September 19, 2002

Memo For: Foreign-Trade Zone Grantees
U.S. Customs Service Port Directors
From: Dennis Puccinelli
Executive Secretary

Re:     Special Minor Boundary Modification Procedures for Oil Refinery Subzones

It has been brought to my attention that there is a need for a procedure to handle situations in which an oil refinery subzone operator needs to store merchandise offsite temporarily on an urgent basis due to special operational circumstances (e.g., a refinery unit shutdown). We understand that such changes need to be approved very quickly and that they would be effective on a temporary basis.

The FTZ Board's minor boundary modification procedures can be used to handle such changes, and we would expedite the review process to accommodate the urgency. Such modifications require a letter from the zone and concurrence from the U.S Customs Service Port Director. The final decision is made by the FTZ Board's Executive Secretary. Though the review process normally takes 30 days, we can develop a standardized procedure for the situations we discussed so that decisions will be made within the needed time frame. The procedure would be as follows:

    A brief cover letter is usually needed from the grantee. However, if we expect recurring events, another option is to have the zone grantee provide a one-time letter to the FTZ Board concurring in a process whereby that zone's refinery subzone operators would make requests, as needed, to the FTZ Board for short-term, emergency minor boundary modifications, with the condition that the subzone operators copy the grantee on such requests.

    When the need arises, the subzone operator would fax or e-mail a request to the FTZ Board, briefly explaining the urgent circumstances, clearly identifying the proposed temporary site or facility (size, location, tank number), and indicating that the site details have been provided to the Customs Port Director.

    Customs requires that the subzone operator also notify the surety company.

    The U.S. Customs Service Port Director also would fax or e-mail to the FTZ Board a brief concurrence letter.

    The faxes or e-mails should be addressed to me with a copy to Ms. Liz Whiteman/Ms. Diane Finver.

    It is also suggested that the subzone operator follow up with a call to me, Ms. Whiteman or Ms. Finver (202 482-2862).

    The subzone operator would receive a decision by fax or e-mail from the Executive Secretary.

In developing these special procedures for oil refinery subzones, we considered the urgency presented by these situations, the small amount of space involved, the short time period involved, the fact that the Port Director and subzone operator will work closely on the details relating to the site and security, and the fact that we have already analyzed the basis for such action in this industry, reducing the need for a detailed analysis for every recurrence.

In emergency situations that could adversely affect health, safety, security or the environment, the Customs Port Director, in its role as representative of the FTZ Board, may allow zone merchandise to be moved to a location outside the zone boundary, provided that the FTZ staff is notified and the procedures described above to modify the zone boundary are initiated within five business days.

Please call us if you have any questions.