2012

74th ANNUAL REPORT of the

ForeignTrade Zones Board to the

Congress OF THE UNITED STATES

Foreign-trade zones (FTZs) – the U.S. variation on the general “free trade zone” concept – are secure areas under the supervision of U.S. Customs and Border Protection (CBP) that are considered outside the customs territory of the United States for the purposes of duty payment. Authority for establishing these facilities is granted by the Foreign-Trade Zones Board under the Foreign-Trade Zones Act of 1934, as amended (19 U.S.C. 81a-81u), and the Board’s regulations (15 C.F.R. Part 400). The Executive Secretariat of the Board is part of the Import Administration within the International Trade Administration of the U.S. Department of Commerce. Foreign and domestic merchandise may, subject to FTZ Board and CBP regulations, be moved into zones for operations not otherwise prohibited by law, including storage, exhibition, manipulation, and manufacturing. The Board’s regulations require a case-by-case review for all manufacturing activity to be conducted in FTZs. Under zone procedures, the formal customs entry procedure and payment of duties are not required on the foreign merchandise unless and until customs entry is made for domestic consumption. For foreign merchandise that undergoes further processing in a zone before customs entry, the importer ordinarily has a choice of paying duties either on the original foreign materials or on the resulting finished product. Domestic goods moved into a zone for export can be considered exported upon entering the zone for purposes of excise tax rebates and drawback. All FTZ sites and activities remain within the jurisdiction of federal, state and local governments and agencies. Each zone is managed locally by the “grantee” organization – generally a public or non-profit organization focused on trade and/or economic development. The FTZ Act requires each grantee to operate its zone as a public utility and to treat companies using the zone uniformly under like conditions. Traditionally, many zones have included sites at seaports or airports as well as some industrial parks, with the intent of attracting companies to the zone. Increasing numbers of zones are now opting to use the “Alternative Site Framework” made available by the Board beginning in December 2008, which enables a much quicker, simpler on-demand process to designate “subzones” or “usagedriven sites” at specific companies’ facilities. The regulations of the Foreign-Trade Zones Board are published in the Code of Federal Regulations at Title 15, Part 400 (15 C.F.R. Part 400), and the regulations of U.S. Customs and Border Protection concerning zones at Title 19, Part 146 (19 C.F.R. Part 146). Information on foreign-trade zones is available on the FTZ Web site via: http://www.trade.gov/ftz.

74th ANNUAL REPORT of the

Foreign-Trade Zones Board to the

Congress

OF THE UNITED STATES

Published August 2013 ISSN 1544-2322

Printed on recycled paper. Federal Recycling Program

The full text of this document is available on the Foreign-Trade Zone Board’s Internet site at www.trade.gov/ftz. It is also available for purchase as a paper or microfiche reprint, or an electronic download, from the National Technical Information Service, 5285 Port Royal Road, Springfield, VA 22161; www.ntis.gov.

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FOREIGN-TRADE ZONES BOARD 2012 REBECCA BLANK Acting Secretary of Commerce TIMOTHY F. GEITHNER Secretary of the Treasury

________ ALTERNATES

Paul Piquado Assistant Secretary for Import Administration U.S. Department of Commerce Timothy E. Skud Deputy Assistant Secretary of the Treasury (Tax, Trade, and Tariff Policy) U.S. Department of the Treasury

________ Andrew McGilvray Executive Secretary

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CONTENTS Page Introduction ............................................................................................................................

1

Appendices A - Summary of Statistics, 2008 – 2012 ................................................................................

4

B - Main Foreign-Status Products Received in U.S. FTZs ....................................................

6

C - Merchandise Received And Exports – Top 25 ................................................................

