The National Association of Foreign-Trade Zones The National Association of Foreign-Trade Zones Partnership. Pride. Prosperity. 1001 Connecticut Ave NW Suite 350 | Washington DC 20036 | 202.331.1950 202.331.1994 fax | www.naftz.org 1 CHAIRMAN’SLETTER Hello NAFTZ members and friends, Happy New Year and best wishes to all for a prosperous, productive and successful 2015. Considering how Foreign-Trade Zones affected our 2014 holiday season, the following scenario reflects on the list of Subzones found on the Foreign-Trade Zones Board list of Foreign-Trade Zones: Shopping for holiday gifts, you purchased new fishing gear for your brother from Cabela’s and shopped online with your Dell laptop through a vast array of gifts from Crate & Barrel before finally settling on table linens for your sister. When the receipt arrived in your email box, you printed it on your home Canon printer. The youngsters on your list received clothing from Gymboree, while you selected a trendy new Fossil watch for each teenager. Having celebrated at home with friends until the wee hours of the morning, you awoke with a powerful need for a Bayer tablet. You filled the Mister Coffee machine from a Delta faucet, pulled on your Levi jeans, and then sipped the java from a pretty Oneida cup. Making sure that special gift from Tiffany & Co. was safely packed in your carry-on Tumi luggage, you tripped over a pair of Nine West shoes left inside your front door by a guest who must have departed in stocking feet on the walk you cleared yesterday with your Husqarvana snow thrower. Of course, that brought on memo- ries of the weeks during autumn with a Black & Decker leaf blower in your hands on the same front walk. You wrote a note-to-self to add a Deere & Company riding mower to your post-holiday sale list. After an hour-long drive in your BMW, you arrived at the airport for an international flight, with the aviation fuel in the plane destined for export. All in all, Foreign-Trade Zones contributed favorably to your holiday season. 2015 will be a fine year of NAFTZ programs and outreach with your professional needs foremost in the planning process. Your Program Committee now under the leadership of Shane Williams plans to bring a fresh perspective to programming and evaluation through electronic means. On January 4-5, FTZ Fundamentals in Austin, TX, began the New Year by introducing the FTZ program from A to Z – from application and activation through zone benefits and zone status merchandise. I joined more than 70 new grantees, operators and users at the FTZ Fundamentals, including the welcome reception on Sunday evening. (Please see the story below for a full report on the event.) In Washington, DC, for the Legislative Seminar on February 10, you can expect a U.S. Customs and Border Protection update, a Foreign-Trade Zones Board report from Andrew McGilvray, and a timely discussion about the Miscellaneous Tariff Bill. The Legislative Seminar provides a premier forum for learning the latest regulatory and Congressional developments, and interacting with government officials and your FTZ colleagues. I hope you will consider setting aside February 11 to visit your elected officials on the hill, sharing with them the latest NAFTZ Annual Report. If an approval for Alternative Site Framework added Congressional districts to your FTZ project, this is prime time to tout the availability of a rapid FTZ response to the needs of business and industry in those newly added districts. Please watch the NAFTZ Zones Report for future details and mark your calendars for the NAFTZ Spring Seminar, May 17-19 in Tampa, FL, and the Annual Conference, September 27-30 in Los Angeles, CA. Sincerely, Jan Frantz, Chairman CONTENTS CHAIRMAN’SLETTER PRESIDENT’SLETTER NAFTZ NEWS NAFTZ hosts successful Fundamentals of FTZs Seminar in Austin, TX, Jan. 4-5 ................... 4 NAFTZ to offer Jan. 20 webinar on filing annual reports with FTZ Board .............................. 4 Register now for NAFTZ Legislative & Regulatory Seminar Feb. 10 in Washington, D.C. ..................... 4 FTZ COMMUNITY NEWS Hawaii Foreign Trade-Zone opens new International Trade Resource Center .................................. 6 NAFTZ Sends Letter, Leis to Hawaii to Congratulate Past President Homer A. Maxey ...................... 6 FTZ helps New Mexico set record for business recruitment in 2014 .... 8 TRADE NEWS A Trade Opportunity for Obama and the New Congress .............. 10 Obama hopes to enlist GOP in push for trade pact, despite Democratic resistance ............................. 10 Sen. Hatch welcomes new members to the Senate Finance Committee ............................ 11 REGULATORY UPDATE THANK YOU TO OUR SPONSORS
Transcript
ZONESREPORT JANUARY2015
The National Association of Foreign-Trade Zones
The National Association of Foreign-Trade Zones Partnership. Pride. Prosperity. 1001 Connecticut Ave NW Suite 350 | Washington DC 20036 | 202.331.1950 202.331.1994 fax | www.naftz.org 1
CHAIRMAN’SLETTERHello NAFTZ members and friends,
Happy New Year and best wishes to all for a prosperous, productive and successful 2015.
Considering how Foreign-Trade Zones affected our 2014 holiday season, the following scenario reflects on the list of Subzones found on the Foreign-Trade Zones Board list of Foreign-Trade Zones:
Shopping for holiday gifts, you purchased new fishing gear for your brother from Cabela’s and shopped online with your Dell laptop through a vast array of gifts from Crate & Barrel before finally settling on table linens for your sister. When the receipt arrived in your email box, you printed it on your home Canon printer. The youngsters on your list received clothing from Gymboree, while you selected a trendy new Fossil watch for each teenager.
Having celebrated at home with friends until the wee hours of the morning, you awoke with a powerful need for a Bayer tablet. You filled the Mister Coffee machine from a Delta faucet, pulled on your Levi jeans, and then sipped the java from a pretty Oneida cup.
Making sure that special gift from Tiffany & Co. was safely packed in your carry-on Tumi luggage, you tripped over a pair of Nine West shoes left inside your front door by a guest who must have departed in stocking feet on the walk you cleared yesterday with your Husqarvana snow thrower. Of course, that brought on memo-ries of the weeks during autumn with a Black & Decker leaf blower in your hands on the same front walk. You wrote a note-to-self to add a Deere & Company riding mower to your post-holiday sale list.
