific factors that may lead to 

differing underlying costs). 

§ 400.47 Grantee liability. 

A grant of authority will not 

ordinarily be construed to make the 

zone grantee automatically liable for 

violations by zone participants because 

grantees generally provide for operators/ 

users a framework of general authority 

within which individual parties may 

operate under the detailed supervision 

of CBP. In such circumstances, it would 

not be in the public interest to 

discourage public entities from zone 

sponsorship because of concern about 

liability without fault. Grantees should 

not be liable for the acts or violations of 

operators or users in which they share 

no fault. However, this section will not 

necessarily apply to a grantee that 

undertakes detailed operational 

oversight or direction to operators/users 

within its zone. 

§ 400.48 Retail trade. 

(a) In general. Retail trade is 

prohibited in zones, except that sales or 

other commercial activity involving 

domestic, duty-paid, and duty-free 

goods may be conducted within an 

activated zone project under permits 


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issued by the zone grantee and 

approved by the Board, with the further 

exception that no permits shall be 

necessary for sales involving domestic, 

duty-paid or duty-free food and nonalcoholic beverage products sold within 

the zone or subzone for consumption on 

premises by individuals working 

therein. The Executive Secretary will 

determine whether an activity is retail 

trade, subject to review by the Board 

when the zone grantee requests such a 

review with a good cause. 

(b) Procedure. Requests for Board 

approval under this section shall be 

submitted in letter form, with 

supporting documentation, to the 

Executive Secretary, who is authorized 

to act for the Board in these cases, 

subject to the concurrence of the Port 

Director. 

(c) Criteria. In evaluating requests 

under this section, the Executive 

Secretary and the Port Director will 

consider: 

(1) Whether any public benefits 

would result from approval; and, 

(2) The economic effect such activity 

would have on the retail trade outside 

the zone in the port of entry area. 

§ 400.49 Zone-restricted merchandise. 

(a) In general. Merchandise which has 

been given export status by CBP officials 

(‘‘zone-restricted merchandise’’—19 CFR 

146.44) may be returned to the customs 

territory of the United States only when 

the Board determines that the return 

would be in the public interest. Such 

returns are subject to the customs laws 

and the payment of applicable duties 

and excise taxes (19 U.S.C. 81c(a), 4th 

proviso). 

(b) Criteria. In making the 

determination described in paragraph 

(a) of this section, the Board will 

consider: 

(1) The intent of the parties; 

(2) Why the goods cannot be exported; 

(3) The public benefit involved in 

allowing their return; and, 

(4) The recommendation of the Port 

Director. 

(c) Procedure. (1) A request for 

authority to return ‘‘zone-restricted’’ 

merchandise into U.S. customs territory 

shall be made to the Executive Secretary 

in letter form by the zone grantee or 

operator (with copy to the grantee) of 

the zone in which the merchandise is 

located, with supporting information 

and documentation. 

(2) The Executive Secretary will 

investigate the request and prepare a 

report for the Board. 

(3) The Executive Secretary may act 

for the Board under this section with 

respect to requests that involve 

merchandise valued at 500,000 dollars 

or less and that are accompanied by a 

letter of concurrence from the Port 

Director. 

Subpart F—Records, Reports, Notice, 

Hearings and Information 

§ 400.51 Accounts, records and reports. 

(a) Zone accounts. Zone accounts 

shall be maintained in accordance with 

generally accepted accounting 

principles, and in compliance with the 

requirements of Federal, State or local 

agencies having jurisdiction over the 

site or operation. 

(b) Records and forms. Zone records 

and forms shall be prepared and 

maintained in accordance with the 

requirements of CBP and the Board, 

consistent with documents issued by 

the Board specific to the zone in 

question, and the zone grantee shall 

retain copies of applications it submits 

to the Board. 

(c) Maps and drawings. Zone grantees 

or operators, and Port Directors, shall 

keep current layout drawings of 

approved sites as described in 

§ 400.21(d)(5), showing activated 

portions, and a file showing required 

approvals. The zone grantee shall 

furnish necessary maps to the Port 

Director. 