8

D - FTZ Activity by State ...................................................................................................... 13 E - Reference.......................................................................................................................... 121

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INTRODUCTION During the 2012 calendar year, the Foreign-Trade Zones (FTZ) Board received and docketed 93 requests, and issued 81 decisions. The Board’s decisions included approving five new foreign-trade zones, the reorganization of 35 zones under the FTZ Board’s alternative site framework (ASF) and 21 applications and notifications for new or expanded manufacturing authority. In addition, the FTZ Board Staff processed 150 requests administratively, including minor boundary modifications and scope determinations. There were 174 FTZs active during the year, with a total of 276 active manufacturing/production operations. Approximately 370,000 persons were employed at some 3,200 firms that used FTZs during the year. The value of shipments into zones totaled over $732 billion, compared with $640 billion the previous year (Appendix A). About 58 percent of the shipments received at zones involved domestic status merchandise. The level of domestic status inputs used by FTZ operations indicates that FTZ activity tends to involve domestic operations that combine foreign inputs with significant domestic inputs. Warehouse/distribution operations received more than $181 billion in merchandise while manufacturing/production operations received over $550 billion (75 percent of zone activity). The largest industries accounting for zone manufacturing/production activity include the oil refining, automotive, electronics, pharmaceutical, and machinery/equipment sectors. The main foreign-origin products received at zones are listed in Appendix B. Exports (shipments to foreign countries) from facilities operating under FTZ procedures amounted to nearly $70 billion (Appendix A). The export figures do not include certain indirect exports involving FTZ merchandise that undergoes further processing in the United States at non-FTZ sites prior to export. Appendix C contains lists of the Top 25 zones and states for FTZ merchandise received and exported during the year. In addition, information on FTZ activity by state, as well as within each zone, is available in Appendix D 1. The FTZ Board’s notices on applications as well as information on specific zone sites can be found on the FTZ Board’s website (www.trade.gov/ftz) under “Online FTZ Information System (OFIS).” In addition, the website contains contact information for each zone, a summary of all Board Orders, lists of administrative cases and other reference materials.

1

The data by state and by zone in Appendix D is reported in ranges because it incorporates business-proprietary information. 1

Annual Report of the Foreign-Trade Zones Board – 2012

Figure 1: Foreign-Trade Zones: Merchandise Received 1992-2012

800

700

600

Billion $

500

400

300

200

100

0

1992

1994

1996

1998

2000

2002

Foreign Status

2004

2006

Domestic Status*

2008

2010

2012

Total

* “Domestic status merchandise” includes both domestic-origin items and foreign-origin items that have been entered for consumption (duty-paid) prior to FTZ admission.

2


Figure 2: Foreign-Trade Zones: Exports (1992-2012)

80 70 60 50 Billion $

40 30 20 10 0

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Figure 3: Foreign-Trade Zones: Domestic Status* Merchandise Ratio (As percent of Total Merchandise Received) (1992-2012)

90 80 70 60 Percent

50 40 30 20

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

* “Domestic status merchandise” includes both domestic-origin items and foreign-origin items that have been entered for consumption (duty-paid) prior to FTZ admission. 3


Appendix A

APPENDIX A: SUMMARY STATISTICS 2008 – 2012

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Appendix A

SUMMARY STATISTICS, 2008 – 2012 ($ billion)

Merchandise Received Warehouse/Distribution Production

2008

2009

2010

2011

2012

692.6

430.6

534.3

640.9 106.2 534.6

732.2 181.8 550.4

83%

75%

% Production Foreign Status Inputs Warehouse/Distribution Production

296.3

182.0

223.1

277.0 52.1 224.9

303.8 91.9 211.8

Domestic Status Inputs1 Warehouse/Distribution Production

396.2

248.6

311.2

363.8 54.1 309.7

428.5 89.9 338.6

Domestic Status Inputs Ratio Warehouse/Distribution Production

57%

58%

58%

57% 51% 58%

58% 49% 61%

Exports2

40.5

28.2

34.8

54.3 12.5 41.8

69.9 16.7 53.2

Number of Approved FTZ3

253

253

254

257

256

Active FTZ4

164

168

168

171

174

Warehouse/Distribution Production

1

Domestic status merchandise includes both domestic-origin items and foreign-origin items that have been entered for consumption (duty-paid) prior to FTZ admission. 2

Export figures are based on material inputs and do not include value added.

3

The number of approved FTZs is the sum of all zones approved by the FTZ Board, minus those that have lapsed or been terminated. 4

Active FTZs have at least one site or subzone in operation.

