GUIDELINES: Application for FTZ Manufacturing Authority

These guidelines put the requirements of the FTZ Regulations into a relatively simple structure. A sample completed application on our web site gives an idea of the type of information needed for each item. If you have questions, contact the FTZ Board staff at (202) 482-2862.

To help us review your application as quickly as possible, please indicate the question/item number at the beginning of each response. The FTZ Regulations place the burden of proof on the applicant, so please respond to each item completely based on the information available to you. Note that for industry/market information, you may rely on your expert knowledge of the industry in addition to traditional, published resources.

Application Letter

1. Your application must include a letter identifying your company and summarizing the zone site(s) to be used, proposed FTZ manufacturing activity, and why approval of that activity would be beneficial for the United States overall. The letter must be currently dated and signed by an authorized officer of the grantee or operator.

Company, Sourcing, Market, and Industry Information

2. Explain in detail why approval of your proposed FTZ manufacturing authority would be beneficial overall to the United States.

3. Describe problems, challenges or strengths facing your company and the U.S. industry. (For example, have production, employment, and operating profits been falling or rising? Have there been changes in the cost of raw materials? Also address any other relevant factors.)

4. List total employment company-wide.

5. List total employment at your proposed FTZ manufacturing plant.

6. How has your company's and plant’s employment changed in the last 5 years?

7. Will FTZ-related savings likely lead to increased, stable, or decreased employment at your plant? Explain.

8. Briefly describe the specific manufacturing activity which you are seeking to conduct under FTZ procedures. (As explained at the end of these guidelines, you will provide more detailed information relating to your requested FTZ manufacturing authority in a "Products and Components" attachment.)

9. Does your company have other plants (in the U.S. or overseas) that conduct the same activity or similar activity? If yes to either, please list the other plants' locations and explain.

10. For the products you want to produce under FTZ procedures, list the percentages (or percent ranges) by value of:
U.S. materials = ____________%; foreign materials = ____________%; and value added at your facility (labor, profit, overhead, etc.) = _____________%.
(U.S. materials + foreign materials + value added = 100%)

11. Are the components that you purchase from abroad also available from U.S. suppliers (if yes, why are you unable to obtain those components domestically)? Explain.

12. Will FTZ -related savings affect your company’s purchasing patterns? Explain.

13. What is the current annual production capacity at your plant? Are there any planned capacity changes? (Indicate the units of measure used.)

14. What is your company's current share of the U.S. market for the type of products you want to make under FTZ procedures?

15. List your major competitors in the U.S. market and their approximate U.S. market shares.

16. Are your competitors producing in the U.S. or abroad? Explain and give specific examples.

17. What is imports' share of the U.S. market for the type of products you want to make under FTZ procedures?

18. Has imports' share of the U.S. market changed in the past 5-10 years? How? Why?

19. How would approval of your proposed FTZ manufacturing affect your domestic competitors?

20. Are the purchasing patterns of competing domestic manufacturers similar to your company's?

21. If you are granted authority to manufacture under FTZ procedures, would the other U.S. manufacturers be likely to seek access to zone procedures? Explain.

22. What are the competitive factors in your industry? Any other factors unique to your industry?

23. What percent of your production of the products you want to make under FTZ procedures is sold to export markets?

24. Do you know your approximate share of the world-wide market for the products you want to make under FTZ procedures? If yes, list it.

25. List your major competitors in the world market and their approximate world market shares.

26. Briefly describe your company's background and current situation (including annual sales value or other indicator(s) of company's size and scope of operations).

27. Please list the main internet address(es) for information about your company and product(s).

28. Are you aware of any studies or reports that have be done recently regarding your industry or industry sector? If yes, please list the titles and authors/publishers below – you do not need to submit the studies/reports with the application. Note: The FTZ Staff may later ask for your assistance in obtaining a copy of these publications as part of the Staff's case-related research.

FTZ-Related Savings

29. What are the total estimated annual FTZ-related savings associated with the proposed activity you are describing in this application?

30. Provide the percentage breakdown for your total estimated FTZ savings into the following categories: Logistical/Paperwork; Inverted Tariff; Exports; Duty Deferral; and Scrap/Waste.

31. Provide any additional explanation or special features of the above savings that may be relevant to the review or implementation of zone procedures (e.g., formulas, Customs rulings, scrap as percentage of imported product).

32. Provide an estimated cost figure for operating your proposed FTZ manufacturing facility each year. (Components of your annual operating cost could include record keeping/inventory control, fees to the zone grantee, etc.)

33. Do you commit to work with Customs & Border Protection, as appropriate, to meet future CBP requirements for its automated systems (e.g., ACS, ACE)?

Site Information/Company Name

34. a. Zone/Subzone #      b. Site Number(s)

35. Site Address(es)

36. Company (Manufacturer) Name

Products and Components

37. Describe in detail the specific manufacturing activity – including the main products and components – which you are seeking to conduct under FTZ procedures.

38. Pursuant to the definition of "primary" components below, do you have components/inputs that are subject to antidumping ("AD") or countervailing duty ("CVD") duties? Are any of the components subject to quantitative restrictions (quotas)? Are you aware of any other trade-related issues affecting any of the components? If yes to any of these questions, explain.

Instructions for "Products and Components" attachment:

In a "Products and Components" attachment, you will list the “scope” of finished products and imported components/inputs that you propose for manufacturing under FTZ procedures. There are two categories of scope that you may include in your application -- the primary scope and an optional secondary scope:

Your primary scope should include: 1) the range of finished products and foreign-status components which your company plans to use in manufacturing under FTZ procedures and 2) finished products and foreign-sourced components that you believe that there is a significant likelihood that your company will need to use for FTZ manufacturing. For each primary finished product, provide an item description, 6-digit HTSUS number, and current U.S. duty rate. For each primary input, provide the same information plus an indication of which finished product(s) the input is used for.

You may also provide information in your "Products and Components" attachment to establish a secondary scope of authority for products and foreign-status components for which your company has no current manufacturing plans but which it may ultimately need to use in manufacturing under FTZ procedures. The intent of allowing a secondary scope is to give companies short-term flexibility to react quickly to new marketplace opportunities. As such, you would be able to use products and components from your secondary scope, but you should notify the FTZ Board once this activity becomes significant. Depending on the circumstances, an application for "expansion of authority" could be needed. In the absence of an expansion application, products and components listed in the secondary scope should not account for a significant amount of your company's FTZ-related savings.

A commitment to self monitor your company's use of the secondary scope by including the following language will facilitate processing of your application as well as reduce the potential need for FTZ Board and CBP monitoring of any approved activity:

"The applicant understands that the finished products and components listed in its secondary scope: 1) are not items for which the company currently has definite plans for manufacturing under FTZ procedures and 2) may not constitute a significant amount of the company's overall FTZ savings (unless the company has submitted an application to the FTZ Board to expand its primary scope to include the products and components at issue)."

For a secondary scope, the applicant should provide the following information for any finished products and components: item description, 4-digit HTSUS number, and current U.S. duty rate.