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Subpart A--Scope and Definitions
Subpart B--Foreign-Trade Zones Board
Subpart C--Establishment and Modification of Zone Projects
Subpart D--Manufacturing and Processing Activity--Reviews
Subpart E--Zone Operations and Administrative Requirements
Subpart F--Notice, Hearings, Record and Information
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[Code of Federal Regulations] [Title 15, Volume 2, Parts 300 to 799] [Revised as of January 1, 1998] From the U.S. Government Printing Office via GPO Access [CITE: 15CFR400] [Page 48-65]
TITLE 15--COMMERCE AND FOREIGN TRADE CHAPTER IV--FOREIGN-TRADE ZONES BOARD, DEPARTMENT OF COMMERCE PART 400--REGULATIONS OF THE FOREIGN-TRADE ZONES BOARD
Authority: Foreign-Trade Zones Act of June 18, 1934, as amended (Pub. L. 397, 73rd Congress, 48 Stat. 998-1003 (19 U.S.C. 81a-81u)). Source: 56 FR 50798, Oct. 8, 1991, unless otherwise noted. Subpart A--Scope and Definitions Sec. 400.1 Scope. (a) This part sets forth the regulations, including the rules of practice and procedure, of the Foreign-Trade Zones Board with regard to foreign-trade zones in the United States pursuant to the Foreign-Trade Zones Act of 1934, as amended (19 U.S.C. 81a-81u). It includes the substantive and procedural rules for the authorization of zones and the regulation of zone activity. The purpose of zones as stated in the Act is to ``expedite and encourage foreign commerce, and other purposes.'' The regulations provide the legal framework for accomplishing this purpose in the context of evolving U.S. economic and trade policy, and economic factors relating to international competition. (b) Part 146 of the regulations of the United States Customs Service (19 CFR part 146) governs zone operations, including the admission of merchandise into zones, zone activity involving such merchandise, and the transfer of merchandise from zones. (c) To the extent ``activated'' under Customs procedures in 19 CFR part 146, and only for the purposes specified in the Act (19 U.S.C. 81c), zones are treated for purposes of the tariff laws and Customs entry procedures as being outside the Customs territory of the United States. Under zone procedures, foreign and domestic merchandise may be admitted into zones for operations such as storage, exhibition, assembly, manufacture and processing, without being subject to formal Customs entry procedures and payment of duties, unless and until the foreign merchandise enters Customs territory for domestic consumption. At that time, the importer ordinarily has a choice of paying duties either at the rate applicable to the foreign material in its condition as admitted into a zone, or if used in manufacturing or processing, to the emerging product. Quota restrictions do not normally apply to foreign goods in zones. The Board can deny or limit the [[Page 49]] use of zone procedures in specific cases on public interest grounds. Merchandise moved into zones for export (zone-restricted status) may be considered exported for purposes such as federal excise tax rebates and Customs drawback. Foreign merchandise (tangible personal property) admitted to a zone and domestic merchandise held in a zone for exportation are exempt from certain state and local ad valorem taxes (19 U.S.C. 81o(e)). Articles admitted into zones for purposes not specified in the Act shall be subject to the tariff laws and regular entry procedures, including the payment of applicable duties, taxes, and fees. [56 FR 50798, Oct. 8, 1991; 56 FR 56544, Nov. 5, 1991] Return to Top Sec. 400.2 Definitions. (a) Act means the Foreign-Trade Zones Act of 1934, as amended. (b) Board means the Foreign-Trade Zones Board, which consists of the Secretary of the Department of Commerce (chairman) and the Secretary of the Treasury, or their designated alternates. (c) Customs Service means the United States Customs Service of the Department of the Treasury. (d) Executive Secretary is the Executive Secretary of the Foreign- Trade Zones Board. (e) Foreign-trade zone is a restricted-access site, in or adjacent to a Customs port of entry, operated pursuant to public utility principles under the sponsorship of a corporation granted authority by the Board and under supervision of the Customs Service. (f) Grant of authority is a document issued by the Board which authorizes a zone grantee to establish, operate and maintain a zone project or a subzone, subject to limitations and conditions specified in this part and in 19 CFR part 146. The authority to establish a zone includes the authority to operate and the responsibility to maintain it. (g) Manufacturing, as used in this part, means activity involving the substantial transformation of a foreign article resulting in a new and different article having a different name, character, and use. (h) Port Director is normally the director of Customs for the Customs jurisdictional area in which the zone is located. (i) Port of entry means a port of entry in the United States, as defined by part 101 of the regulations of the Customs Service (19 CFR part 101), or a user fee airport authorized under 19 U.S.C. 58b and listed in part 122 of the regulations of the Customs Service (19 CFR part 122). (j) Private corporation means any corporation, other than a public corporation, which is organized for the purpose of establishing a zone project and which is chartered for this purpose under a law of the state in which the zone is located. (k) Processing, when referring to zone activity, means any activity involving a change in condition of merchandise, other than manufacturing, which results in a change in the Customs classification of an article or in its eligibility for entry for consumption. (l) Public corporation means a state, a political subdivision (including a municipality) or public agency thereof, or a corporate municipal instrumentality of one or more states. (m) State includes any state of the United States, the District of Columbia, and Puerto Rico. (n) Subzone means a special-purpose zone established as an adjunct to a zone project for a limited purpose. (o) Zone means a foreign-trade zone established under the provisions of the Act and these regulations. Where used in this part, the term also includes subzones, unless the context indicates otherwise. (p) Zone grantee is the corporate recipient of a grant of authority for a zone project. Where used in this part, the term ``grantee'' means ``zone grantee'' unless otherwise indicated. (q) Zone operator is a corporation, partnership, or person that operates a zone or subzone under the terms of an agreement with the zone grantee or an intermediary entity, with the concurrence of the Port Director. (r) Zone project means the zone plan, including all of the zone and subzone sites that the Board authorizes a single grantee to establish. (s) Zone site means the physical location of a zone or subzone. [[Page 50]] (t) Zone user is a party using a zone under agreement with the zone grantee or operator. [62 FR 53534, Oct. 15, 1997] Return to Top Subpart B--Foreign-Trade Zones Board Sec. 400.11 Authority of the Board. (a) In general. In accordance with the Act and procedures of this part, the Board has authority to: (1) Prescribe rules and regulations concerning zones; (2) Issue grants of authority for zones and subzones, and approve modifications to the original zone project; (3) Approve manufacturing and processing activity in zones and subzones as described in subpart D of this part; (4) Make determinations on matters requiring Board decisions under this part; (5) Decide appeals in regard to certain decisions of the Commerce Department's Assistant Secretary for Enforcement and Compliance or the Executive Secretary; (6) Inspect the premises, operations and accounts of zone grantees and operators; (7) Require zone grantees to report on zone operations; (8) Report annually to the Congress on zone operations; (9) Restrict or prohibit zone operations; (10) Impose fines for violations of the Act and this part; (11) Revoke grants of authority for cause; and (12) Determine, as appropriate, whether zone activity is or would be in the public interest or detrimental to the public interest. (b) Authority of the Chairman of the Board. The Chairman of the Board (Secretary of the Department of Commerce) has the authority to: (1) Appoint the Executive Secretary of the Board; (2) Call meetings of the Board, with reasonable notice given to each member; and (3) Submit to the Congress the Board's annual report as prepared by the Executive Secretary. (c) Alternates. Each member of the Board will designate an alternate with authority to act in an official capacity for that member. (d) Determinations of the Board. (1) The determination of the Board will be based on the unanimous vote of the members (or alternate members) of the Board. (2) All votes will be recorded. (3) The Board will issue its determination in proceedings under the regulations in the form of a Board order. [56 FR 50798, Oct. 8, 1991, as amended at 62 FR 53535, Oct. 15, 1997 Return to Top Sec. 400.12 Responsibilities and authority of the Executive Secretary. The Executive Secretary has the following responsibilities and authority: (a) Represent the Board in administrative, regulatory, operational, and public affairs matters; (b) Serve as director of the Commerce Department's Foreign-Trade Zones staff; (c) Execute and implement orders of the Board; (d) Arrange meetings and direct circulation of action documents for the Board; (e) Arrange with other sections of the Department of Commerce, Board agencies and other governmental agencies for studies and comments on zone issues and proposals; (f) Maintain custody of the seal, records, files and correspondence of the Board, with disposition subject to the regulations of the Department of Commerce; (g) Issue notices on zone matters for publication in the Federal Register; (h) Determine subzone sponsorship questions as provided in Sec. 400.22(d); (i) Determine whether additional information is needed for evaluation of applications and other requests for decisions under this part, as provided for in various sections of this part, including Secs. 400.24, 400.25, and 400.26; (j) Issue guidelines on information required for subzone applications under Sec. 400.25(a)(6); (k) Determine whether proposed modifications involve major changes under Sec. 400.26(a)(2); [[Page 51]] (l) Determine whether applications meet prefiling requirements under Sec. 400.27(b); (m) Direct processing of applications, including designation of examiners and scheduling of hearings under Secs. 400.27 and 400.32; (n) Authorize minor modifications to zone projects under Sec. 400.27(f); (o) Review changes in sourcing under Sec. 400.28(a)(3); (p) Direct monitoring of zone activity under Sec. 400.31(d); (q) Direct reviews and make recommendations on requests for manufacturing/processing approvals under Sec. 400.32(b); (r) Determine questions of scope under Sec. 400.32(c); (s) Accept rate schedules and determine their sufficiency under Sec. 400.42(b)(3); (t) Review and decide zone rate complaints cases under Sec. 400.42(b)(5); (u) Make recommendations in cases involving questions as to whether zone activity should be prohibited or restricted for public interest reasons, including reviews under Sec. 400.43; (v) Authorize under certain circumstances the return of ``zone- restricted merchandise'' for entry into Customs territory under Sec. 400.44; (w) Authorize certain duty-paid retail trade under Sec. 400.45; (x) Determine the format for the annual reports of zone grantees to the Board and direct preparation of an annual report to Congress from the Board under Sec. 400.46(d); and (y) Designate an acting Executive Secretary. Return to Top Sec. 400.13 Board headquarters. The headquarters of the Board is located within the U.S. Department of Commerce (Herbert C. Hoover Building), Pennsylvania Avenue and 14th Street, NW., Washington, DC 20230, as part of the office of the Foreign- Trade Zones staff. Return to Top Subpart C--Establishment and Modification of Zone Projects Sec. 400.21 Number and location of zones and subzones. (a) Number of zone projects--port of entry entitlement. (1) Provided that the other requirements of this subpart are met: (i) Each port of entry is entitled to at least one zone project; (ii) If a port of entry is located in more than one state, each of the states in which the port of entry is located is entitled to a zone project; and (iii) If a port of entry is defined to include more than one city separated by a navigable waterway, each of the cities is entitled to a zone project. (2) Zone projects in addition to those approved under the entitlement provision of paragraph (a)(1) of this section may be authorized by the Board if it determines that existing project(s) will not adequately serve the public interest (convenience of commerce). (b) Location of zones and subzones--port of entry adjacency requirements. (1) The Act provides that the Board may approve ``zones in or adjacent to ports of entry'' (19 U.S.C. 81b). (2) The ``adjacency'' requirement is satisfied if: (i) A general-purpose zone is located within 60 statute miles or 90 minutes' driving time from the outer limits of a port of entry; (ii) A subzone meets the following requirements relating to Customs supervision: (A) Proper Customs oversight can be accomplished with physical and electronic means; and (B) All electronically produced records are maintained in a format compatible with the requirements of the U.S. Customs Service for the duration of the record period; and (C) The grantee/operator agrees to present merchandise for examination at a Customs site selected by Customs when requested, and further agrees to present all necessary documents directly to the Customs oversight office. Return to Top Sec. 400.22 Eligible applicants. (a) In general. Subject to the other provisions of this section, public or private corporations may apply for a grant of authority to establish a zone project. The board will give preference to public corporations. (b) Public and non-profit corporations. The eligibility of public and non-profit [[Page 52]] corporations to apply for a grant of authority shall be supported by a enabling legislation of the legislature of the state in which the zone is to be located, indicating that the corporation, individually or as part of a class, is authorized to so apply. (c) Private for-profit corporations. The eligibility of private for- profit corporations to apply for a grant of authority shall be supported by a special act of the state legislature naming the applicant corporation and by evidence indicating that the corporation is chartered for the purpose of establishing a zone. (d) Applicants for subzones--(1) Eligibility. The following entities are eligible to apply for a grant of authority to establish a subzone: (i) The zone grantee of the closest zone project in the same state; (ii) The zone grantee of another zone in the same state, which is a public corporation, if the Board, or the Executive Secretary, finds that such sponsorship better serves the public interest; or (iii) A state agency specifically authorized to submit such an application by an act of the state legislature. (2) Complaints. If an application is submitted under paragraph (d)(1) (ii) or (iii) of this section, the Executive Secretary will: (i) Notify, in writing, the grantee specified in paragraph (d)(1)(i) of this section, who may, within 30 days, object to such sponsorship, in writing, with supporting information as to why the public interest would be better served by its acting as sponsor; (ii) Review such objections prior to filing the application to determine whether the proposed sponsorship is in the public interest, taking into account: (A) The complaining zone's structure and operation; (B) The views of State and local public agencies; and (C) The views of the proposed subzone operator; (iii) Notify the applicant and complainants in writing of the Executive Secretary's determination; (iv) If the Executive Secretary determines that the proposed sponsorship is in the public interest, file the application (see Sec. 400.47 regarding appeals to decisions of the Executive Secretary). Return to Top Sec. 400.23 Criteria for grants of authority for zones and subzones. (a) Zones. The Board will consider the following factors in determining whether to issue a grant of authority for a zone project: (1) The need for zone services in the port of entry area, taking into account existing as well as projected international trade related activities and employment impact; (2) The adequacy of the operational and financial plans and the suitability of the proposed sites and facilities, with justification for duplicative sites; (3) The extent of state and local government support, as indicated by the compatibility of the zone project with the community's master plan or stated goals for economic development and the views of State and local public officials involved in economic development. Such officials shall avoid commitments that anticipate outcome of Board decisions; (4) The views of persons and firms likely to be affected by proposed zone activity; and (5) If the proposal involves manufacturing or processing activity, the criteria in Sec. 400.31. (b) Subzones. In reviewing proposals for subzones the Board will also consider: (1) Whether the operation could be located in or otherwise accommodated by the multi-purpose facilities of the zone project serving the area; (2) The specific zone benefits sought and the significant public