(d) Annual reports. (1) Each zone 

grantee shall submit a complete and 

accurate annual report to the Board 

within 90 days of the end of the 

reporting period, in accordance with 

any instructions, guidelines, forms and 

related documents specifying place, 

manner and format(s) prescribed by the 

Executive Secretary, for use by the 

Executive Secretary in the preparation 

of the Board’s annual report to the 

Congress. Each zone operator shall 

submit to the grantee a complete and 

accurate annual report, in accordance 

with any instructions, guidelines, forms 

and related documents specifying place, 

manner and format(s) prescribed by the 

Executive Secretary, in a timeframe that 

will enable the grantee’s timely 

submission of a complete and accurate 

annual report to the Board. 

(2) The Board shall submit an annual 

report to the Congress. 

§ 400.52 Notice and hearings. 

(a) In general. The Executive 

Secretary will publish notice in the 

Federal Register inviting public 

comment on applications docketed for 

Board action (see, § 400.32), and with 

regard to other reviews or matters 

considered under this part when public 

comment is necessary. Applicants shall 

give appropriate notice of their 

proposals in local general-circulation 

newspapers allowing at least 30 days for 

submission of comments regarding the 

proposal in question. The Board, the 

Secretary, the Commerce Department’s 

Assistant Secretary for Import 

Administration, or the Executive 

Secretary, as appropriate, may schedule 

and/or hold hearings during any 

proceedings or reviews conducted 

under this part whenever necessary or 

appropriate. 

(b) Requests for hearings. (1) A 

directly affected party showing good 

cause may request a hearing during a 

proceeding or review. 

(2) The request must be made within 

30 days of the beginning of the period 

for public comment (see § 400.32) and 

must be accompanied by information 

establishing the need for the hearing 

and the basis for the requesting party’s 

interest in the matter. 

(3) A determination as to the need for 

the hearing will be made by the 

Commerce Department’s Assistant 

Secretary for Import Administration 

within 15 days after the receipt of such 

a request. 

(c) Procedure for public hearings. The 

Board will publish notice in the Federal 

Register of the date, time and location 

of a hearing. All participants shall have 

the opportunity to make a presentation. 

Applicants and their witnesses shall 

ordinarily appear first. The presiding 

officer may adopt time limits for 

individual presentations. 

§ 400.53 Official record; public access. 

(a) Content. The Executive Secretary 

will maintain at the location stated in 

§ 400.54(e) an official record of each 

proceeding within the Board’s 

jurisdiction. The Executive Secretary 

will include in the official record all 

timely factual information, written 

argument, and other material developed 

by, presented to, or obtained by the 

Board in connection with the 

proceeding. The official record will 

contain material that is public, business 

proprietary, privileged, and classified. 

While there is no requirement that a 

verbatim record shall be kept of public 

hearings, the proceedings of such 

hearings shall ordinarily be recorded 

and transcribed when significant 

opposition is involved. 

(b) Opening and closing of official 

record. The official record opens on the 

date the Executive Secretary dockets an 

application or receives a request that 

satisfies the applicable requirements of 

this part and closes on the date of the 

final determination in the proceeding or 

review, as applicable. 

(c) Protection of the official record. 

Unless otherwise ordered in a particular 

case by the Executive Secretary, the 

official record will not be removed from 


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the Department of Commerce. A 

certified copy of the record will be made 

available to any court before which any 

aspect of a proceeding is under review, 

with appropriate safeguards to prevent 

disclosure of proprietary or privileged 

information. 

§ 400.54 Information. 

(a) Request for information. The Board 

may request submission of any 

information, including business 

proprietary information, and written 

argument necessary or appropriate to 

the proceeding. 

(b) Public information. Except as 

provided in paragraph (c) of this 

section, the Board will consider all 

information submitted in a proceeding 

to be public information, and if the 

person submitting the information does 

not agree to its public disclosure, the 

Board will return the information and 

not consider it in the proceeding. 