After an hour-long drive in your BMW, you arrived at the airport for an international flight, with the aviation fuel in the plane destined for export. All in all, Foreign-Trade Zones contributed favorably to your holiday season.
2015 will be a fine year of NAFTZ programs and outreach with your professional needs foremost in the planning process. Your Program Committee now under the leadership of Shane Williams plans to bring a fresh perspective to programming and evaluation through electronic means. On January 4-5, FTZ Fundamentals in Austin, TX, began the New Year by introducing the FTZ program from A to Z – from application and activation through zone benefits and zone status merchandise. I joined more than 70 new grantees, operators and users at the FTZ Fundamentals, including the welcome reception on Sunday evening. (Please see the story below for a full report on the event.)
In Washington, DC, for the Legislative Seminar on February 10, you can expect a U.S. Customs and Border Protection update, a Foreign-Trade Zones Board report from Andrew McGilvray, and a timely discussion about the Miscellaneous Tariff Bill. The Legislative Seminar provides a premier forum for learning the latest regulatory and Congressional developments, and interacting with government officials and your FTZ colleagues. I hope you will consider setting aside February 11 to visit your elected officials on the hill, sharing with them the latest NAFTZ Annual Report. If an approval for Alternative Site Framework added Congressional districts to your FTZ project, this is prime time to tout the availability of a rapid FTZ response to the needs of business and industry in those newly added districts.
Please watch the NAFTZ Zones Report for future details and mark your calendars for the NAFTZ Spring Seminar, May 17-19 in Tampa, FL, and the Annual Conference, September 27-30 in Los Angeles, CA.
2The National Association of Foreign-Trade Zones Partnership. Pride. Prosperity. 1001 Connecticut Ave NW Suite 350 | Washington DC 20036 | 202.331.1950 202.331.1994 fax | www.naftz.org
Note: All NAFTZ materials, including Zones Report, are the intellectual property of the association and are intended for the benefit of members only. The use of NAFTZ materials to advise or otherwise serve non-member clients is discouraged.
PRESIDENT’SLETTERDear NAFTZ Members:
2014 was a good year for NAFTZ and the FTZ program, and 2015 promises to be even better.
As we transition into a New Year, let’s take a moment to reflect on the eventful year we just finished, and look ahead to the promise of the year ahead of us.
During the past 12 months, NAFTZ fulfilled its mission to equip our members with the training, education, and connections they need to succeed as professionals in the FTZ envi-ronment. The highlight of the year was without doubt the NAFTZ’s 42nd Annual Conference and Exhibition in Fort Worth, Texas, last September. The event attracted 460 attendees who benefited from one of the best programs ever organized for an NAFTZ conference.
NAFTZ members enjoyed the uncommon privilege of hearing remarks on trade and the FTZ program straight from the CBP Commissioner himself, R. Gil Kerlikowske. Other CBP officials interacted with NAFTZ members on a range of subjects, from the implementation of the Automated Commercial Environment, to navigating Customs site visits. It was an unprecedented opportunity for NAFTZ members to interact in person with such a broad array of CBP officials at a single event.
NAFTZ members also benefited from attending the Fundamentals of FTZs Seminar in Orlando in January, the Legislative and Regulatory Seminar in Washington in February, and the Spring Seminar in Seattle in May. Thanks to the efforts of the Program Committee under the leadership of Shannon Fura, the content of NAFTZ events during the year was superb, and thanks to the professional management of Victoria Cartwright, the meals, logistics, and amenities of all the events were first-rate. Working with the Webinar Subcommittee, Victoria also successfully managed a series of nine ZoneCast webi-nars on a range of practical topics that were offered free to members.
NAFTZ also kept our members informed during the year with timely blast emails, the monthly Zones Report e-newsletter, and access to our enhanced web site.
NAFTZ made its presence felt in Washington in 2014 by effectively advocating for an improved FTZ program. Among the accomplish-ments was our influence on the development of ACE in a more FTZ-friendly direction through the efforts of the ACE Task Force and its tireless chair Melissa Irmen. We also offered a list of suggestions to the FTZ Board to improve the Online FTZ Information System as well as technical corrections for the Part 400 regulations. Through the efforts of Sean Murray, Rebecca Williams and others, NAFTZ filed additional comments with the Consumer Product Safety Commission to mitigate potentially harmful effects of a proposed rule on certifi-cates of compliance.
After years of effort, NAFTZ made real progress in 2014 to enable the enhanced reporting of FTZ exports both to the FTZ Board in its annual report and to the U.S. Census Bureau through the Automated Export System. Because of our efforts, 2015 could see the first widespread collection of FTZ export data that includes value added in zones as well as “indirect exports.”
On Capitol Hill, our long-time colleagues Jim Smith and Brian Hannigan at Smith Dawson and Andrews helped us deliver the message that the FTZ program is a vital tool for promoting trade, manufacturing investment, and exports. We visited a number of offices on in the House and Senate with the “ask” that Congress fully fund the final implementation of ACE. Our efforts in Congress culmi-nated with a well-attended briefing on the FTZ program for House staff members on Dec. 4, featuring Jose Quinonez and Melissa Irmen, and sponsored by the House Manufacturing Caucus.
Closer to home, the board and professional staff at NAFTZ made every effort to make wise use of the resources you provide for the
3The National Association of Foreign-Trade Zones Partnership. Pride. Prosperity. 1001 Connecticut Ave NW Suite 350 | Washington DC 20036 | 202.331.1950 202.331.1994 fax | www.naftz.org
BOARD OF DIRECTORSOFFICERSChairman of the BoardJan Frantz, Executive Director BC/CAL/KAL Inland Port Development
Vice ChairmanJose Quinonez, Foreign-Trade Zone Manager, City of El Paso, El Paso International Airport
TreasurerTrey Boring, Sr. VP, IMS Worldwide, Inc.
SecretaryJulie Brown, CEO Georgia Foreign-Trade Zone, Inc.