benefit(s) involved supported by evidence to meet the requirement in Sec. 400.31(c); and (3) Whether the proposed activity is in the public interest, taking into account the criteria in Sec. 400.31. Return to Top Sec. 400.24 Application for zone. (a) In general. An application for a grant of authority to establish a zone project shall consist of a transmittal letter, an executive summary and five exhibits. (b) Letter of transmittal. The transmittal letter shall be currently dated and signed by an authorized officer of the [[Page 53]] corporation and bear the corporate seal. (c) Executive summary. The executive summary shall describe: (1) The corporation's legal authority to apply; (2) The type of authority requested from the Board; (3) The proposed zone site and facilities and the larger project of which the zone is a part; (4) The project background, including surveys and studies; (5) The relationship of the project to the community's and state's overall economic development plans and objectives; (6) The plans for operating and financing the project; and (7) Any additional pertinent information needed for a complete summary description of the proposal. (d) Exhibits. (1) Exhibit One (Legal Authority for the Application) shall consist of: (i) A certified copy of the state enabling legislation described in Sec. 400.22; (ii) A copy of pertinent sections of the applicant's charter or organization papers; and (iii) A certified copy of the resolution of the governing body of the corporation authorizing the official signing the application. (2) Exhibit Two (Site Description) shall consist of: (i) A detailed description of the zone site, including size, location, address, and a legal description of the area proposed for approval; a table with site designations shall be included when more than one site is involved; (ii) A summary description of the larger project of which the zone is a part, including type, size, location and address; (iii) A statement as to whether the zone is within or adjacent to a customs port of entry; (iv) A description of zone facilities and services, including dimensions and types of existing and proposed structures; (v) A description of existing or proposed site qualifications including: land-use zoning, relationship to flood-plain, infrastructure, utilities, security, and access to transportation services; (vi) A description of current activities carried on in or contiguous to the project; (vii) If part of a port facility, a summary of port and transportation services and facilities; if not, a summary description of transportation systems indicating connections from local and regional points of arrival to the zone; and (viii) A statement as to the possibilities and plans for zone expansion. (3) Exhibit Three (Operation and Financing) shall consist of: (i) A statement as to site ownership (if not owned by the applicant or proposed operator, evidence as to their legal right to use the site); (ii) A discussion of the operational plan (if the zone or a portion thereof is to be operated by other than the grantee, a summary of the selection process used or to be used, the type of operation agreement and, if available, the name and qualifications of the proposed operator); (iii) A brief explanation of the plans for providing facilities, physical security, and for satisfying the requirements for Customs automated systems; (iv) A summary of the plans for financing capital and operating costs, including a statement as to the source and use of funds; and (v) The estimated time schedule for construction and activation. (4) Exhibit Four (Economic Justification) shall include: (i) A statement of the community's overall economic goals and strategies in relation to those of the region and state; (ii) A reference to the plan or plans on which the goals are based and how they relate to the zone project; (iii) An economic profile of the community including identification and discussion of dominant sectors in terms of percentage of employment or income, area resources and problems, economic imbalances, unemployment rates, area foreign trade statistics, and area port facilities and transportation networks; (iv) A statement as to the role and objective of the zone project, and a justification for each of the proposed sites; [[Page 54]] (v) A discussion of the anticipated economic impact, direct and indirect, of the zone project, including references to public costs and benefits, employment, U.S. international trade, and environmental impact; (vi) A statement as to the need for zone services in the community, with information on surveys of business, and specific expressions of interest from proposed zone users, with letters of intent from those firms that are considered prime prospects; and (vii) A description of proposed manufacturing and processing operations, if applicable, with information covering the factors described in Sec. 400.31(b), including the nature and scope of the operation and production process, materials and components used, items to be foreign sourced with relevant tariff information, zone benefits anticipated and how they will affect the firm's plans, and the economic impact of the operation on the community and on related domestic industries. (5) Exhibit Five (Maps) shall consist of: (i) The following maps and drawings: (A) State and county maps showing the general location of the zone in terms of the area's transportation network; (B) A local community map showing in red the location of the proposed zone; and (C) A detailed blueprint of the zone or subzone area showing zone boundaries in red, with dimensions and metes and bounds, or other legal description, and showing existing and proposed structures. (ii) Proposals involving existing zones shall include a drawing showing existing zone sites and the proposed changes. (e) Additional information. The Board or the Executive Secretary may require additional information needed to adequately evaluate a proposal. (f) Amendment of application. The Board or the Executive Secretary may allow amendment of the application. (g) Drafts. Applicants may submit a draft application to the Executive Secretary for review. (h) Format and number of copies. Unless the Executive Secretary alters the requirements of this paragraph, submit an original and 8 copies of the application on 8\1/2\" x 11" (216 x 279 mm) paper. Exhibit Five of the original application shall contain full-sized maps, and copies shall contain letter-sized reductions. (i) Where to file. Address and mail the application to the Secretary of Commerce, Attention: Executive Secretary, Foreign-Trade Zones Board, U.S. Department of Commerce, Pennsylvania Avenue and 14th Street, NW., Washington, DC 20230. (Approved by the Office of Management and Budget under control number 0625-0139) [56 FR 50798, Oct. 8, 1991, as amended at 62 FR 53535, Oct. 15, 1997] Return to Top Sec. 400.25 Application for subzone. (a) In general. An application to establish a subzone as part of a proposed or existing zone shall be submitted in accordance with the format in Sec. 400.24, except that the focus of the information provided in Exhibit Four shall be on the specific activity involved and its net economic effect. The information submitted in Exhibit Four shall include: (1) A summary as to the reasons for the subzone and an explanation of its anticipated economic effects; (2) Identity of the subzone user and its corporate affiliation; (3) Description of the proposed activity, including: (i) Products; (ii) Materials and Components; (iii) Sourcing plans (domestic/foreign); (iv) Tariff rates and other import requirements or restrictions; (v) Information to assist the Board in making a determination under Secs. 400.31(b)(1)(iii) and 400.31(b)(2); (vi) Benefits to subzone user; (vii) Information required in Sec. 400.24(d)(4)(vii); (viii) Information as to whether alternative procedures have been considered as a means of obtaining the benefits sought; (ix) Information on the industry involved and extent of international competition; and (x) Economic impact of the operation on the area; [[Page 55]] (4) Reason operation cannot be conducted within a general-purpose zone; (5) Statement as to environmental impact; and (6) Any additional information requested by the Board or the Executive Secretary in order to conduct the review. The Executive Secretary may issue guidelines as to the kind of detailed information needed for various types of subzone cases. (b) Burden of proof. An applicant for a subzone must demonstrate to the Board that the proposed operation meets the criteria in Sec. 400.23(b). (Approved by the Office of Management and Budget under control number 0625-0139) Return to Top Sec. 400.26 Application for expansion or other modification to zone project. (a) In general. (1) A grantee