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Appendix B

APPENDIX B: MAIN FOREIGN-STATUS PRODUCTS RECEIVED IN U.S. FTZs

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Appendix B

MAIN FOREIGN-STATUS PRODUCTS RECEIVED IN U.S. FTZs ($ million)

WAREHOUSE/DISTRIBUTION OPERATORS Oil/Petroleum Vehicles Consumer Electronics Textiles/Footwear Consumer Products Other Electronics Vehicle Parts Electrical Machinery Other Metals/Minerals Machinery/Equipment Pharmaceuticals Ships/boats Optical, Photographic and Medical Instruments Iron/Steel Plastic/Rubber Petrochemicals Chemicals Beverages/Spirits Food Products Stone/Plaster/Cement/Ceramics Tobacco Products Fragrances/Cosmetics Aircraft/Spacecraft Wood/Paper Rail Cars, Parts and Equipment Advanced Fiber Materials Dyes/pigments/paints

MANUFACTURING/PRODUCTION OPERATORS 29,689 16,158 9,825 3,795 3,308 2,861 1,694 1,190 1,184 1,176 1,007 499 420 417 379 338 311 301 244 125 102 90 86 79 39 7 1

Oil/Petroleum Vehicle Parts Consumer Electronics Pharmaceuticals Machinery/Equipment Petrochemicals Chemicals Ships/Boats Plastic/Rubber Consumer Products Other Metals/Minerals Electrical Machinery Other Electronics Optical, Photographic and Medical Instruments Textiles/Footwear Aircraft/Spacecraft Fragrances/Cosmetics Beverages/Spirits Dyes/Pigments/Paints Advanced Fiber Materials Food Products Iron/Steel Vehicles Stone/Plaster/Cement/Ceramics Wood/Paper

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187,941 9,483 6,694 5,090 4,568 1,585 1,371 927 890 634 545 479 232 195 168 85 77 52 41 39 30 30 17 4 4


Appendix C

APPENDIX C: MERCHANDISE RECEIVED AND EXPORTS – TOP 25

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Appendix C

MERCHANDISE RECEIVED AND EXPORTS – TOP 25 ($ million)

Top 25 States for FTZ Activity Merchandise Received 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Exports

State Texas Louisiana California Kentucky Illinois New Jersey Mississippi Tennessee South Carolina Pennsylvania Ohio Alabama Puerto Rico Florida Washington Indiana Georgia Michigan Delaware Hawaii Maryland Oklahoma Alaska Nevada Arkansas

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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State Texas Louisiana South Carolina Alabama Mississippi Florida Kentucky Tennessee Indiana California Puerto Rico Georgia Hawaii Illinois Washington Michigan New Jersey Virginia Pennsylvania Massachusetts Arizona Wisconsin Ohio Alaska Maryland


Appendix C

Top 25 States by Type of FTZ Activity Warehouse/Distribution Activity Merchandise Received 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

State Louisiana Texas California Florida Tennessee Puerto Rico South Carolina Georgia Maryland New Jersey Oklahoma Kentucky Michigan Nevada Pennsylvania Ohio Washington Illinois Alaska Hawaii Colorado Massachusetts Indiana Arizona New York

Manufacturing/Production Activity

Exports 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Merchandise Received

State Texas Florida Tennessee South Carolina Georgia California Illinois Hawaii Michigan Massachusetts Pennsylvania Ohio New Jersey Puerto Rico Alaska Colorado Maryland New Mexico Kentucky Washington Louisiana Arizona Indiana New York Delaware

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

10

State Texas Louisiana California Kentucky Illinois New Jersey Mississippi Alabama Pennsylvania Ohio South Carolina Tennessee Indiana Delaware Washington Puerto Rico Hawaii Michigan Arkansas Georgia Alaska Maryland Virginia Wisconsin Missouri

Exports 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

State Texas Louisiana South Carolina Alabama Mississippi Kentucky Indiana Puerto Rico Tennessee California Washington Virginia Hawaii Georgia New Jersey Arizona Wisconsin Michigan Illinois Florida Iowa New York Nebraska Pennsylvania Oregon