Jim Maloney, Maritime Marketing Manager, Port of San Francisco
Bill Fisher, Vice-President of Customs Compliance, American Global Brokerage Services
Charles Daniels, Director of Logistics, Fortessa, Inc.
William Carr, US Customs Compliance, Phillips 66
Rebecca Williams, Manager, Trade & Customs, The Rockefeller Group
Melissa Irmen, SVP, Products & Strategy, Integration Point
Cornelia Steinert, Canon Virginia, Inc.
Johnny Fernandez, Executive Director CODEZOL C.D.
Frankie Bryson, Nissan North America
Honorary DirectorDavid Ostheimer, Lamb & Lerch
Immediate Past ChairmanScott Wienke, Director, Global Trade Compliance, Abbvie, Inc.
General CounselMarshall V. Miller, Esq. Miller & Company, P.C.
Public Affairs AdvisorJames P. Smith Smith Dawson & Andrews
association. For the third year in a row, NAFTZ ran a significant sur-plus in its operations, allowing the board to rebuild the association’s reserve fund after difficult economic times in 2008-09. We have also been conscious to keep NAFTZ membership and events as affordable as possible. In 2014, a $50 discount for early membership renewal was extended to December 31, and the $10 credit card transaction fee was eliminated. NAFTZ member grantees received a total of $250 in rebates at the end of the year for new operator/user primary members from their zones.
Looking ahead, the NAFTZ board of directors has tasked the NAFTZ president and staff to give priority in 2015 to
• Secure an expanded pilot from Customs to extend direct delivery to non-owner operators and affiliates;
• Urge Customs to rewrite the Part 146 regulations of FTZs;
• Work through the ACE Task Force to ensure a smooth transition of FTZ data elements into ACE and full sensitivity to FTZs in the single-window reporting to PGAs in the International Trade Data System;
• Ask Congress to fully fund ACE implementation in the Customs Reauthorization bill.
More details about the highlights and accomplishments of 2014 and what’s ahead for 2015 will be featured in the 2014-15 NAFTZ Annual Report that you should be receiving by email later this month. I look forward to working with all of you to make 2015 a successful year for NAFTZ and for your companies and communities.
4The National Association of Foreign-Trade Zones Partnership. Pride. Prosperity. 1001 Connecticut Ave NW Suite 350 | Washington DC 20036 | 202.331.1950 202.331.1994 fax | www.naftz.org
NAFTZ NEWSNAFTZ hosts successful Fundamentals of FTZs Seminar in Austin, TX, Jan. 4-5
NAFTZ we l -comed more than 70 attendees to its annual Fundamentals of FTZs Seminar held on January 4-5 at the Sheraton Austin at the Capitol in Austin, Texas. Attendees enjoyed
a welcome reception Sunday evening, and then gathered at 7:30 Monday morning for a full-day overview of all aspects of the FTZ program.
Presenting the program were two FTZ operator/user veterans—Virginia Thompson of Crate and Barrel, and Frankie Bryson of Nissan North America. Between the two of them, they represented a wealth of practical experience and perspective from both the warehouse/distribution and the production/manufacturing sides of FTZ oper-ations. Their presentations prompted a number of good follow up questions from those attending.
Organizing this year’s Fundamentals was NAFTZ board member Jim Maloney of the Port of San Francisco. Jim introduced the speakers and also engaged the audience in several lively rounds of “FTZ Trivia.” NAFTZ President Dan Griswold opened the presentation with an overview of the FTZ program, and ended the day by touting the benefits of NAFTZ membership. NAFTZ Board Chair Jan Frantz also attended, welcoming the attendees at the Sunday night reception.
This year’s Fundamentals of FTZs Seminar also featured, for the first time, a beta version of a mobile app that allows those attending NAFTZ events to access program schedules, room locations, attendee rosters and other vital information on their smart phones, tablets, and other mobile devices. Stay tuned for updates as NAFTZ refines this new service for our members for use at our other events in 2015.
NAFTZ to offer Jan. 20 webinar on filing annual reports with FTZ Board
NAFTZ will kick off the 2015 ZoneCast webinar series on Tuesday, Jan. 20, with the essential and timely topic of “The Process of Filing Your Annual Report with the FTZ Board.” Presenting the complimentary webinar will be FTZ Board Senior Analyst Elizabeth Whiteman.
The webinar will cover all important aspects to assist grantees, oper-ators, and users in filing annual report information with the FTZ Board through its Online FTZ Information System (OFIS). The webinar will identify the steps to filing, offer a general overview of the process, and address possible challenges in preparing the report.
Guests can register for FREE here.
Register now for NAFTZ Legislative & Regulatory Seminar Feb. 10 in Washington, D.C.
The 2015 Legislative & Regulatory Seminar, “FTZs: Leading the Economic Expansion – Jobs, Exports, and Investment,” is shaping up to be a great event which will highlight the trade policy agendas of Congress and the Administration, with a special focus on the implications they will have on the Foreign-Trade Zone community. This year’s seminar will be held on Tuesday, February 10, 2015, at the Loews Madison Hotel in downtown Washington, DC.
Our annual Legislative & Regulatory Seminar brings NAFTZ members face-to-face with top decision makers in Washington DC to discuss
EVENT ADVERTISEMENT OPPORTUNITYNAFTZ is giving you the opportunity to advertise one of your own events or educational opportunities through our website. If you would like to post information on one of our event pages, please call the office at 202.331.1950 for more information.NAFTZ Event Advertisement Guidelines
• Advertising space must be purchased in three (3) month blocks.
• The cost is $3,500 for each three (3) month block of advertising space.
• Advertising will be displayed on the bottom of the specified event’s page.
• NAFTZ has final approval of advertisement content. Advertisement must not conflict with NAFTZ events or interests.
• This space is available for “event” advertisement only, including trainings, webinars, and other educational offerings. No specific products, software, or services, may be promoted in the advertisement space.
FTZ CLASSIFIEDSVisit our website to see up-to-date job openings!
Austin FTZ No. 183 Grantee Carrie Yeats addresses attendees during the luncheon on Monday.