may apply to the Board for authority to expand or otherwise modify its zone project. (2) The Executive Secretary, in consultation with the Port Director, will determine whether the proposed modification involves a major change in the zone plan and is thus subject to paragraph (b) of this section, or is minor and subject to paragraph (c) of this section. In making this determination the Executive Secretary will consider the extent to which the proposed modification would: (i) Substantially modify the plan originally approved by the Board; or (ii) Expand the physical dimensions of the approved zone area as related to the scope of operations envisioned in the original plan. (b) Major modification to zone project. An application for a major modification to an approved zone project shall be submitted in accordance with the format in Sec. 400.24, except that: (1) Reference may be made to current information in an application from the same applicant on file with the Board; and (2) The content of Exhibit Four shall relate specifically to the proposed change. (c) Minor modification to zone project. Other applications or requests under this subpart, including those for minor revisions of zone boundaries, grant of authority transfers, or time extensions, shall be submitted in letter form with information and documentation necessary for analysis, as determined by the Executive Secretary, who shall determine whether the proposed change is a minor one subject to this paragraph (c) instead of paragraph (b) of this section (see, Sec. 400.27(f)). (d) Applications for other revisions to grants of authority. Applications or requests for revisions to grants of authority, such as restriction modifications, shall be submitted in letter form with information and documentation necessary for analysis, as determined by the Executive Secretary. If the change involves removal or significant modification of a restriction included by the Board in a grant of authority, the review procedures of Sec. 400.32 shall apply. If not, the procedure set forth in Sec. 400.27(f) shall apply. (Approved by the Office of Management and Budget under control number 0625-0139) [56 FR 50798, Oct. 8, 1991, as amended at 62 FR 53535, Oct. 15, 1997] Return to Top Sec. 400.27 Procedure for processing application. (a) In general. This section outlines the procedure followed in processing applications submitted under Secs. 400.24-400.26. In addition, it sets forth the time schedules which will normally be applied in processing applications. The schedules will provide guidance to applicants with respect to the time frames for each of the procedural steps involved in the Board's review. Under these schedules, applications involving manufacturing or processing activity would be processed within 1 year, and those not involving such activity, within 10 months. While the schedules set forth a standard time frame, the Board may determine that it requires additional time based on special circumstances, such as when the public comment period must be reopened pursuant to paragraphs (d)(2)(v)(B) and (d)(3)(vi)(B) of this section. (b) Prefiling review. Applications subject to Sec. 400.29 shall be accompanied with a check in accordance with that section, and will be dated upon receipt at the headquarters of the Board. The Executive Secretary will determine whether the application satisfies the requirements of Secs. 400.22-400.24, 400.25, [[Page 56]] 400.26, 400.32, and other applicable provisions of this part. (1) If the application is deficient, the Executive Secretary will notify the applicant within 20 days of receipt of the application, specifying the deficiencies. The applicant shall correct the deficiencies and submit the correct application within 30 days of notification. Otherwise, the application (original) will be returned. (2) If the application is sufficient, the Executive Secretary will within 45 days of receipt of the application: (i) Formally file the application, thereby initiating the proceeding or review; (ii) Assign a case docket number in cases requiring a Board order; and (iii) Notify the applicant. (c) Procedure--Executive Secretary responsibilities. After initiating a proceeding based on an application under Secs. 400.24- 400.25, or 400.26(b), the Executive Secretary will: (1) Designate an examiner to conduct a review and prepare a report with recommendations for the Board; (2) Publish in the Federal Register a notice of the formal filing of the application and initiation of the review which includes the name of the applicant, a description of the zone project, information as to any hearing scheduled at the outset, and an invitation for public comment, including a time period during which the public may submit evidence, factual information, and written arguments. Normally, the comment period will close 60 days after the date the notice appears, except that, if a hearing is held (see, Sec. 400.51), the period will not close prior to 15 days after the date of the hearing. The closing date for general comment will ordinarily be followed by an additional 15-day period for rebuttal comments; (3) Send copies of the filing and initiation notice and the application to the Commissioner of Customs and the Port Director, or a designee; (4) Arrange for hearings, as appropriate; (5) Transmit the reports and recommendations of the examiner and of the officials identified in paragraph (c)(3) of this section to the Board for appropriate action; and (6) Notify the applicant in writing and publish notice in the Federal Register of the Board's determination. (d) Case reviews--procedure and time schedule--(1) Customs review. The Port Director, or a designee, in accordance with agency regulations and directives, will submit a technical report to the Executive Secretary within 45 days of the conclusion of the public comment period described in paragraph (c)(2) of this section. (2) Examiners reviews--non-manufacturing/processing. Examiners assigned to cases not involving manufacturing or processing activity shall conduct a review taking into account the factors enumerated in Sec. 400.23 and other appropriate sections of this part, which shall include: (i) Conducting or participating in necessary hearings scheduled by the Executive Secretary; (ii) Reviewing case records, including public comments; (iii) Requesting information and evidence from parties of record; (iv) Developing information and evidence necessary for evaluation and analysis of the application in accordance with the criteria of the Act and this part; (v) Preparing a report with recommendations to the Board and submitting it to the Executive Secretary within 120 days of the close of the period for public comment (see, paragraph (c)(2) of this section). (A) If the report is unfavorable to the applicant, it shall be considered a preliminary report and the applicant shall be notified within 5 days (in writing or by phone) and given 30 days from the date of notification in which to respond to the report and submit additional evidence. (B) If the response contains new evidence on which there has not been an opportunity for public comment, the Executive Secretary will publish notice in the Federal Register after completion of the review of the response. The new material will be made available for public inspection and the Federal Register notice will invite further public comment for 30 days, with an additional 15-day period for rebuttal comments. [[Page 57]] (C) The Customs adviser shall be notified when necessary for further comments, which shall be submitted within 45 days after notification. (D) The examiners report in a situation under paragraph (d)(2)(v)(A) of this section shall be completed and submitted to the Executive Secretary within 30 days after receipt of additional evidence or notice from the applicant that there will be none; except that, if paragraph (d)(2)(v)(B) of this section applies, the report will be submitted within 30 days of the close of the period for public comment. (3) Examiners reviews--cases involving manufacturing or processing activity. Examiners shall conduct a review taking into account the factors enumerated in Sec. 400.23, Sec. 400.31, and other appropriate sections of this part, which shall include: (i) Conducting or participating in hearings scheduled by the Executive Secretary; (ii) Reviewing case records, including public comments; (iii) Requesting information and evidence from parties of record; (iv) Developing information and evidence necessary for analysis of the threshold factors and the economic factors enumerated in Sec. 400.31; (v) Conducting an analysis to include: (A) An evaluation of policy considerations pursuant to Secs. 400.31(b)(1)(i) and 400.31(b)(1)(ii); (B) An evaluation of the economic factors enumerated in Secs. 