Companies Seek Approval To Expand Manufacturing In U.S. Foreign Trade Zones by Joshua Snead

by King & Spalding
Contact

At least 15 applications have been submitted during 2013 for permission from the Foreign Trade Zones (“FTZ”) Board to commence or expand manufacturing activities in U.S. FTZs. Several such applications have been approved. The companies recently obtaining or applying for authorization to expand their manufacturing activities in existing FTZs include Mitsubishi Power Systems Americas Inc. (“Mitsubishi”) and General Electric Company (“GE”).

Mitsubishi recently obtained approval to add production of gas turbines and related parts for use in power generation applications in the FTZ in Savannah, Georgia, based on Mitsubishi’s January 2012 application. GE recently submitted a “production notification” to the FTZ Board, seeking permission (on an expedited basis) to add production of hybrid electric hot water heaters in the FTZ in Louisville, Kentucky. Both companies already manufacture other products in these FTZs.

FTZs are designated zones within the geographical area of the United States that are supervised by the FTZ Board and U.S. Customs and Border Protection (“CBP”). They are generally considered to be outside the customs territory of the United States. FTZs are intended to provide incentives for investment and employment in the United States that otherwise might take place in other countries. Benefits for manufacturers using FTZs can include “duty deferral” (paying duties when imported goods leave the FTZ and enter the U.S. Customs territory rather than when the goods enter the FTZ) and “inverted tariffs” (having the option to pay a lower duty on manufactured products rather than a higher duty on input products). Both GE and Mitsubishi indicated in their applications to the FTZ Board that such advantages were important in order to compete with imported products.

GE asserted in its notification to the FTZ Board that its additional production would displace imports. Mitsubishi asserted that its additional U.S. production would replace its own imports of products manufactured in Japan. GE anticipates selling all water heaters made in its FTZ facility in the U.S., with the potential for exports from the U.S. in the future, while Mitsubishi anticipates manufacturing gas turbines for sale to both domestic U.S. customers and export customers.

Both companies predicted in their applications to the FTZ Board that this additional manufacturing, if approved, would bring additional jobs to the United States. GE predicted that obtaining requested authorization for additional production would bring 400 additional jobs to its FTZ site, and Mitsubishi predicted that its requested additional manufacturing would bring over 300 additional jobs to its Savannah FTZ site.

The FTZ Board revised its regulations in April 2012, as reported here. One of the FTZ Board’s primary objectives with these revisions was to simplify and in some cases speed up the process of obtaining authorization for new or expanded production activity in an FTZ. Some manufacturers plainly are seeing benefits to expanding their operations in FTZs. The advantages of locating facilities in FTZs -- whether for production or warehousing activity -- are available to companies of all sizes in approximately 250 zones located throughout the United States.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© King & Spalding | Attorney Advertising

Written by:

King & Spalding
Contact
more
less

King & Spalding on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.