Appendix C

Top 25 by Zone (Warehouse/Distribution Activity) Merchandise Received 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Zone 124 84 148 168 38 74 164 25 202 49 62 68 61 29 70 7 144 126 26 205 86 50 64 160 138

Exports

Location Gramercy, Louisiana Harris County, Texas Knoxville, Tennessee Dallas/Fort Worth, Texas Spartanburg County, South Carolina Baltimore, Maryland Muskogee, Oklahoma Broward County, Florida Los Angeles, California Newark/Elizabeth, New Jersey Brownsville, Texas El Paso, Texas San Juan, Puerto Rico Louisville, Kentucky Detroit, Michigan Mayaguez, Puerto Rico Brunswick, Georgia Sparks, Nevada Atlanta, Georgia Port Hueneme, California Tacoma, Washington Long Beach, California Jacksonville, Florida Anchorage, Alaska Franklin County, Ohio

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

11

Zone 62 25 68 148 38 26 114 9 94 166 70 84 27 32 35 42 202 276 122 49 160 64 143 123 153

Location Brownsville, Texas Broward County, Florida El Paso, Texas Knoxville, Tennessee Spartanburg County, South Carolina Atlanta, Georgia Peoria, Illinois Honolulu, Hawaii Laredo, Texas Homestead, Florida Detroit, Michigan Harris County, Texas Boston, Massachusetts Miami, Florida Philadelphia, Pennsylvania Orlando, Florida Los Angeles, California Kern County, California Corpus Christi, Texas Newark/Elizabeth, New Jersey Anchorage, Alaska Jacksonville, Florida West Sacramento, California Denver, Colorado San Diego, California


Appendix C

Top 25 Manufacturing/Production Operations Merchandise Received 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Zone 84O 154A 124E 115B 122L 87B 116A 149C 35C 92D 84J 202B 124F 49E 122J 84P 116C 3B 47B 87A 122I 2I 116B 199C 124C

Exports

Company ExxonMobil Corporation ExxonMobil Oil Corporation Marathon Petroleum Company ExxonMobil Oil Corporation Flint Hills Resources, LP CITGO Petroleum Corporation Motiva Enterprises, LLC Phillips 66 Company Philadelphia Energy Solutions, LLC Chevron Corporation Shell Oil Company Chevron Products Company Motiva Enterprises, LLC Phillips 66 Company Valero Refining - Texas, LP Houston Refining LP The Premcor Refining Group Inc. Chevron Products Company Marathon Petroleum Company Phillips 66 Company Citgo Refining Phillips 66 Company Total Petrochemicals USA, Inc. Valero Refining - Texas, LP Motiva Enterprises LLC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

12

Zone 38A 124E 98A 122J 92D 115B 116C 177A 84O 87B 122I 199C 84J 154A 29E 78A 84N 7K 47C 2J 124A 2I 92 196 86D

Company BMW Manufacturing Company, LLC Marathon Petroleum Company Mercedes-Benz U.S. International Valero Refining - Texas, LP Chevron Corporation ExxonMobil Oil Corporation The Premcor Refining Group Inc. Bristol-Myers Squibb Company ExxonMobil Corporation CITGO Petroleum Corporation Citgo Refining Valero Refining - Texas, LP Shell Oil Company ExxonMobil Oil Corporation Toyota Motor Manufacturing Kentucky Nissan North America, Inc. Pasadena Refining System Lilly del Caribe, Inc. GE Engine Services Distribution LLC Valero Refining-Meraux LLC Valero Refining-New Orleans, LLC Phillips 66 Company Signal International Motorola, Inc. Tesoro Refining and Marketing Company


Appendix D

APPENDIX D: FTZ ACTIVITY BY STATE

13


Appendix D

ALABAMA

TOP FOREIGN-STATUS PRODUCTS BY VALUE

STATE SUMMARY

Vehicle Parts (82%)

Merchandise Received:

Oil/Petroleum (10%) Machinery/Equipment (6%) Tobacco (2%)

$10,000-25,000 mil

Exports:

$1,000-5,000 mil

Total Shipments

$10,000-25,000 mil

Employees

15,001-16,000

Chemicals (