5The National Association of Foreign-Trade Zones Partnership. Pride. Prosperity. 1001 Connecticut Ave NW Suite 350 | Washington DC 20036 | 202.331.1950 202.331.1994 fax | www.naftz.org
key public policy issues affecting the Foreign-Trade Zone commu-nity. The program consists of one full day of educational sessions, including a panel discussion with key officials. This year’s program will focus on the 2015 Congressional Trade Policy Outlook, and Update on FTZ Board with Executive Secretary Andrew McGilvray, the latest on the next steps in implementation of the Automated Commercial Environment (ACE) in 2015, and a discussion of the FTZ program as an alternative to the stalled miscellaneous tariff bill process.
You can view the event schedule and register for the seminar on the NAFTZ web site.
NAFTZ seeks to clear way for wider use of FTZ identifier in AES
NAFTZ made further progress in December in clearing the remaining road blocks to more widespread use of the FTZ identifier when reporting FTZ exports in the Automated Export System (AES). In an email com-munication to the Data Collection Coordination Branch at U.S. Census, NAFTZ has requested that the in-bond type and entry number fields in AES be made optional rather than mandatory for FTZ exporters.
The in-bond type and entry number information has been required by U.S. Customs when checking the FTZ identifier in AES even though the same information is supplied separately to Customs through bonded movement documents or the QP/WP filing. Many zone operators do not have the in-bond information at the time they file exports in AES and thus do not check the FTZ identifier even though the exports would qualify as coming from an FTZ for Census reporting purposes. By making the in-bond and entry number fields optional, FTZ operators would be free to flag the FTZ identifier and thus enhance the reporting of FTZ exports in Census data.
In a December 10 email to Wendy Peebles and Steve Bulman at the U.S. Census Bureau, NAFTZ requested that Census send a work request to U.S. Customs to make the in-bond information in AES
optional when flagging the FTZ identifier. Here is the text of the email from NAFTZ President Dan Griswold to U.S. Census:
“Thank you for indicating your willingness on our phone call last week to submit a work request to CBP regarding a change in the AES programming that will make it easier for FTZs to report bonded move-ments as originating from zones.Specifically, we would like the request to be that the in-bond type and entry number fields be optional, rather that mandatory, when an FTZ number is entered into the FTZ Identifier field.The work request for this change can be sent to Bill Delansky, with a copy to Lydia Jackson as she verified during our meeting last Thursday (Dec. 4) that CBP does not need the fields to be mandatory.
“As I think we all understand, this change is an important one to better reflect the value of exports originating from FTZs in the United States.The requirement to indicate the bond type and the in-bond number on the AES filing means that many zones do not complete the conditional FTZ number field for bonded movements because they are unable to provide the detailed in-bond data at the time of the AES filing (thus, the export does not appear in reporting as being attributed to FTZ activity). By making it optional, zones are encour-aged to always report their FTZ Identifier, so the export is accurately reflected as being conducted by a zone, and to provide whatever additional data is available at the time of the filing. …
“On behalf of the members of NAFTZ, we thank you for the good working relationship that has been established between NAFTZ and the U.S. Census Bureau. We all have a common interest in the most accurate and comprehensive collection of import and export data.”
NAFTZ will continue to work with U.S. Customs, U.S. Census, and the FTZ Board to ensure that the full extent of FTZ exports is cap-tured in U.S. trade data so that policy makers and the public can fully appreciate the significant, positive impact of the FTZ program on the U.S. economy.
NAFTZNEWS (CONTINUED)UPCOMING EVENTS
Legislative & Regulatory Seminar February 10, 2015 Loews Madison Hotel Washington, DC
Annual Spring Seminar May 17-19, 2015 Hilton Tampa Downtown Tampa, FL
Annual Conference & Exposition September 27-30, 2015 Loews Hollywood Hotel Hollywood, CA
ONLINE EDUCATION
The Process of Filing Your Annual Report with the FTZ Board January 20, 2015 2-3 p.m. Eastern
6The National Association of Foreign-Trade Zones Partnership. Pride. Prosperity. 1001 Connecticut Ave NW Suite 350 | Washington DC 20036 | 202.331.1950 202.331.1994 fax | www.naftz.org
JANUARY2015
FTZ COMMUNITY NEWSHawaii Foreign Trade-Zone opens new International Trade Resource CenterDec 11, 2014, By Duane Shimogawa, Reporter - Pacific Business News
The Honolulu-based Hawaii Foreign-Trade Zone No. 9, whose mission is to serve as the “hub of international trade” in the state, opened its new Homer A. Maxey International Trade Resource Center on December 11, 2014.
The center began a $10.5 million renovation in October 2013, which includes 40 additional offices, ranging in size from 200 square feet to 5,000 square feet, as well as a conference center and a co-working space.
The building renovation was funded in part by a grant from the U.S. Department of Commerce Economic Development Administration and the state.
Besides supporting the expansion of import/export and manufacturing in the state, the Hawaii Foreign Trade Zone No. 9, which is located on Pier 2 at Honolulu Harbor and is a division of the Hawaii Department of Business, Economic Development and Tourism, also works with the Island’s maritime industry through public-private collaboration.
The center was named for Homer A. Maxey, who was the first administrator for Hawaii Foreign-Trade Zone No. 9.
The full report and slideshow can be accessed at the web site of the Pacific Business News. The following photos were included in the report:
NAFTZ Sends Letter, Leis to Hawaii to Congratulate Past President Homer A. Maxey
NAFTZ joined in the celebration last month of the dedication of the Homer A. Maxey International Trade Resource Center at FTZ No. 9 on Honolulu, Hawaii. The center was named for Homer A. Maxey, who was not only the original grantee of the Honolulu zone but also a co-founder and the original president of NAFTZ in 1973-75.