400.31(b)(1)(iii) and 400.31(b)(2), which shall include an evaluation of the economic impact on domestic industry, considering both producers of like products and producers of components/materials used in the manufacture/processing or assembly of the products. The evaluation will take into account such factors as market conditions, price sensitivity, degree and nature of foreign competition, effect on exports and imports, and the net effect on U.S. employment; (vi) Conducting appropriate industry surveys when necessary; and (vii) Preparing a report with recommendations to the Board and submitting it to the Executive Secretary within 150 days of the close of the period for public comment: (A) If the report is unfavorable to the applicant, it shall be considered a preliminary report and the applicant shall be notified (in writing or by phone) and given 45 days from the date of notification in which to respond to the report and submit additional evidence pertinent to the factors considered in the report. (B) If the response contains new evidence on which there has not been an opportunity for public comment, the Executive Secretary will publish notice in the Federal Register after completion of the review of the response. The new material will be made available for public inspection and the Federal Register notice will invite further public comment for 30 days, with an additional 15-day period for rebuttal comments. (e) Procedure--Completion of review--(1) The Executive Secretary will circulate the examiners report with recommendations to Board members for their review and votes (by resolution). (2) The Treasury and Army Board members will return their votes to the Executive Secretary within 30 days, unless a formal meeting is requested (see, Sec. 400.11(d)). (3) The Commerce Department will complete the decision process within 15 days of receiving the votes of both other Board members, and the Executive Secretary will publish the Board decision. (f) Procedure--Application for minor modification of zone project. (1) The Executive Secretary, with the concurrence of the Port Director, will make a determination in cases under Sec. 400.26(c) involving minor changes to zone projects that do not require a Board order, such as boundary modifications, including certain relocations, and will notify the applicant in writing of the decision within 30 days of the determination that the application or request can be processed under Sec. 400.26(c). (2) The Port Director shall provide the decision as to concurrence within 20 days after being notified of the request or application. [56 FR 50798, Oct. 8, 1991, as amended at 62 FR 53535, Oct. 15, 1997] [[Page 58]] Return to Top Sec. 400.28 Conditions, prohibitions and restrictions applicable to grants of authority. (a) In general. Grants of authority issued by the Board for the establishment of zones or subzones, including those already issued, are subject to the Act and this part and the following general conditions or limitations: (1) Approvals from the grantee and the Port Director, pursuant to 19 CFR part 146, are required prior to the activation of any portion of an approved zone project; and (2) Approval of the Board or the Commerce Department's Assistant Secretary for Enforcement and Compliance pursuant to subpart D of this part is required prior to the commencement of manufacturing beyond the scope of that approved as part of the application or pursuant to reviews under this part (e.g., new end products, significant expansions of plant production capacity), and of similar changes in processing activity which involves foreign articles subject to quantitative import controls (quotas) or results in articles subject to a lower (actual or effective) duty rate (inverted tariff) than any of their foreign components. (3) Sourcing changes--(i) Notification requirement. The grantee or operator of a zone or subzone shall notify the Executive Secretary when there is a change in sourcing for authorized manufacturing or processing activity which involves the use of new foreign articles subject to quotas or inverted tariffs, unless-- (A) Entries for consumption are not to be made at the lower duty rate; or (B) The product in which the foreign articles are to be incorporated is being produced for exportation. (ii) Notification procedure. Notification shall be given prior to the commencement of the activity, when possible, otherwise at the time the new foreign articles arrive in the zone or are withdrawn from inventory for use in production. Requests may be made to the Executive Secretary for authority to submit notification of sourcing changes on a quarterly federal fiscal year basis covering changes in the previous quarter. (iii) Reviews. (A) Upon notification of a sourcing change under paragraph (a)(3)(i) of this section, within 30 days, the Executive Secretary will conduct a preliminary review of the changes in relation to the approved activity to determine whether they could have significant adverse effects, taking into account the factors enumerated in Sec. 400.31(b), and will submit a report and recommendation to the Commerce Department's Assistant Secretary for Enforcement and Compliance, who shall determine whether review is necessary. The procedures of Sec. 400.32(b) shall be used in these situations when appropriate. (B) The Board or the Commerce Department's Assistant Secretary for Enforcement and Compliance may, based on public interest grounds, prohibit or restrict the use of zone procedures in regard to the change in sourcing, including requiring that items be placed in privileged foreign status (19 CFR 146.41) upon admission to a zone or subzone. (C) The Executive Secretary shall direct reviews necessary to ensure that activity involved in these situations continues to be in the public interest. (4) Prior to activation of a zone, the zone grantee or operator shall obtain all necessary permits from federal, state and local authorities, and except as otherwise specified in the Act or this part, shall comply with the requirements of those authorities. (5) A grant of authority for a zone or a subzone shall lapse unless the zone project (in case of subzones, the subzone facility) is activated, pursuant to 19 CFR part 146, and in operation not later than five years from: (i) A Board order (authorizing the zone or subzone) issued after November 7, 1991; or (ii) November 7, 1991. (6) A grant of authority approved under this subpart includes authority for the grantee to permit the erection of buildings necessary to carry out the approved zone project subject to concurrence of the Port Director. (7) Zone grantees, operators, and users shall permit federal government officials acting in an official capacity to have access to the zone project and records during normal business hours and under other reasonable circumstances. (8) A grant of authority may not be sold, conveyed, transferred, set over, or [[Page 59]] assigned (FTZ Act, section 17; 19 U.S.C. 81q). Private ownership of zone land and facilities is permitted provided the zone grantee retains the control necessary to implement the approved zone project. Should title to land or facilities be transferred after a grant of authority is issued, the zone grantee must retain, by agreement with the new owner, a level of control which allows the grantee to carry out its responsibilities as grantee. The sale of a zone site or facility for more than its fair market value without zone status could, depending on the circumstances, be subject to section 17 of the Act. (9) A grant of authority will not be construed to make the zone grantee automatically liable for violations by operators, users, or other parties. (b) Additional conditions, prohibitions and restrictions. Other requirements, conditions or restrictions under Federal, State or local law may apply to the zone or subzone authorized by the grant of authority. (c) Revocation of grants of authority. (1) In general. As provided in this section, the Board can revoke in whole or in part a grant of authority for a zone or subzone whenever it determines that the zone grantee or, in the case of subzones, the subzone operator, has violated, repeatedly and willfully, the provisions of the Act. (2) Procedure. When the Board has reason to believe that the conditions for revocation, as described in paragraph (a) of this section, are met, the Board will: (i) Notify the zone or subzone grantee in writing stating the nature of the alleged violations, and provide the grantee an opportunity to request a hearing on the proposed revocation; (ii) Conduct a hearing, if requested or otherwise if appropriate; (iii) Make a determination on the record of the proceeding not earlier than 4 months after providing notice to the zone grantee under paragraph (b)(1) of this section; and (iv) If the Board's determination is affirmative, publish notice of revocation of the grant of authority in the Federal Register. (3) As provided in section 18 of the Act (19 U.S.C. 81r(c)), the zone or subzone grantee may appeal an order of the Board revoking the grant of authority. [56 FR 50798, Oct. 8, 1991; 56 FR 65833, Dec. 19, 1991, as amended at 62 FR 53535, Oct. 15, 1997] Return to Top Sec. 400.29 Application fees. (a) In general. This section sets forth a uniform system of charges in the form of fees to recover some costs incurred by the Foreign-Trade Zones staff of the Department of Commerce in processing the applications listed in paragraph (b) of this section. The legal authority for the fees is 31 U.S.C. 9701, which provides for the collection of user fees by agencies of the Federal Government. (b) Uniform system of user fee charges. The following graduated fee schedule establishes fees for certain types of applications and requests for authority based on their average processing time. Applications combining requests for more than one type of approval are subject to the fee for each category. (1) Additional general-purpose zones (Sec. 400.24; Sec. 400.21(a)(2))................................................. $3,200 (2) Special-purpose subzones (Sec. 400.25): (i) Non-manufacturing/processing or less than three products. 4,000 (ii) Manufacturing/processing--three or more products........ 6,500 (3) Expansions (Sec. 400.26(b))............................... 1,600 (c) Applications submitted to the Board shall include a check drawn on a national or state bank or trust company of the United States or Puerto Rico in the amount called for in paragraph (b) of this section. Uncertified checks must be acceptable for deposit by a Federal Reserve bank or branch. (d) Applicants shall make their checks payable to the U.S. Department of Commerce ITA. The checks will be deposited by ITA into the Treasury receipts account. If applications are found deficient under Sec. 400.27(b)(1), or withdrawn by applicants prior to formal filing, refunds will be made. Return to Top Subpart D--Manufacturing and Processing Activity--Reviews Sec. 400.31 Manufacturing and processing activity; criteria. (a) In general. Pursuant to section 15(c) of the Act (19 U.S.C. 81o(c)), the [[Page 60]] Board has authority to restrict or prohibit zone activity ``that in its judgment is detrimental to the public interest.'' When evaluating zone and subzone manufacturing and processing activity, either as proposed in an application, in a request for manufacturing/processing approval, or as part of a review of an ongoing operation, the Board shall determine whether the activity is in the public interest by reviewing it in relation to the evaluation criteria contained in paragraph (b) of this section. With regard to processing activity, this section shall apply only when the activity involves foreign articles subject to quantitative import controls (quotas) or results in articles subject to a lower duty rate (inverted tariff) than any of their foreign components. Such a review involves consideration of whether the activity is consistent with trade policy and programs, and whether its net economic effect is positive. (b) Evaluation criteria--(1) Threshold factors. It is the policy of the Board to authorize zone activity only when it is consistent with public policy and, in regard to activity involving foreign merchandise subject to quotas or inverted tariffs, when zone procedures are not the sole determining cause of imports. Thus, without undertaking a review of the economic factors enumerated in Sec. 400.31(b)(2), the Board shall deny or restrict authority for proposed or ongoing activity if it determines that: (i) The activity is inconsistent with U.S. trade and tariff law, or policy which has been formally adopted by the Executive branch; (ii) Board approval of the activity under review would seriously prejudice U.S. tariff and trade negotiations or other initiatives; or (iii) The activity involves items subject to quantitative import controls or inverted tariffs, and the use of zone procedures would be the direct and sole cause of imports that, but for such procedures, would not likely otherwise have occurred, taking into account imports both as individual items and as components of imported products. (2) Economic factors. After its review of threshold factors, if there is a basis for further consideration, the Board shall consider the following factors in determining the net economic effect of the activity or proposed activity: (i) Overall employment impact; (ii) Exports and reexports; (iii) Retention or creation of manufacturing or processing activity; (iv) Extent of value-added activity; (v) Overall effect on import levels of relevant products, including import displacement; (vi) Extent and nature of foreign competition in relevant products; (vii) Impact on related domestic industry, taking into account market conditions; and (viii) Other relevant information relating to public interest and net economic impact considerations, including technology transfers and investment effects. (c) Methodology and evidence--(1)(i) The first phase (Sec. 400.31(b)) involves consideration of threshold factors. If an examiner or reviewer makes a negative finding on any of the factors in paragraph (b)(1) of this section in the course of a review, the applicant shall be informed pursuant to Sec. 400.27(d)(3)(vii)(A). When threshold factors are the basis for a negative recommendation in a review of ongoing activity, the zone grantee and directly affected party shall be notified and given an opportunity to submit evidence pursuant to Sec. 400.27(d)(3)(vii)(A). If the Board determines in the negative any of the factors in paragraph (b)(1) of this section, it shall deny or restrict authority for the proposed or ongoing activity. (ii) The process for paragraph (b)(2) of this section involves consideration of the enumerated economic factors, taking into account their relative weight and significance under the circumstances. Previous evaluations in similar cases are considered. The net effect is arrived at by balancing the positive and negative factors and arriving at a net economic effect. (2) Contributory effect. In assessing the significance of the economic effect of the zone activity as part of the consideration of economic factors, and in consideration of whether there is a significant public benefit, the Board may consider the contributory effect zone savings have as an incremental part of [[Page 61]] cost effectiveness programs adopted by companies to improve their international competitiveness. (3) Burden of proof. Applicants for subzones shall have the burden of submitting evidence establishing that the activity does or would result in a significant public benefit, taking into account the factors in paragraph (b) of this section. Applicants for approval of manufacturing or processing in general-purpose zones shall submit evidence regarding the positive economic effects that would result from activity within the zone and may submit evidence and comments as to policy considerations. Both types of applicants are expected to submit information in response to evidence of adverse economic effects during the public comment period. Parties should submit evidence that is probative and substantial in addressing the matter in issue. (d) Monitoring and post-approval reviews--(1) Ongoing zone activity may be reviewed at anytime to determine whether it is in compliance with the Act and regulations, as well as the authority granted by the Board. reviews may also be conducted to determine whether there are changed circumstances that raise questions as to whether the activity is detrimental to the public interest, taking into account the factors enumerated in Sec. 400.31. The Board may prescribe special monitoring requirements in its decisions when appropriate. (2) Reviews may be initiated by the Board, the Commerce Department's Assistant Secretary for Enforcement and Compliance, or the Executive Secretary; or, they may be undertaken in response to requests from parties directly affected by the activity in question and showing good cause. (3) Upon review, if the Board finds that zone activity is no longer in the public interest, taking into account the provisions of Sec. 400.31, it may restrict the activity in question. The appropriateness of a delayed effective date will be considered in such cases. [56 FR 50798, Oct. 8, 1991; 56 FR 56544, Nov. 5, 1991] Return to Top Sec. 400.32 Procedure for review of request for approval of manufacturing or processing. (a) Request as part of application for grant of authority. A request for approval of proposed manufacturing or processing activity may be submitted as part of an application under