Information to meet the basic 

requirements of §§ 400.21 through 

400.23 and 400.37 is inherently public 

information to allow meaningful public 

evaluation pursuant to those sections 

and § 400.32. 

(c) Business proprietary information. 

Persons submitting business proprietary 

information and requesting protection 

from public disclosure shall mark the 

cover page ‘‘business proprietary,’’ as 

well as the top of each page on which 

such information appears. Any business 

proprietary document submitted for a 

proceeding other than pursuant to 

§ 400.46 shall contain brackets at the 

beginning and end of each specific piece 

of business proprietary information 

contained in the submission. Any such 

business proprietary submission shall 

also be accompanied by a public version 

that contains all of the document’s 

contents except the information 

bracketed in the business proprietary 

version, with the cover page and the top 

of each additional page marked ‘‘public 

version.’’ Any data for which business 

proprietary treatment is claimed must 

be ranged or summarized in the public 

version. If a submitting party maintains 

that certain pieces of data are not 

susceptible to summarization or 

ranging, the public version must 

provide a full explanation specific to 

each piece of data regarding why 

summarization or ranging is not 

feasible. 

(d) Disclosure of information. 

Disclosure of public information will be 

governed by 15 CFR part 4. 

(e) Availability of information. Public 

information in the official record will be 

available at the Office of the Executive 

Secretary, Foreign-Trade Zones Board, 

U.S. Department of Commerce Building, 

1401 Constitution Avenue, NW., 

Washington, DC 20230 and may also be 

available electronically over the internet 

via http://www.trade.gov/ftz (or a 

successor internet address). 

Subpart G—Penalties, Prior Disclosure 

and Appeals to the Board 

§ 400.61 Revocation of grants of authority. 

(a) In general. As provided in this 

section, the Board can revoke in whole 

or in part a grant of authority for a zone 

or subzone whenever it determines that 

the zone grantee or, in the case of 

subzones, the subzone operator, has 

violated, repeatedly and willfully, the 

provisions of the Act. 

(b) Procedure. When the Board has 

reason to believe that the conditions for 

revocation, as described in paragraph (a) 

of this section, are met, the Board will: 

(1) Notify the grantee of the zone or 

subzone operator in question in writing 

stating the nature of the alleged 

violations, and provide the grantee or 

subzone operator an opportunity to 

request a hearing on the proposed 

revocation; 

(2) Conduct a hearing, if requested or 

otherwise if appropriate; 

(3) Make a determination on the 

record of the proceeding not earlier than 

4 months after providing notice to the 

zone grantee under paragraph (b)(1) of 

this section; and, 

(4) If the Board’s determination is 

affirmative, publish notice of revocation 

of the grant of authority in the Federal 

Register. 

(c) As provided in section 18 of the 

Act (19 U.S.C. 81r(c)), the grantee of the 

zone or subzone in question may appeal 

an order of the Board revoking the grant 

of authority. 

§ 400.62 Fines, penalties and instructions 

to suspend activated status. 

(a) In general. This section authorizes 

fines for certain specific violations of 

the FTZ Act or the Board’s regulations. 

Each instance of those specific 

violations is subject to a fine of not more 

than 1,000 dollars (as adjusted for 

inflation pursuant to § 400.62(k)), with 

each day during which a violation 

continues constituting a separate offense 

subject to imposition of such a fine (FTZ 

Act, section 19; 19 U.S.C. 81s). This 

section also establishes the party subject 

to the fine which, depending on the 

type of violation, would be the zone 

operator, grantee or agent of the grantee. 

In certain circumstances, the Board or 

the Assistant Secretary for Import 

Administration could instruct CBP to 

suspend the activated status of all or 

part of a zone or subzone. Violations of 

the FTZ Act or the Board’s regulations 

(including the sections pertaining to 

production activity and submission of 

annual reports), failure to pay fines or 

failure to comply with an order 

prohibiting or restricting activity may 

also result in the Executive Secretary 

suspending the processing of any 

requests to the Board and staff relating 

to the zone or subzone in question. 