In recognition of the well-deserved honor, NAFTZ sent two leis for Homer on the occasion of the December 11 dedication. The NAFTZ Advisory Council, com-posed of past NAFTZ presidents and honorary life members, also sent a letter of congratulations to Homer, recounting his unique and pivotal contribution to starting NAFTZ and modernizing the FTZ program. On the next page is the full text of the letter:
Edward Santos Jr., left, warehouseman retiree and David Sikkink, administrator, tour the outside of the second floor of the new Homer A. Maxey International Trade Resource Center
Homer A. Maxey and his wife Mahina celebrate the dedication ceremony launching the opening of the Homer A. Maxey International Trade Resource Center. Maxey was the first
7The National Association of Foreign-Trade Zones Partnership. Pride. Prosperity. 1001 Connecticut Ave NW Suite 350 | Washington DC 20036 | 202.331.1950 202.331.1994 fax | www.naftz.org
JANUARY2015
FTZ COMMUNITYNEWS (CONTINUED)
National Association of Foreign-Trade Zones1001 Connecticut Avenue NW Suite 350 Washington, DC 20036 202.331.1950 www.naftz.org
December 11, 2014
Mr. Homer MaxeyHawaii Foreign-Trade Zone No. 9521 Ala Moana Blvd. Pier 2, Suite 201Honolulu, Hawaii 96813
Dear Homer:
It is with a great deal of pride that the NAFTZ recognizes your extraordinary accomplishments on the occasion of the dedication of the “Homer A. Maxey International Trade Resource Center” at Foreign-Trade Zone No. 9 in Honolulu, Hawaii. In November of 1972, you joined representatives of Foreign-Trade Zones in New York, New Orleans, San Francisco, Seattle and Kansas City to hold an informal meeting at the U.S. Department of Commerce headquarters organized by Mr. John J. DaPonte Jr., then Acting Executive Secretary of the Foreign-Trade Zones Board. At that time there were 14 zone projects, 535 user firms, 972 jobs, with $44 million of dollar volume. The individuals in the room firmly believed that the FTZ program required a special effort to expand it. Forty-one years later, the Foreign-Trade Zones program in the United States is a robust economic development tool. With 268 zone projects in every state and Puerto Rico, over 3,000 user firms, $835 billion in dollar volume, and 390,000 jobs, the program has far exceeded those original representatives’ expectations.
When you were selected Chairman of a Committee to develop the organizational framework and development plan for a formal association representing FTZ Grantees, Operators, and Users, all parties knew that it would require the guidance of a very special person to be successful. What was necessary was a public/private partnership unlike any other since the Foreign-Trade Zones Act was not structured with federal funding or any methodology to organize and promote the FTZ program. Homer, you used your special skills to listen, observe, and consider all the many issues and concerns. In a quiet, yet resolute manner as a true leader you brought people together in a consensual way.
You chaired the first conference of FTZ managers held in Washington, D.C., on May 8, 1973, to launch the NAFTZ. You were elected the first President of the Association from 1973 to 1975. The indi-viduals launching the Association understood that in order for the U.S. Foreign-Trade Zones program to be robust, necessary changes must be made to the Federal laws and Federal regulations in order to create a strong foundation for the program to grow. Every element of the necessary structure to grow the program was examined and a plan developed for change. During your Presidency, the val-uation of merchandise manufactured in FTZs, inventory control and recordkeeping, and exactly how large-scale manufacturing could be managed were considered and effectively promoted. Central to the interest of the Hawaii FTZ was the effective management of petroleum zone activity with the Hawaiian Independent Refinery being the first FTZ oil refinery. Today the petroleum industry is the largest FTZ user group. You were always available for consultation with FTZ Grantees, Operators, and User firms to develop and expand the program.
You quickly recognized that Gubernatorial and Congressional support for zone projects was essential. On numerous occasions where changes to the FTZ Act or other laws were necessary, you activated the Governor of Hawaii and the Congressional Delegation of Hawaii to cooperate with the Governors and Congressional Delegations of the rest of the United States in order to pass necessary changes to laws to enhance the FTZ program. At that time an active effort was developed to partner with State and local economic development agencies to promote use of the FTZ program.
In 1979 you were recognized by the NAFTZ as its first Honorary Life Member. You continued to be actively engaged with the NAFTZ program not only as manager of the Hawaii FTZ, but subsequent to your retirement. Your wonderful wife, Mahina, was always by your side at NAFTZ functions providing admirable support and dedication. You have remained a key figure in the development of the U.S. Foreign-Trade Zone program.
Your impact on the U.S. Foreign-Trade Zone program is incalculable. We at the NAFTZ are proud of your extraordinary accomplishments over the years in helping to create the basic framework and structure of the National Association of Foreign-Trade Zones and the U.S. Foreign-Trade Zone program.
Congratulations and best wishes for the future.
Very truly yours,
The NAFTZ Advisory Council, Donnie Barnes, Tommy Berry, Domenick Gambardella, Brandi Hanback, Greg Jones, Lewis Leibowitz, Marshall Miller, Ray Shaw, Scott Wienke
8The National Association of Foreign-Trade Zones Partnership. Pride. Prosperity. 1001 Connecticut Ave NW Suite 350 | Washington DC 20036 | 202.331.1950 202.331.1994 fax | www.naftz.org
JANUARY2015
FTZ helps New Mexico set record for business recruitment in 2014The Las Cruces Bulletin December 26, 2014
Fiscal year 2013-14 was a banner one for recruiting 13 businesses to the state, Steve Vierck of the New Mexico Partnership (NMP) reported in September.
The big winner, he said, was Doña Ana County, where half the new companies are setting up shop.
Vierck said the majority of large businesses locating in New Mexico during the year came to Dona Ana County.
CertoPlast, a producer of technical adhesive tapes, is locating in Las Cruces at the West Mesa Industrial Park, the company announced in May. The German firm has chosen to open its first manufacturing operation in North America at the West Mesa Industrial Park to take advantage of the Foreign Trade Zone Designation in Las Cruces. It will hire 100 employees to produce adhesive tapes for automotive wire harnesses.
CertoPlast’s Managing Director Rene Rambusch said location was a main factor in the company’s decision. “With Las Cruces’ amenities and proximity to the Mexican auto industry, we found this to be the best place for our North American operations,” he told Juarez-ElPasoNow.com. He said the company also was attracted to the free trade zone.