Secs. 400.24-400.26(a). The Board will review the request taking into account the criteria in Sec. 400.31(b). (b) Request for manufacturing/processing in approved zone or subzone. Prior to the commencement of manufacturing in a zone or subzone involving activity beyond the scope of that which has been previously authorized at the facility (i.e., new end products, significant expansions of plant production capacity), and of similar changes in processing activity that involves foreign articles subject to quotas or inverted tariffs, zone grantees or operators shall request the determination referred to in Sec. 400.31(a) by submitting a request in writing to the Executive Secretary (Sec. 400.28(a)(2)). Such requests shall include the information required by Secs. 400.24(d)(4)(vii) and 400.25. (1) The Commerce Department's Assistant Secretary for Import Administration may make determinations in these cases based upon a review by the FTZ staff and the recommendation of the Executive Secretary, when: (i) The proposed activity is the same, in terms of products involved, to activity recently approved by the Board and similar in circumstances; or (ii) The activity is for export only; or (iii) The zone benefits sought do not involve the election of non- privileged foreign status (19 CFR 146.42) on items involving inverted tariffs; or (iv) The Port Director determines that the activity could otherwise be conducted under Customs bonded procedures. (2) When the informal procedure in paragraph (b)(1) of this section is not appropriate-- (i) The Executive Secretary will: (A) Assign a case docket number and give notice in the Federal Register inviting public comment; (B) Arrange a public hearing, if appropriate; (C) Appoint an examiner, if appropriate, to conduct a review and prepare [[Page 62]] a report with recommendations for the Board; and (D) Prepare and transmit a report with recommendations, or transmit the examiners report, to the Board for appropriate action; and (ii) The Board will make a determination on the requests, and the Executive Secretary will notify the grantee in writing of the Board's determination, and will publish notice of the determination in the Federal Register. (c) Scope determinations. Determinations shall be made by the Executive Secretary as to whether changes in activity are within the scope of related activity already approved for the facility involved under this part. When warranted, the procedures of paragraph (b)(2) of this section will be followed. [56 FR 50798, Oct. 8, 1991, as amended at 62 FR 53535, Oct. 15, 1997] Return to Top Sec. 400.33 Restrictions on manufacturing and processing activity. (a) In general. In approving manufacturing or processing activity for a zone or subzone the Board may adopt restrictions to protect the public interest, health, or safety. The Commerce Department's Assistant Secretary for Enforcement and Compliance may similarly adopt restrictions in exercising authority under Sec. 400.32(b)(1). (b) Restrictions on items subject to antidumping and countervailing duty actions--(1) Board policy. Zone procedures shall not be used to circumvent antidumping (AD) and countervailing duty (CVD) actions under 19 CFR parts 353 and 355. (2) Admission of items subject to AD/CVD actions. Items subject to AD/CVD orders or items which would be otherwise subject to suspension of liquidation under AD/CVD procedures, if they entered U.S. Customs territory, shall be placed in privileged foreign status (19 CFR 146.41) upon admission to a zone or subzone. Upon entry for consumption, such items shall be subject to duties under AD/CVD orders or to suspension of liquidation, as appropriate, under 19 CFR parts 353 and 355. Return to Top Subpart E--Zone Operations and Administrative Requirements Sec. 400.41 Zone operations; general. Zones shall be operated by or under the contractual oversight of zone grantees, subject to the requirements of the Act and this part, as well as those of other federal, state and local agencies having jurisdiction over the site and operation. Zone grantees shall ensure that the reasonable zone needs of the business community are served by their zone projects. The Port Director represents the Board with regard to the zone projects in the district and is responsible for enforcement, including physical security and access requirements, as provided in 19 CFR part 146. [56 FR 50798, Oct. 8, 1991, as amended at 62 FR 53535, Oct. 15, 1997] Return to Top Sec. 400.42 Requirements for commencement of operations in a zone project. (a) In general. The following actions are required before operations in a zone may commence: (1) Approval by the Port Director of an application for activation is required as provided in 19 CFR part 146; and (2) The Executive Secretary will review proposed manufacturing or processing, pursuant to Sec. 400.32, and a zone schedule as provided in this section. (b) Zone schedule. (1) The zone grantee shall submit to the Executive Secretary and to the Port Director a zone schedule which sets forth: (i) Internal rules and for the zone; and (ii) A statement of the rates and charges (fees) applicable to zone users. (2) A zone schedule shall consist of typed, loose-leaf, numbered, letter-sized pages, enclosed in covers, and shall contain: (i) A title page, with information to include: (A) The name of the zone grantee and operator(s); (B) Schedule identification; (C) Site description; (D) Date of original schedule; and (E) Name of the preparer; (ii) A table of contents; [[Page 63]] (iii) Administrative information; (iv) A statement of zone operating policy, rules and regulations, including uniform procedures regarding the construction of buildings and facilities; and (v) A section listing rates and charges for zones and subzones with information sufficient for the Board or the Executive Secretary to determine whether the rates and charges are reasonable based on other like operations in the port of entry area, and whether there is uniform treatment under like circumstances among zone users. (3) The Executive Secretary will review the schedule to determine whether it contains sufficient information for users concerning the operation of the facility and a statement of rates and charges as provided in paragraph (b)(2) of this section. If the Executive Secretary determines that the schedule satisfies these requirements, the Executive Secretary will notify the zone grantee, unless there is a basis for review under paragraph (b)(5) of this section. A copy of the schedule shall be available for public inspection at the offices of the zone grantee and operator. The zone grantee shall send a copy to the Port Director, who may submit comments to the Executive Secretary. (4) Amendments to the schedule shall be prepared and submitted in the manner described in paragraphs (b)(1) through (b)(3) of this section, and listed in the concluding section of the schedule, with dates. (5) A zone user or prospective user showing good cause may object to the zone or subzone fee on the basis that it is not reasonable, fair and uniform, by submitting to the Executive Secretary a complaint in writing with supporting information. The Executive Secretary will review the complaint and issue a report and decision, which will be final unless appealed to the Board within 30 days. The Board or the Executive Secretary may otherwise initiate a review for cause. The factors considered in reviewing reasonableness and fairness, will include: (i) The going-rates and charges for like operations in the area and the extra costs of operating a zone, including return on investment; and (ii) In the case of subzones, the value of actual services rendered by the zone grantee or operator, and reasonable out-of-pocket expenses. [56 FR 50798, Oct. 8, 1991, as amended at 62 FR 53535, Oct. 15, 1997] Return to Top Sec. 400.43 Restriction and prohibition of certain zone operations. (a) In general. After review, the Board may restrict or prohibit any admission of merchandise into a zone project or operation in a zone project when it determines that such activity is detrimental to the public interest, health or safety. (b) Initiation of review. The Board may conduct a proceeding, or the Executive Secretary a review, to consider a restriction or prohibition under paragraph (a) of this section either self-initiated, or in response to a complaint made to the Board by a party directly affected by the activity in question and showing good cause. Return to Top Sec. 400.44 Zone-restricted merchandise. (a) In general. Merchandise which has been given export status by Customs officials (``zone-restricted merchandise''--19 CFR 146.44) may be returned to the Customs Territory of the United States only when the Board determines that the return would be in the public interest. Such