Suspensions of activated status and 

suspensions of the processing of 

requests will generally be targeted to the 

specific non-compliant operation(s). 

(b) Violations involving production 

activity. 

(1) For purposes of § 400.62(b), each 

of the following constitutes a separate 

offense, with the operator subject to a 

fine of not more than 1,000 dollars (as 

adjusted for inflation pursuant to 

§ 400.62(k)) for each such separate 

offense: 

(i) Each finished product or foreign 

component or combination thereof for 

which the operator had failed to obtain 

the required advance approval pursuant 

to § 400.14(a) or to submit notification 

pursuant to § 400.14(e)(1); 

(ii) Production involving any finished 

product, foreign component, or 

combination thereof authorized by the 

FTZ Board (or properly notified under 

§ 400.14(e)(1)) at a level exceeding the 

plant’s capacity authorized by the Board 

(or properly notified under 

§ 400.14(e)(2)); and, 

(iii) Each day during which an offense 

cited in § 400.62(b)(1)(i) or (ii) 

continues. 

(2) Consistent with § 400.47, in 

instances where a grantee or agent of the 

grantee has undertaken detailed 

operational oversight or direction of an 

operator engaged in production within a 

zone project, the grantee or agent may 

also be subject to a fine of not more than 

1,000 dollars (as adjusted for inflation 

pursuant to § 400.62(k))for each offense 

of the operator that is subject to 

§ 400.62(b)(1)(i), (ii) or (iii). 

(c) Violations involving requirement 

to submit annual report. Each day 

during which a grantee fails to submit 

a complete and accurate annual report 

pursuant to section 16 of the FTZ Act 

(19 U.S.C. 81p(b)) and § 400.51(d)(1) of 

these regulations constitutes a separate 

offense subject to a fine of not more than 

1,000 dollars (as adjusted for inflation 

pursuant to § 400.62(k)). Further, each 

day during which a zone operator fails 

to submit to the zone’s grantee the 

information required for the grantee’s 

timely submission of a complete and 

accurate annual report to the Board may 

constitute a separate offense subject to 

a fine of not more than 1,000 dollars (as 

adjusted for inflation pursuant to 

§ 400.62(k)). Consistent with § 400.47, in 


srobinson on DSKHWCL6B1PROD with PROPOSALS
Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Proposed Rules 82361 

circumstances where the violation 

demonstrably results from a zone 

operator’s failure to submit a complete 

and accurate report to the zone grantee, 

the responsible operator would be the 

focus of any fine-assessment action by 

or on behalf of the Board. 

(d) Violations involving conflicts of 

interest. Each day during which an 

agent of the grantee violates the 

provisions of § 400.43(e) of these 

regulations constitutes a separate 

offense for which the agent would be 

subject to a fine of not more than 1,000 

dollars (as adjusted for inflation 

pursuant to § 400.62(k)). 

(e) Procedures for determination of 

violations and imposition of fines. 

When the Board or the Executive 

Secretary has reason to believe that a 

violation of the FTZ Act, or any 

regulation under the FTZ Act, has 

occurred and that the violation warrants 

the imposition of a fine (such as 

situations where a party has previously 

been notified of action required to 

comply with the FTZ Act or the Board’s 

regulations and has failed to take such 

action within a reasonable period of 

time), the following steps will be taken: 

(1) The Executive Secretary will 

notify the party or parties responsible 

for the violation in writing stating the 

nature of the alleged violation, and 

provide the party(ies) a specified period 

(normally 30 days, with consideration 

given to any requests for an extension) 

to respond in writing; 

(2) The Executive Secretary will 

conduct a hearing, if requested or 

otherwise if appropriate; 

(3) The Executive Secretary will make 

a recommendation on the record of the 

proceeding not earlier than 15 days after 

the deadline for the party(ies)’s response 

under paragraph (e)(1) of this section. If 

the recommendation is for an 

affirmative determination of a violation, 

the Executive Secretary will also 

recommend a level of fine to be 

imposed; and, 

(4) The Board will make a 

determination regarding the finding of a 

violation and imposition of a fine based 

on the Executive Secretary’s 

recommendation under paragraph (e)(3) 

of this section. For related actions where 

the total sum of recommended fines is 

no more than 10,000 dollars (50,000 

dollars in the case of violations 

pursuant to paragraph (c) of this 

section), the Board delegates to the 

Executive Secretary the authority to 

make a determination. 