Read the full story here.
Lakewood, N.J., FTZ No. 235 promotes commerce and tradeBusiness Facilities September/October 2014 By Shana Daley
The Lakewood Development Corporation, also known as the LDC, is the pri-mary economic catalyst operating on behalf of the Township of Lakewood. In 1994, after an evaluation performed by the State of New Jersey, Lakewood was identified as an economically depressed community and thus eligible to receive designation and incentive benefits as a State of New Jersey Urban Enterprise Zone. The LDC was created to manage the Township of Lakewood’s Urban Enterprise Zone (UEZ) and its Foreign Trade Zone (FTZ) programs.
As the administrator of these programs, the Corporation is tasked with promoting, encouraging and assisting local businesses to increase commerce and trade as well as fulfilling its main goal…the cultivation of business growth and job creation and retention for residents of Lakewood, NJ and the region. We continue to strive to meet and exceed the present and future needs of businesses through our continued partnership with our business community.
The Lakewood Foreign Trade Zone #235 was established in 1998 with approxi-mately 2000 acres of industrially zoned land in Lakewood assigned as the Zone area. Its authorized service boundaries have since been expanded to include Ocean, Monmouth, Middlesex, Burlington and Union counties which also includes the Lakewood Industrial Parks and industrial and commercial locations along other major NJ thoroughfares, (New Jersey Turnpike and Garden State Parkway), granting a greater number of manufacturing and industry the opportunity to utilize the benefits of this program.
In early 2014, FTZ #235 was transitioned to the FTZ Board’s new and preferred organizational structure—known as Alternate Site Framework, or ASF. The ASF process makes it easier and faster for economic development agencies such as the LDC to offer support to prospective FTZ companies in their jurisdiction. “It allows us to be more effective with its shortened review time for applications and which provides reduction in the number of activities that need formal applications, and is generally more responsive to the needs of today’s companies,” stated Patricia Komsa, executive director of the LDC and the FTZ #235 administrator.
Read the full story here.
Oneida County, NY, lawmakers approve FTZ expansionThe Rome (NY) Sentinal December 27, 2014
Oneida County legislators on Dec. 23 approved an application to expand the county’s foreign trade areas, including adding the Griffiss airport and industrial park sites. Approval of the foreign trade zone expansion application followed an elaboration by county Aviation Commissioner Russell Stark on what is being sought.
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JANUARY2015
Such zones can assist companies by allowing delayed or reduced duty payments on foreign merchandise, as well as other savings. By expanding the county’s zone, the possibility of a manufacturing firm coming to the county airport or the industrial park area at Griffiss park would be increased, said Stark. Such com-panies could take advantage of customs and border protections, he noted, in conjunction with plans for basing a U.S. Customs agent at Griffiss.
Stark said after the meeting that the five current designated foreign trade zones in the county do not include Griffiss. The U.S. Foreign-Trade Zones Board’s approval of the county’s current zones dates back to 1991, when Griffiss was an Air Force base.
Work is still fun for John Hebert, 76, at FTZ No. 171 in Liberty, TXDayton (TX) News December 3, 2014By Casey Stinnett
Still busy and working at 76 years old, John Hebert Sr., at center, sits on the board of the Liberty County Foreign-Trade Zone, No. 171. Shown here at their last meeting, Trey Boring of IMS Worldwide, Inc., at left, described to the Liberty County Foreign Trade Zone board his firm’s report at their annual meeting Thursday, Oct. 16. The other board members pictured are Bill
Sjolander, seated on the right, and in the foreground are Kelly McDonald, the City of Cleveland’s city manager, and Naomi Harrington, the City of Liberty’s director of finance.
Ask Hebert what he does for fun, and “work” is the answer you will get. He and his wife, Connie, are longtime residents of Liberty, Texas, and pretty well known. Both are from Houston, and they married while still teenagers.
Hebert was brought up in the Heights and went to St. Thomas High School. He worked for the post office for a while but found it “too regimented” for his tastes. After a short stint as a salesman, Hebert started work at a Gulf service station in 1957 and was made an assistant manager before he was drafted into military service at age 23.
He had basic training in Colorado and did his military service in Alaska. Discharged in 1963, Hebert went back to work for Gulf. That company made good use of him, and Hebert won a few promotions, the last one moving him to Beaumont.
Hebert struck out on his own in 1972 with a distribution company moving Gulf products and then began buying and selling his own inventory in the 1980s. Hebert is still active in the company, along with his son, John Hebert Jr.
After a career with the Department of Public Safety, Stephen Hebert is now justice of the peace for Liberty County Pct. 1.
10The National Association of Foreign-Trade Zones Partnership. Pride. Prosperity. 1001 Connecticut Ave NW Suite 350 | Washington DC 20036 | 202.331.1950 202.331.1994 fax | www.naftz.org
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TRADE NEWSA Trade Opportunity for Obama and the New CongressThe Wall Street Journal December 28, 2014By Charles Boustany and Robert B. Zoellick
After the midterm elections, political commentators identified trade policy as one area for cooperation between President Obama and the Republican Congress. We agree. Under the U.S. Constitution, Congress has authority over trade. But the active direction and use of that authority depends on an energetic executive, in partnership with Congress.
According to a recent Pew Research survey, 66% of Americans believe greater U.S. involvement in the global economy is a “good thing,” with only 25% thinking it is bad. The Trans-Pacific Partnership (TPP) trade agreement is a “good thing” in the eyes of 55% of Americans, versus 25% who consider it bad; the Transatlantic Trade and Investment Partnership (TTIP) scores 53% good and 20% bad. These inclinations offer opportunity.
Prof. Richard Neustadt explained to President John F. Kennedy that the pres-idency relied on the “power to persuade.” It’s time for Mr. Obama to persuade on trade. He must make use of the convening power of the executive to bolster his advocacy. His administration must work closely with Congress—to listen, explain, address problems and cut deals.