returns are subject to the Customs laws and the payment of applicable duties and excise taxes (19 U.S.C. 81c, 4th proviso). (b) Criteria. In making the determination described in paragraph (a) of this section, the Board will consider: (1) The intent of the parties; (2) Why the goods cannot be exported; (3) The public benefit involved in allowing their return; and (4) The recommendation of the Port Director. (c) Procedure. (1) A request for authority to return ``zone- restricted'' merchandise into Customs territory shall be made to the Executive Secretary in letter form by the zone grantee or operator of the zone in which the merchandise is located, with supporting information and documentation. (2) The Executive Secretary will investigate the request and prepare a report for the Board. [[Page 64]] (3) The Executive Secretary may act for the Board under this section in cases involving merchandise valued at 500,000 dollars or less, provided requests are accompanied with a letter of concurrence from the Port Director. [56 FR 50798, Oct. 8, 1991, as amended at 62 FR 53535, Oct. 15, 1997] Return to Top Sec. 400.45 Retail trade. (a) In general. Retail trade is prohibited in zones, except that sales or other commercial activity involving domestic, duty-paid, and duty-free goods may be conducted within an activated zone project under permits issued by the zone grantee and approved by the Board, with the further exception that no permits shall be necessary for sales involving domestic, duty-paid or duty-free food and non-alcoholic beverage products sold within the zone or subzone for consumption on premises by persons working therein. The Port Director will determine whether an activity is retail trade, subject to review by the Board when the zone grantee requests such a review with a good cause. (b) Procedure. Requests for Board approval under this section shall be submitted in letter form, with supporting documentation, to the Port Director, who is authorized to act for the Board in these cases, subject to the concurrence of the Executive Secretary. (c) Criteria. In evaluating requests under this section, the Port Director and the Executive Secretary will consider: (1) Whether any public benefits would result from approval; and (2) The economic effect such activity would have on the retail trade outside the zone in the port of entry area. [56 FR 50798, Oct. 8, 1991; 57 FR 2319, Jan. 21, 1992, as amended at 62 FR 53535, Oct. 15, 1997] Return to Top Sec. 400.46 Accounts, records and reports. (a) Zone accounts. Zone accounts shall be maintained in accordance with generally accepted accounting principles, and in compliance with the requirements of Federal, State or local agencies having jurisdiction over the site or operation. (b) Records and forms. Zone records and forms shall be prepared and maintained in accordance with the requirements of the Customs Service and the Board, and the zone grantee shall retain copies of applications it submits to the Board. (c) Maps and drawings. Zone grantees or operators, and Port Directors, shall keep current layout drawings of approved sites as described in Sec. 400.24(d)(5), showing activated portions, and a file showing required approvals. The zone grantee shall furnish necessary maps to the Port Director. (d) Annual reports. (1) Zone grantees shall submit annual reports to the Board at the time and in the format prescribed by the Executive Secretary, for use by the Executive Secretary in the preparation of the Board's annual report to the Congress. (2) The Board shall submit an annual report to the Congress. (Approved by the Office of Management and Budget under control number 0625-0109) [56 FR 50798, Oct. 8, 1991, as amended at 62 FR 53535, Oct. 15, 1997] Return to Top Sec. 400.47 Appeals to the Board from decisions of the Assistant Secretary for Enforcement and Compliance and the Executive Secretary. (a) In general. Decisions of the Assistant Secretary for Import Administration and the Executive Secretary made pursuant to Secs. 400.22(d)(2)(ii), 400.32(b)(1), 400.44(c)(3), and 400.45(b)(2) may be appealed to the Board by adversely affected parties showing good cause. (b) Procedures. Parties appealing a decision under paragraph (a) of this section shall submit a request for review to the Board in writing, stating the basis for the request, and attaching a copy of the decision in question, as well as supporting information and documentation. After a review, the Board will notify the complaining party of its decision in writing. Return to Top Subpart F--Notice, Hearings, Record and Information Sec. 400.51 Notice and hearings. (a) In general. The Executive Secretary will publish notice in the Federal Register inviting public comment on applications docketed for Board action (see, Sec. 400.27(c)), and with [[Page 65]] regard to other reviews or matters considered under this part when public comment is necessary. Applicants shall give appropriate notice of their proposals in local newspapers. The Board, the Secretary, the Commerce Department's Assistant Secretary for Enforcement and Compliance, or the Executive Secretary, as appropriate, may schedule and/or hold hearings during any proceedings or reviews conducted under this part whenever necessary or appropriate. (b) Requests for hearings--(1) A directly affected party showing good cause may request a hearing during a proceeding or review. (2) The request must be made within 30 days of the beginning of the period for public comment (see, Sec. 400.27) and must be accompanied by information establishing the need for the hearing and the basis for the requesting party's interest in the matter. (3) A determination as to the need for the hearing will be made by the Commerce Department's Assistant Secretary for Enforcement and Compliance within 15 days after the receipt of such a request. (c) Procedure for public hearings. The Board will publish notice in the Federal Register of the date, time and location of a hearing. All participants shall have the opportunity to make a presentation. Applicants and their witnesses shall ordinarily appear first. The presiding officer may adopt time limits for individual presentations. Return to Top Sec. 400.52 Official record; public access. (a) Content. The Executive Secretary will maintain at the location stated in Sec. 400.53(d) an official record of each proceeding within the Board's jurisdiction. The Executive Secretary will include in the official record all factual information, written argument, and other material developed by, presented to, or obtained by the Board in connection with the proceeding. The official record will contain material that is public, business proprietary, privileged, and classified. While there is no requirement that a verbatim record shall be kept of public hearings, the proceedings of such hearings shall ordinarily be recorded and transcribed when significant opposition is involved. (b) Opening and closing of official record. The official record opens on the date the Executive Secretary files an application or receives a request that satisfies the applicable requirements of this part and closes on the date of the final determination in the proceeding or review, as applicable. (c) Protection of the official record. Unless otherwise ordered in a particular case by the Executive Secretary, the official record will not be removed from the Department of Commerce. A certified copy of the record will be made available to any court before which any aspect of a proceeding is under review, with appropriate safeguards to prevent disclosure of proprietary or privileged information. Return to Top Sec. 400.53 Information. (a) Request for information. The Board may request submission of any information, including business proprietary information, and written argument necessary or appropriate to the proceeding. (b) Public information. Except as provided in paragraph (c) of this section, the Board will consider all information submitted in a proceeding to be public information. If the person submitting the information does not agree to its public disclosure, the Board will return the information and not consider it in the proceeding. (c) Business proprietary information. Persons submitting business proprietary information and requesting protection from public disclosure shall mark the cover page ``business proprietary,'' as well as the top of each page on which such information appears. (d) Disclosure of information. Disclosure of public information will be governed by 15 CFR part 4. Public information in the official record will be available for inspection and copying at the Office of the Executive Secretary, Foreign-Trade Zones Board, U.S. Department of Commerce Building, Pennsylvania Avenue and 14th Street, NW., Washington, DC 20230. [[Page 67]]