(f) Mitigation. (1) In general. The 

Commerce Department’s Assistant 

Secretary for Import Administration 

may approve the mitigation (reduction 

or elimination) of an imposed fine based 

on specific evidence presented by the 

affected party. Authority is delegated to 

the Executive Secretary to mitigate a 

fine where the total sum of fines 

imposed on a party for related actions 

does not exceed 10,000 dollars (50,000 

dollars in the case of violations 

pursuant to paragraph (c) of this 

section). Mitigating evidence and 

argument pertaining to mitigating 

factors must be submitted within 30 

days of the determination described in 

paragraph (e)(4) of this section. 

(2) Mitigating factors. Factors to be 

taken into account in evaluation of 

potential mitigation include: 

(i) The prior good record of a violator 

over the preceding five years with 

regard to the type of violation(s) at 

issue; 

(ii) A violator’s inexperience in the 

type of foreign-trade zone activity at 

issue; 

(iii) Violation due to the action of 

another party despite violator’s 

adherence to the requirements of the 

FTZ Act and the Board’s regulations; 

(iv) Immediate remedial action by the 

violator to avoid future violations; 

(v) A violator’s cooperation with the 

Board (beyond the degree of cooperation 

expected from a person under 

investigation for a violation) in 

ascertaining the facts establishing the 

violation; 

(vi) A violation resulting from a 

clerical error or similar unintentional 

negligence; 

(vii) Contributory Board error such as 

the violation resulting, at least in 

significant part, from the violator having 

relied on inaccurate written advice 

provided by a Board staff member; and, 

(viii) Other such factors as the Board, 

or the Executive Secretary, deems 

appropriate to consider in the specific 

circumstances presented. 

(g) Assessment of imposed fines. After 

evaluation of submitted mitigating 

evidence and argument, where 

applicable, the Commerce Department’s 

Assistant Secretary for Import 

Administration may assess an imposed 

fine (in whole or in part). Authority is 

delegated to the Executive Secretary to 

assess a fine where the total sum of the 

imposed fines for related actions does 

not exceed 10,000 dollars (50,000 

dollars in the case of violations 

pursuant to paragraph (c) of this 

section). 

(h) Time for payment. Full payment of 

an assessed fine must be made within 

30 days of the effective date of the 

assessment or within such longer period 

of time as may be specified. Payment 

shall be made in the manner specified 

by the Commerce Department’s 

Assistant Secretary for Import 

Administration or the Executive 

Secretary. 

(i) Procedures for instruction to 

suspend activated status. When a fine 

assessed pursuant to §§ 400.62(e) 

through (h) has not been paid within 90 

days of the specified time period, or 

there is a repeated and willful failure to 

comply with a prohibition or restriction 

on activity imposed by a Board Order or 

an order of the Commerce Department’s 

Assistant Secretary for Import 

Administration pursuant to 

§§ 400.14(e)(3) or 400.38(c), the Board or 

the Commerce Department’s Assistant 

Secretary for Import Administration 

may instruct CBP to suspend the 

activated status of the zone operation(s) 

in question (or, if appropriate, the 

suspension may be limited to a 

particular activity of an operator, such 

as suspension of the privilege to admit 

merchandise), and the suspension may 

remain in place until the failure to pay 

a fine or to comply with an order’s 

prohibition or restriction on activity has 

been remedied. In determining whether 

to instruct CBP to suspend the activated 

status of a zone operation in the 

circumstances noted, the following 

steps shall be taken: 

