CBP Reviewing Expansion of FTZ Direct Delivery for C-TPAT Members
CBP is considering an update to its foreign-trade zone (FTZ) pilot program that would expand direct delivery to non-owner operators that are enrolled in the Customs-Trade Partnership Against Terrorism (C-TPAT) program, said Lydia Jackson, FTZ Program Manager at CBP. "We would like to leverage the C-TPAT program to allow for liberalizing direct delivery requirements," she said at the National Association of FTZs Regulatory and Legislative Seminar Feb. 11 in Washington. Long-planned changes to its in-bond regulations are expected to come soon, though the final rule is still being reviewed by the Treasury Department, said another CBP official.
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While still "conceptual at this stage," such direct delivery changes would potentially help FTZ security, streamline processing and increase C-TPAT participation, Jackson said. Direct delivery currently allows for the delivery of merchandise into a zone without prior application and approval on a CBP Form 214 if the operator is the owner or purchaser of the goods. The C-TPAT part of the idea is still being analyzed at CBP as to the impact on the C-TPAT budget and workload, she said. "By allowing FTZ operators to participate in C-TPAT we would be able to offer direct delivery for operators that are not the owner of the goods," she said. "Direct delivery would be allowed for C-TPAT certified operators that are not the owner of the goods if the operator is C-TPAT certified, the importer is C-TPAT certified and the merchandise is appropriate for direct delivery," she said.
CBP is also looking to clarify pilot language regarding the "five day rule," she said. For instance, CBP is looking at replacing the word "segregated," in the notice, which originally allowed for "duty-paid merchandise that has been entered for consumption to remain in an activated zone area for up to 90 calendar days after CBP releases the merchandise, so long as the merchandise remains segregated," said Jackson. CBP may also redefine "sampling," because the term has "distinct meanings for different industries," she said.
Revisions to in-bond regulations that would move all processing to an electronic environment, among other things, is being looked at by the Treasury Department, which oversees the customs revenue functions of CBP, said Gary Rosenthal, CBP Program Manager of Bonded Facilities for In-Bond. "They have some minor questions" but Rosenthal expects to see implementation by the end of the year, he said. The ongoing use of Global Enrollment System (GES) for vetting of FTZ and bonded warehouse employees, including officers and employees with recordkeeping responsibilities, continues to be a more efficient process, he said. The effort has processed about 2,700 names since it's been implemented, Rosenthal said.
CBP is in the process of looking at the initial effects of the FTZ pilot announced in June, said Susan Mitchell, assistant commissioner in CBP's Office of Field Operations. The pilot, which eliminated the use of CBP Form 216 and extended the “five-day rule” for removal of merchandise to 90 days, is hoped to give an understanding as to how the liberalization of such procedures would affect supervision and control within the process, she said. The top priorities for 2014 remain modernization and simplification in how CBP does business, she said. "We are going to continue to look at our own processes to identify potential inefficiencies, ways that we can do things better, and frankly, in a more electronic way" in order to "minimize our negative impact on trade," she said. The agency is also committed to "looking at the possibility" of adding C-TPAT provisions for FTZ operators, she said.