So why does trade matter? First, Americans are feeling squeezed. On the eve of the election, Pew Research reported that 79% of Americans considered the economy to be poor or at best fair. A boost in U.S. trade can increase wages and lower living expenses for families—offering higher earnings and cutting taxes on trade. Manufacturing workers who produce exports earn, on average, about 18% more, according to the Commerce Department. Their pay raise can be traced to the higher productivity of competitive exporting businesses.
Read the full article here.
Obama hopes to enlist GOP in push for trade pact, despite Democratic resistanceThe Washington Post December 26, 2014By David Nakamura
President Obama is preparing a major push on a vast free-trade zone that seeks to enlist Republicans as partners and test his premise that Washington can still find common ground on major initiatives.
It also will test his willingness to buck his own party in pursuit of a legacy-bur-nishing achievement. Already, fellow Democrats are accusing him of abandoning past promises on trade and potentially undermining his domestic priority of reducing income inequality.
The dynamic, as the White House plots strategy for the new year when the GOP has full control of Congress, has scrambled traditional political alliances. In recent weeks, Obama has rallied the business community behind his trade agenda, while leading Capitol Hill progressives, including Sen. Elizabeth Warren (D-Mass.), have raised objections and labor and environmental groups have mounted a public relations campaign against it.
The administration is moving aggressively in hopes of wrapping up negotiations by the middle of next year on a 12-nation free-trade pact in the Asia-Pacific region before the politics become even more daunting ahead of the 2016 presidential campaign.
“This is an all-hands-on-deck moment for the administration,” said Rep. Ron Kind (D-Wis.), a pro-trade Democrat viewed by the administration as a key ally. “They need to get out and educate members and address the concerns they might have. I’ve been advising colleagues who are skeptical and not supportive of trade to at least engage in conversations and feedback.”
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Looking back on the year in tradePolitico December 30, 2014By Doug Palmer, Victoria Guida and Adam Behsudi
Efforts to wrap up Asia-Pacific trade talks, hammer Russia with sanctions and normalize U.S.-Cuba rela-tions marked some of the major developments in a topsy-turvy year in trade.
Things got off to a slow start after President Barack Obama’s push to advance legislation to speed up passage of the proposed Trans-Pacific Partnership and other trade agreements was stopped cold by leaders of his own party in Congress — a move that prevented Democratic lawmakers from having to take a tough trade vote that would alienate labor and environmental groups in the run-up to the midterm elections.
But the GOP took over the Senate anyway and strengthened its grip on the House, energizing sup-porters of Obama’s trade agenda in both parties. With 2014 moving into the rearview mirror, it’s time to review these and some of the other biggest trade issues of the year.
Obama’s opening to Cuba: Declaring “it’s time for a new approach,” Obama surprised the world on Dec. 17 by announcing plans to normalize relations with Cuba after more than 50 years of hostility. While the trade embargo remains in place, Obama’s opening includes reforms to make it easier to sell agricultural products to Cuba and for Americans to visit the communist-run island. The move infuriated Cuban-American members
of Congress, including Sen. Marco Rubio (R-Fla.), who fumed: “All this is going to do is give the Castro regime, which controls every aspect of Cuban life, the oppor-tunity to manipulate these changes to perpetuate itself in power.” But the American Farm Bureau Federation and other farm groups plan a rally next week to push for further reforms.
EX-IM’S near-death experience: When newly elected House Majority Leader Kevin McCarthy said in June that he favored closing down the U.S. Export-Import Bank, any chance of a straightforward reauthorization of the 80-year-old institution when its charter expired in September quickly disappeared. Reviled by some Republicans as an example of “crony capitalism” and extolled by many other lawmakers as an essential export tool, the bank seemed — to quote Bob Dylan — to be “knock, knock, knockin’ on heaven’s door” by late summer. In the end, a stopgap spending measure granted Ex-Im a reprieve through June, sending both sides back to their corners to fight again another day.
Trade facilitation deal sputters to life: The Trade Facilitation Agreement officially became part of the World Trade Organization’s legal framework this November, five months after it was supposed to happen and nearly a year after all members agreed to the deal. India and a few other countries threw a wrench in works in July by blocking implementation of the agreement and demanding that food stock-piling programs be shielded from WTO rules against trade-distorting subsidies. The United States and India struck a deal to resolve the issues just a few
weeks after Indian Prime Minister Narendra Modi vis-ited the United States. The rapprochement continued with the first meeting of the high-level U.S.-India Trade Policy Forum in four years. Next up, Obama will travel to India in late January to be “chief guest” at the country’s Republic Day celebrations.
Read the full article here.
Sen. Hatch welcomes new members to the Senate Finance Committee
Senate Finance Committee News Release December 15, 2014
Finance Committee Ranking Member Orrin Hatch (R-Utah) today welcomed Senators Dan Coats (R-IN), Dean Heller (R-NV) and Tim Scott (R-SC) to serve on the Senate Finance Committee in the 114th Congress.
“The Finance Committee has long been at the center of every major economic debate. Whether it’s pro-viding responsible tax relief to American families and job creators, increasing market access to domestic goods and products, or strengthening the nation’s entitlement programs to guarantee their solvency for future generations, our Committee has worked to develop smart policies to improve the prosperity of our great nation,” said Hatch.
“With the addition of these three Senators, the Republican side of this committee will only be stronger, and I am confident we’ll be able to work with our counterparts on the other side of the aisle to help drive a robust agenda to meet the demands
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of the American people.”
The Finance Committee has the largest jurisdiction of any congressional committee overseeing over 50 percent of the nation’s budget, including America’s entitlement programs, Medicare, Medicaid and Social Security, all tax policy, international trade, several welfare programs and the nation’s debt.
Below is the full list of the Republican members of the Finance Committee for the 114th Congress: Orrin Hatch, Utah; Chuck Grassley, Iowa; Mike Crapo, Idaho; Pat Roberts, Kan.; Mike Enzi, Wyo.; John Cornyn, Texas; John Thune, S.D.; Richard Burr, N.C.; Johnny Isakson, Ga.; Rob Portman, Ohio; Pat Toomey, Pa.; Dan Coats, Indiana; Dean Heller, Nev.; Tim Scott, S.C.
