[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Notices]
[Pages 35711-35712]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17281]


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DEPARTMENT OF COMMERCE

Lapse of Authority for Inactive Foreign-Trade Zones

AGENCY: Foreign-Trade Zones Board, International Trade Administration, 
Commerce.

ACTION: Second notice.

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SUMMARY: The information that follows is provided as a follow-up to the 
notice published on April 1, 1996 (61 FR 14290) regarding 
Sec. 400.28(a)(5) (``lapse provision'') of the regulations of the 
Foreign-Trade Zones (FTZ) Board (15 CFR Part 400), which goes into 
effect on November 8, 1996, for certain inactive foreign-trade zones. 
Based upon an FTZ staff survey and contacts with zone grantees, it 
appears that some 40 of 210 existing FTZ projects could be initially 
affected by the lapse provision. In addition, it appears some 50 
subzones (out of some 350) could be individually affected 
notwithstanding the fact that the general-purpose zone with which they 
are affiliated would not be affected. Since the last notice, 7 projects 
have taken action to meet the activation requirements, and over 50 
percent of the remaining grantees affected are doing so.
    This second notice is published to give interested parties a 
further opportunity to comment on the interpretive guidelines and 
procedures that are being considered by the Board to implement 
Sec. 400.28(a)(5). As indicated below, certain changes are being 
considered after review of the comments received following the first 
notice.

EFFECTIVE DATES: As indicated in the first notice, the lapse provision 
first goes into effect for zones approved prior to November 8, 1991, 
which have not been activated at any time in the past and will not have 
been activated by November 8, 1996. Thereafter it will have a 
continuing effect that requires activation within 5 years of approval.

FTZ Activation

    The information relating to activation remains essentially as 
stated in the first notice. A zone grantee which will have reported in 
its annual report to the FTZ Board the receipt of shipments under FTZ 
procedures (and under Customs activation approval) at any time in the 
past prior to November 8, 1996, and thereafter within the applicable 
time frame, is deemed to have fulfilled the FTZ activation requirement 
with regard to its general-purpose zone sites, and for any subzones for 
which shipments have been reported. The grantees of zones so activated 
after the last annual report period are requested to notify the 
Executive Secretary with supporting information if they have not yet 
done so.
    A zone project at which no shipments have been actually received 
under FTZ procedures, but which is active in offering FTZ services to 
the public, may fulfill the activation requirement as follows: (1) 
obtain Customs activation approval under Sec. 146.6 of the Customs 
regulations (19 CFR Part 146) from the Customs Port Director (formerly, 
District Director) for the area; and, (2) submit a zone schedule to the 
Executive Secretary of the FTZ Board and to the Customs Port Director 
pursuant to Sec. 400.42(b) of the FTZ regulations. It is completion of 
both these requirements that constitutes ``FTZ activation''.
    As indicated in the first notice, zone grantees having no shipments 
to report and who are completing the requirements to avert a lapse of 
authority under Sec. 400.28(a)(5), shall notify the Executive Secretary 
in writing upon completion of the requirements, stating the extent to 
which the zone is open for business. The Executive Secretary will then, 
upon review, acknowledge in writing whether FTZ activation has occurred 
subject to FTZ Board approval of the procedures outlined in this 
notice.

Review Procedure

    As indicated in the first notice, beginning November 8, 1996, and 
thereafter on October 1 of each Federal fiscal year, the FTZ Staff will 
conduct periodic reviews with regard to zone projects that appear to be 
affected by Sec. 400.28(a)(5). Lists will be maintained by the FTZ 
staff of those zones for which authority has lapsed as well as those 
for which authority has terminated (after the reinstatement period), 
and the U.S. Customs Service will be kept advised.

Reinstatement

    Upon review of the comments received in response to the first 
notice,

[[Page 35712]]

the FTZ Staff is considering a recommendation to the FTZ Board which 
would provide for an 18-month period (instead of 12 months) for 
possible reinstatement of lapsed grants of authority. This would allow 
zone grantees to apply for reinstatement of FTZ authority for their 
general-purpose zone sites, and for subzones on an individual basis, if 
the FTZ activation requirements are met within 18 months of a lapse of 
authority. Grantees should notify the Executive Secretary when steps 
are being taken to qualify for reinstatement.
    During the reinstatement period, the authority for the affected 
zone and any associated subzones is considered lapsed, but termination 
of authority would not occur until the end of the reinstatement period. 
During the reinstatement period, the processing of any pending 
application(s) from the zone project involved will be halted; but, a 
grantee may request that processing be continued with regard to 
applications that are related to FTZ activation.

Interpretive Guidelines

    Interpretive guidelines 1-3 below remain the same, as published in 
the first notice, but guideline 4 has been revised.
    1. A zone which had been in FTZ activation at any time and for any 
length of time within the applicable time frame (i.e., prior to the 
lapse date) is not affected by the lapse provision.
    2. The FTZ activation of any part of a general-purpose zone or a 
subzone will suffice to preserve FTZ authority for all of the general-
purpose sites of a zone project, but each subzone is considered 
separately.
    3. The starting time for tolling whether a lapse of authority has 
occurred will be from the time of the original grant of authority for a 
zone project, and it will affect all general-purpose zone sites and 
subzones associated with the project, however recently approved, as 
well as applications submitted to or pending with the FTZ Board or the 
FTZ Staff.
    4. The FTZ activation of a general-purpose zone or subzone may be 
determined to extend to separate, but related, general-purpose zones or 
subzones approved for the same grantee if the projects were approved in 
the same Board action or if the projects are so interrelated in terms 
of their administration as an element of state/regional/local economic 
development programs (in the case of subzones, if the sites are 
administered as a unit by the subzone company), providing that the 
Customs Port Directors involved concur.

Authority for Determinations/Decisions

    The Executive Secretary would have authority to make determinations 
and decisions on matters relating to the lapse of authority provision, 
including FTZ activation and reinstatement. Appeals from such 
determinations and decisions could be made to the Board by affected 
zone grantees as provided for in Sec. 400.47 (15 CFR Part 400).
    Comments Invited: Further comments are invited in writing until 
August 7, 1996, from grantees and interested parties as to any of the 
information, procedures or guidelines outlined in this notice. They 
should be addressed to: Executive Secretary, Foreign-Trade Zones Board, 
U.S. Department of Commerce, Room 3716, 14th & Pennsylvania Avenue, 
NW., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: FTZ Staff--Claudia Hausler (202) 482-
2862; U.S. Customs--Marcus Sircus (202) 927-6894.

    Dated: June 28, 1996.
John J. Da Ponte, Jr.,
Executive Secretary.
[FR Doc. 96-17281 Filed 7-5-96; 8:45 am]
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