(1) Notification of party(ies). The 

Executive Secretary will notify the 

responsible party(ies) in writing stating 

the nature of the failure to timely pay a 

fine or to comply with a prohibition or 

restriction on activity imposed by a 

Board Order or an order of the 

Commerce Department’s Assistant 

Secretary for Import Administration. If 

the grantee is not one of the responsible 

parties notified, the Executive Secretary 

will also provide a copy of the 

notification to the grantee. The 

responsible party(ies) will be provided a 

specified period (of not less than 15 

days) to respond in writing to the 

notification; 

(2) Hearing. If the notified responsible 

party(ies) requests a hearing (or if a 

hearing is determined to be warranted 

by the Board, the Commerce 

Department’s Assistant Secretary for 

Import Administration or the Executive 

Secretary), it will be held before the 

Executive Secretary (or a member of the 

Board staff designated by the Executive 

Secretary) within 30 days following the 

party(ies)’s request for a hearing (or the 

determination by the Board, the 

Commerce Department’s Assistant 

Secretary for Import Administration or 

the Executive Secretary). The party(ies) 

may be represented by counsel at the 

hearing, and any evidence and 

testimony of witnesses in the 

proceeding will be presented. A 

transcript of the hearing will be 


srobinson on DSKHWCL6B1PROD with PROPOSALS
82362 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Proposed Rules 

produced and a copy will be made 

available to the responsible party(ies); 

(3) The Executive Secretary shall 

make a recommendation on the record 

of the proceeding not earlier than 15 

days after the later of: 

(i) The deadline for the party(ies)’s 

response under paragraph (i)(1) of this 

section; or, 

(ii) The date of a hearing held under 

paragraph (i)(2) of this section; and, 

(4) The Board or the Commerce 

Department’s Assistant Secretary for 

Import Administration shall make a 

determination regarding the 

recommendation on whether to instruct 

CBP to suspend activated status. If the 

determination is affirmative, the 

Executive Secretary shall convey the 

instruction to CBP. 

(j) Enforcement of assessment. Upon 

any failure to pay an assessed fine, the 

Board may request the U.S. Department 

of Justice to recover the amount 

assessed in any appropriate district 

court of the United States or may 

commence any other lawful action. 

(k) Adjustment for inflation. The 

maximum dollar value of a fine for a 

violation of the FTZ Act or the Board’s 

regulations is subject to adjustment for 

inflation pursuant to the Federal Civil 

Penalties Inflation Adjustment Act of 

1990 (Pub. L. 101–410), as amended by 

the Debt Collection Improvement Act of 

1996. 

§ 400.63 Prior disclosure. 

(a) A party subject to a fine pursuant 

to § 400.62 may provide a written 

disclosure of a violation of the FTZ Act 

or the Board’s regulations to the Board 

prior to the commencement of an 

investigation by the Board of the 

violation. 

(b) The disclosure should fully 

describe the circumstances surrounding 

the violation including: 

(1) The zone(s) or subzone(s) 

involved; 

(2) The CBP port(s) of entry involved; 

(3) The legal or regulatory provisions 

violated; 

(4) The circumstances of the act(s) 

constituting the violation; 

(5) The corrective measures 

undertaken to resolve the violation; 

(6) An assurance that the violation 

will not reoccur; and, 

(7) Copies of sufficient documentation 

for the Board to identify the act(s) 

constituting the violation. 

(c) Upon receipt of a written 

disclosure of a violation, the Executive 

Secretary will first determine the 

validity of the disclosure and provide 

written notice of the determination to 

the disclosing party. 

(d) The disclosure should be 

addressed to the Executive Secretary at 

the address in 400.54(e). Disclosures 

may also be submitted via electronic 

transmission as long as an identical, 

original copy is also mailed within two 

business days. 

(e) If a party subject to a fine pursuant 

to § 400.62 submits a valid written prior 

disclosure, it shall be the general policy 

of the Board (except in cases involving 

fraudulent intent) to reduce to a 

maximum of 1,000 dollars the total sum 

of potential fines for a single violation 

or series of offenses stemming from a 

continuing violation. 