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REGULATORY UPDATEACE FOR EXPORTERS
Customs is proposing to add export functionality to the import Automated Commercial Environment (ACE). Comments are being accepted until Feb. 9, 2015. 79 Fed. Reg. 73098 (Dec. 9, 2014).
APHIS PERMITS
The Animal and Plant Health Inspection Service (APHIS) has announced changes to its permit process. APHIS will now notify applicants via email regarding the ePermits application. The applicant has thirty (30) days to respond to the con-ditions of the draft permit. If no response is received, APHIS will void the permit application.
BOYCOTTING COUNTRIES
The U.S. Treasury Department has published its updated list of countries that may request or require participation in a non-sanctioned boycott. 79 Fed Reg. 73141 (Dec. 9, 2014).
BROKER LICENSES
Customs is discontinuing the practice of publishing notices of broker license and permit cancellations in the Federal Register. 79 Fed. Reg. 73099 (Dec. 9, 2014).
CUSTOMS LAB TESTS
Reminding that Customs Lab test results need not always be accepted, Customs has issued a ruling accepting an importer’s challenge to its lab tests. HQ H187175 (May 14, 2014).
DEFECTIVE NAFTA CERTIFICATES
In time for companies preparing their 2015 Blanket NAFTA Certificates of Origin, Customs has issued an administrative message on defective NAFTA Certificates. Issues include illegibility, misclassification, incorrect or missing preference cri-teria, improper signatures, 3rd-country goods, Net Cost field errors, and single entry Certificates without an invoice or other unique reference number. CSMS #14-000598 (Nov. 17, 2014).
DOWNWARD ADJUSTMENTS
Customs has ruled that payments from a foreign parent company to their U.S. distributor do not affect the price actually paid or payable for the imported vehi-cles. The U.S. distributor had argued the incentives effectively lowered the MSRP of the vehicle, and should therefore lower the value for Customs purposes. HQ H125118 (Sept. 12, 2014).
eBOND
Customs will begin testing its centralized electronic bond program (eBond) in the Automated Commercial Environment (ACE) on January 3, 2015. 79 Fed. Reg. 70881 (Nov. 28, 20114).
Customs has a FAQ page for the eBond program. CSMS #14-000623 (Dec. 4, 2014).
FRAUDULENT FOOTWEAR
A federal grand jury in Sacramento, California recently indicted the owner of a footwear business on charges of evading approximately $5.6 million in Customs duties by instructing employees and others to create false invoices that under-valued the imported footwear.
FTZ DEVELOPMENTS
CBPF 216/5 Day Rule/Direct Delivery. Customs Headquarters has agreed to an expanded pilot program for publishing in the Federal Register in December/January. The new pilot will eliminate the yearly blanket CBPF 216 for certain purposes, eliminate the five-day rule, and expand Direct Delivery to include mer-chandise received by FTZ Operators that are not the “owner/purchaser.”
Customs Regulations. Customs Headquarters agreed to January meetings to discuss the complete re-write of Part 146.
AES FTZ ID. Customs agreed that with Census authorization, the in-bond code field in the AES Export document will become optional, providing far more flexi-bility for zones to place the FTZ identifier number in their AES filings.
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FUEL-CELL CLASSIFICATION
Providing guidance on the difference between the residual headings in Chapters 84 and 85, the U.S. Court of International Trade classified fuel cell-powered dispensers in Heading 8543 as “electrical” machinery. Rubbermaid Commercial Prods., LLC v. U.S., Slip Op. 14-139 (Dec. 2, 2014).
INTELLECTUAL PROPERTY
In a recent report, the Government Accountability Office (GAO) found that Customs does not routinely review the International Trade Commission’s (ITC) list of exclu-sion orders or post trade alerts to its intranet for each order. GAO-15-78 (Nov. 2014).
IRAN SANCTIONS
The temporary sanctions relief granted in November 2013 has been extended until June 30, 2015. Most of the previous U.S. sanctions remain in place. 79 Fed Reg. 73141 (Dec. 9, 2014).
ITA BREAKDOWN
After China and the U.S. agreed on the Information Technology Agreement (ITA) expansion last month, a significant breakdown in negotiations occurred as China has refused to phase out tariffs on flat panel displays. The ITA will not be concluded in 2014, and it is unknown whether negotiations can be concluded.
MADE IN USA
A class action filed against apparel companies including Macy’s for violating California’s “Made in USA” state law for selling jeans with labels that allegedly did not disclose all foreign components has been expanded to include an online retailer whose website included a “Made in USA” claim. Clark v. Citizens of Humanity, LLC, Case No. 3:14-CV-01404-JLS-WVG (Nov. 20, 2014).
MTB/DUTY SUSPENSIONS/GSP
The last Miscellaneous Trade Bill was authorized by Congress in 2010 and the last duty suspensions expired December 31, 2012. Companies should be exploring alternatives such as foreign-trade zones.
November 1 marked the 15-month anniversary of the lapse in the Generalized System of Preferences (GSP), the longest lapse in the history of the program.
GSP-eligible imports from AGOA-eligible countries continue to benefit from GSP. CSMS 14-000601 (Nov. 18, 2014).
RPS
The Bureau of Industry and Security (BIS) has unveiled a new search tool for the Consolidated Restricted Party Screening List.
RUSSIAN SANCTIONS
A recent Wall Street Journal article noted how the sanctions are impacting non-Russian companies.
OFAC has published new Frequently Asked Questions that provide further guid-ance on “shale projects,” “Arctic Projects,” what is production, and debt, credit, and progress payments.
Singapore Agreements
The U.S. and Singapore have signed an agreement on supply chain security programs and mutual assistance.
TFA
Hong Kong became the first WTO member to ratify the WTO’s Trade Facilitation Agreement (TFA) on December 10. Two-thirds of the WTO members must ratify the TFA for it to enter into force.
THE REGULATORY UPDATE IS PROVIDED TO ZONES REPORT EACH MONTH BY MILLER & CO.
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