Congress passed the Foreign-Trade Zones Act in 1934, amid the Great Depression. FTZs are secured areas considered to be outside the tariff boundaries of the US from the perspective of goods movement, storage, refinery, manufacturing, packaging, assembly, testing and destruction. In 2011, over 12% of all foreign good entered the US though FTZs – 75% as crude oil. Goods moving between FTZs and military bases remain in “international waters.” Early FTZs could be recognized by dramatic barbed wire fences, guarded by Customs agents. Today they are surrounded by electronic borders and linked by sophisticated data streams. Wanna go offshore?
This map shows the perimeter of FTZ 281 and all activated “usage-driven” sites as of April 15, 2015. Shaded areas are “magnet sites” (see definitions). Red shaded area is the general purpose FTZ 32 known as “Miami Free Zone” – an older zone offering wareehouse services to anyone.
source (click on “Zone and Site Information,” then on FTZ 281 and FTZ 32).
… The multiplication of inactive Foreign Trade Zones – which remained on the books for the rhetorical selling point they could offer to commercial real-estate developers – began to preoccupy Customs and Border Protection officials, now regrouped under the umbrella of Homeland Security. This concern, plus the declining usefulness of the manufacturing subzones, prompted a major overhaul of the FTZ-device in 2008, under the rubric of the “Alternative Site Framework” (ASF). Miami’s FTZ 281 signed on to the ASF in 2012. Zones and subzones were now reclassified into general purpose “magnet” sites and client-specific “user driven” sites which could be located anywhere. Further, they were all given expiration or “sunset” dates and closely monitored for their levels of activity, resulting in the termination of a large number of unused zones. Most importantly, both customs officials and FTZ operators (the “grantee” authorities and their associated professional organizations) began actively promoting new kinds of compliance-ensuring software packages for inventory control. These are what is driving the current phase of reorganization in the Foreign Trade Zones.
The software packages, which are sold and maintained by specialists, allow customs declarations to be filed electronically, often on a weekly basis, rather than per shipment. The result is dramatically lowered processing fees. The same software can be applied to bonded transportation services that extend the FTZ outward into domestic transportation networks, whether for journeys between zones or for deliveries to clients. In this way, the users of the packages – notably the 3PLs – are effectively paid with tariff reductions for adopting an integrated software system that now appears poised to set new global norms for inventory-control and customs-clearance operations. The key point is that these same software packages can be used, not just for customs clearance at FTZs, but for transportation operations worldwide, across a multitude of borders. The security ramifications are obvious: highly sophisticated commodity flows can be tracked across the planet in real time by the shippers themselves, according to parameters set by Customs and Border Protection, which will have access to all the information. What could be more ideal for Homeland Security, which seeks to monitor all global exchanges in the name of terrorism prevention? To encourage the development of this electronically recorded activity, the authorities have reduced the expense, time and location requirements for setting up new FTZs. The stage is now set for a fresh wave of growth in Foreign Trade Zones.
Source: Foreign Trade Zone 281 Guidebook