[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] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE Lapse of Authority for Inactive Foreign-Trade Zones AGENCY: Foreign-Trade Zones Board, International Trade Administration, Commerce. ACTION: Second notice. ----------------------------------------------------------------------- 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] BILLING CODE 3510-DS-P