On May 19, 2016, Integration Point and PointTrade Services, Inc. held a webcast to help attendees learn about best practices in the set-up, implementation, and ongoing management of U.S. foreign-trade zones.  President and CEO of PointTrade Services, Inc., Michael D’Aoust, highlighted the necessary functions and metrics to put in place for your zone program.  

During the webcast, some questions were unanswered due to time constraints. You can view the on-demand webcast here.


If we conduct periodic audits of our zones, do you think that would meet the systems review requirement?  Does Integration Point have a protocol for users to review our systems?

If you conduct periodic audits that validate the five areas described in 19 CFR 146.21(a) and you can document evidence of those audits, you can certify to CBP that the systems review has been conducted through periodic audits throughout the year. You will want to have evidence that you conducted these audits as well as evidence that you addressed any issues identified through these audits.


For the annual inventory check, does that need to be an actual physical inventory?

Pursuant to 19 CFR 146.23(c), an annual physical inventory must be conducted (unless routine cycle counts are conducted). The FTZ Operator must notify CBP in advance of the date and time of the physical inventory – CBP may or may not want to attend.

Pursuant to 19 CFR 146.25, the annual reconciliation is due within 90 days of the end of the zone year. The annual reconciliation must identify any discrepancies, which should be reconciled to align the physical inventory with the inventory records. The FTZ Operator must certify the annual reconciliation has been completed and that the reports are accurate and available to CBP.


Can you mention how to rely on FTZ compliance with extended partners like transloaders, brokers, FF, etc.­?

The FTZ Operator and importer of record (they may or may not be the same entity) are held responsible for ensuring compliance from time of receipt/admission through time of withdrawal/entry. If you rely on brokers, forwarders, etc., you should have a program in place to manage/oversee the declarations they make on your behalf. While using a broker or forwarder demonstrates a level of reasonable care, CBP expects the FTZ Operator and importer of record to supervise/control zone activity.


Can you store "Domestic" merchandise in the activated area of the FTZ OUTSIDE the FTZ inventory?

No, all products are to be stored under FTZ procedures.­

You can store domestic merchandise within the activated area, but if you are using a UIN/Control system (FIFO or FOFI), you will need to record all dual-sourced material when it is domestically sourced in the FTZ inventory; dual-sourced meaning the UIN is sourced from foreign and domestic suppliers. If the UIN is always only domestic, you would not necessarily have to track it through the FTZ inventory control system as long as you can effectively track it within the company’s ERP system.


Are there standard Grantee Fees?  Or at least what is a "reasonable" amount per year as a fee?

Zone fees vary from grantee to grantee.  Grantees must abide by FTZ Board regulations regarding the operation of their zone projects. Rates and charges for all services and privileges within the zone must be fair and reasonable. The Grantee’s level of services may affect the fees they charge. See 15 CFR 400.42 for more information on Grantee rates and charges.

The FTZ Board posts each Grantee’s zone schedule on the FTZ Board’s website. 15 CFR 400.45 provides information regarding complaints related to services as a public utility, including fees as well as uniform treatment.  


What are other companies doing to prepare for managing PGA data?

Companies are working with their brokers (or software providers, if they are self-filing) to prepare for managing PGA data. The FTZ user should be following up to make sure the broker or software provider has all the necessary information to successfully test and file in ACE. CBP posts the PGA message data sets and implementation guides on their website (https://www.cbp.gov/trade/ace/catair).

Companies are identifying/verifying zone merchandise subject to PGA reporting and reviewing the PGA data requirements to determine how to collect and translate that data in the system records. 


Of the risk areas highlighted, what are the most common issues you see in FTZ manufacturing operations?

Unreconciled work order activity.


How are companies collecting all of the required manifest and invoice item detail data elements to report on the e-214? 

Many companies collect manifest and invoice item detail from their brokers, freight forwarders, or possibly from suppliers. They look at who is getting the data, at what point they are getting it, and if they are already keying that data into their systems arranging for them to provide it for the FTZ. IP can establish an interface with those entities to feed the data to the FTZ system or they can upload the data from spreadsheets. Please contact IP for more information on options and costs.