(f) A prior disclosure pursuant to this 

section shall not involve the loss of 

revenue and is only applicable to those 

fines imposed pursuant to this section. 

Any prior disclosure involving a loss of 

revenue must be addressed through the 

procedures established by 19 U.S.C. 

1592(c)(4). 

§ 400.64 Appeals to the Board of decisions 

of the Assistant Secretary for Import 

Administration and the Executive Secretary. 

(a) In general. Decisions of the 

Commerce Department’s Assistant 

Secretary for Import Administration and 

the Executive Secretary made pursuant 

to §§ 400.12(d)(2), 400.14(d)–400.14(f), 

400.35(d), 400.46, 400.48, 400.49, 

400.62 and 400.63(c) may be appealed 

to the Board by adversely affected 

parties showing good cause. 

(b) Procedures. Parties appealing a 

decision under paragraph (a) of this 

section shall submit a request for review 

to the Board in writing, stating the basis 

for the request, and attaching a copy of 

the decision in question, as well as 

supporting information and 

documentation. After a review, the 

Board will notify the complaining party 

of its decision in writing. 

Dated: December 27, 2010. 

Christian Marsh, 

Acting Deputy Assistant Secretary for Import 

Administration, Chairman, Committee of 

Alternates, Foreign-Trade Zones Board. 

[FR Doc. 2010–32940 Filed 12–29–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF THE INTERIOR 

National Park Service 

36 CFR Part 9 

[2310–0062–422] 

Nonfederal Oil and Gas Development 

Within the Boundaries of Units of the 

National Park System; Intent To 

Prepare an Environmental Impact 

Statement for a Proposed Revision 

AGENCY: National Park Service, Interior. 

ACTION: Proposed rule; intent to prepare 

an environmental impact statement. 

SUMMARY: Notice is hereby given in 

accordance with the National 

Environmental Policy Act of 1969 

(NEPA) and Council on Environmental 

Quality regulations that the U.S. 

Department of the Interior, National 

Park Service (NPS), will prepare a 

programmatic environmental impact 

statement (EIS) on proposed revisions to 

existing regulations governing the 

exercise of nonfederal oil and gas rights 

within the boundaries of units of the 

National Park System. The current 

regulations have been in effect for over 

thirty years and have not been 

substantively updated during that 

period. The EIS will analyze a range of 

reasonable alternatives for regulating 

nonfederal oil and gas development and 

the potential environmental impacts on 

park resources such as threatened and 

endangered species, water resources, 

soils, vegetation, wetlands, air 

resources, night skies, wildlife, cultural 

resources, and soundscapes. Effects on 

oil and gas operators, visitor experience 

and public safety, adjacent lands, and 

park operations will also be analyzed. 

DATES: Comments must be received by 

February 28, 2011. 

ADDRESSES: Written comments or 

requests for information should be 

addressed to Sandy Hamilton, 

Environmental Quality Division, 

National Park Service, Academy Place, 

P.O. Box 25287, Denver, CO 80225. If 

you wish to comment electronically, 

you may submit your comments online 

in the NPS Planning, Environment and 

Public Comment (PEPC) Web site at 

http://parkplanning.nps.gov/WASO. 

Faxed or e-mailed comments will not be 

accepted. Comments should be received 

by the NPS within 60 days of the date 

of the publication of this notice in the 

Federal Register. Please be aware that 

your entire comment—including 

personal identifying information—may 

be made publicly available at any time. 

While you can ask us in your comments 

to withhold your personal identifying 

information from public review, we 

cannot guarantee that we will be able to 

do so. 

FOR FURTHER INFORMATION CONTACT: 

Sandy Hamilton, Environmental 

Protection Specialist, at 303–969–2068, 

or by mail at Sandy Hamilton, 

Environmental Quality Division, 

National Park Service, Academy Place, 

P.O. Box 25287, Denver, CO 80225. 

Further information about this project, 

including the Advanced Notice of 

Public Rulemaking and ‘‘Frequently 

Asked Questions’’ about the difference 


srobinson on DSKHWCL6B1PROD with PROPOSALS