REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization

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REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization
NATIONAL ASSOCIATION
         OF FOREIGN-TRADE ZONES

ANNUAL
REPORT
REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization
WELCOME FROM THE NAFTZ BOARD CHAIR & PRESIDENT
2020 NAFTZ ANNUAL REPORT LOOKS BACK ON AN EXCEPTIONALLY CHALLENGING YEAR AND AHEAD TO 2021
This report shares with our members what has been accomplished in the
past year on their behalf, and the association’s full agenda of advocacy,
education, and events planned for the year ahead. The report also tells
the success story of the FTZ program and its growing contributions to
the U.S. economy.
                                                                                       TABLE OF CONTENTS
                                                                                  Our Impact                             4
Founded in 1973, NAFTZ is the collective voice of the FTZ community in
the United States and Puerto Rico. The association represents more than
                                                                               Programs & Education                          10
650 members, including FTZ grantees, operator/user companies, and             Zone Trends & Analysis                          16
service providers.
                                                                            Sector Spotlight: Pharmaceuticals                 19
The mission of NAFTZ is to serve as the FTZ program’s principal             Looking Ahead                                         20
educator and lead advocate in demonstrating the program’s value and
role in the changing political and economic environment of international
                                                                            Policy Agenda                                         22
trade. NAFTZ supports local economic development and the global             Leadership & Staff                                25
competitiveness of its members by disseminating vital information and
                                                                             Committee Chairs, Life Members                   26
promoting the expansion of international trade.
                                                                              Past Chairs & Lifetime Achievement             27
The 2020 NAFTZ Annual Report documents the work we have
done to advance that mission. Notwithstanding the considerable                  Financials                               28
challenges we have faced this year, NAFTZ continued to provide                     Get Involved                     29
exceptional educational and informative programs focused on FTZs and
                                                                                        Appendix: FTZs Defined 30
international trade topics. Hosted by NAFTZ, these events included

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                                                                                                                                  2020 Annual Report
REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization
the Fundamentals Conference in Lake Buena Vista, Florida in January,         on policy issues impacting the program and stakeholders, including the
      offering comprehensive educational content and the Legislative Summit,       continuing trade-remedies actions, implementation issues in the U.S.-
      in Washington, DC in February, the industry’s premier lobby fly-in           Mexico-Canada Agreement (USMCA), the effect of changes to the Sec.
      event. Then, as the global COVID-19 pandemic hit American shores and         321/de minimis statute on zone distributors, and efforts to address illicit
      travel restrictions were imposed, we quickly pivoted to virtual events for   trade and forced labor. We have also collaborated with U.S. Customs
      both the Spring Seminar and the Annual Conference. We were proud             and Border Protection (CBP) and the U.S. FTZ Board, as well as multiple
      at the success of our virtual conferences and our ability to provide         partner government agencies, to improve the regulation of the program
      informative programming and content, including a record number of            and transitional changes currently underway, particularly on revisions of
      webinars on such topics as the changes occurring in the e214 process         regulations governing the FTZ program, modernization of the processes
      and highlighting the flexibility FTZs brought companies dealing with the     for modifying zone admissions through e214 processing. The FTZ
      supply chain challenges during the year.                                     program and stakeholders will continue to face new opportunities and
                                                                                   challenges in the public policy arena in election year 2021. For NAFTZ’s
      The FTZ program itself continues to deliver measurable benefits in a time    2021 policy agenda, see pp. 22-24.
      of major challenges and uncertainty for the United States. According to
      the most recent U.S. FTZ Board Annual Report to Congress, FTZ exports        With our latest annual report, we hope to convey our pride in what we
      and employment have continued to provide positive impacts to the U.S.        have accomplished in the past year, despite the challenges we’ve all
      economy, as documented in the FTZ trends and analysis section (see           faced, and our hope and expectation for what lies ahead in the new year.
      pp. 16-18).
                                                                                   Best wishes for better times in 2021,
      In Washington, DC, NAFTZ has been a resolute advocate for the
      interests of our members and an ever-more useful, dynamic, and viable
      FTZ program. We have actively lobbied Congress and the Administration
                                                                                   Melissa Irmen, Board Chair        Erik Autor, President

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                                                                                                                                                      2020 Annual Report
REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization
OUR IMPACT IN 2020
        In 2020, NAFTZ continued active lobbing on key advocacy
        objectives. NAFTZ had an active lobbying schedule throughout the year
        with Members of Congress and staff. These included 15 Hill visits in
        conjunction with February’s legislative summit and regular calls and WebEx
        meetings once limitations on in-person visits were imposed. These efforts    •   U.S.-Mexico-Canada Agreement (USMCA). The North American
        focused particularly on Members of the Senate Finance and House Ways             Free Trade Agreement (NAFTA) and its implementing legislation each
        and Means Committees, which have jurisdiction over the FTZ program,              contained a harmful provision that prevented companies in U.S. FTZs
        and Congressional Leadership to discuss policy and legislative issues of         from taking advantage of the intended benefits of both NAFTA and the
        importance to program and stakeholders, including the following:                 FTZ program and handicapped their ability to compete with Canadian
        •   Trade-action duties/FTZs for America Act. Working closely with               and Mexican products in the North American market. The first of
            Senators John Cornyn (R-TX), Tom Carper (D-DE), and other Senate             these restrictions prohibited FTZs from eligibility under the NAFTA
            allies, NAFTZ made considerable progress in the effort to address            rules of origin to claim preferential duty treatment for products
            the inequitable tariff treatment between U.S.-based manufacturers            manufactured in a zone for U.S. consumption, termination of which
            located inside and outside an FTZ — specifically the improper                has been a long-standing NAFTZ policy goal. Early in 2020, Congress
            assessment of duties on FTZ merchandise under various trade actions          passed legislation to implement the USMCA and repeal the NAFTA
            (Sections 201, and 301) due to the way country of origin data is             Implementation Act, including the rule-of-origin restriction. However,
            reported on FTZ entries, and the inconsistent and conflicting ways           the U.S. Trade Representative’s Office (USTR) subsequently claimed
            these duties are being applied to subject merchandise in privileged-         the ROO repeal was inadvertent and pressed Congress to restore
            foreign (PF) status when the duty rate is changed or terminated while        the original NAFTA restriction for the USMCA through a technical-
            the merchandise is in an FTZ but prior to entry. NAFTZ’s legislative         corrections bill. Working closely with Sen. Cornyn (R-TX) and a
            solution, the “FTZs for America Act,” is in final form and we lined          bipartisan group of Senators, NAFTZ launched a vigorous campaign
            up a lead sponsor and several co-sponsors for introduction of the            to oppose this action, which succeeded in stalling, but ultimately not
            legislation in Congress at the earliest opportunity in 2021.                 preventing inclusion of the ROO language in the technical corrections

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                                                                                                                                                       2020 Annual Report
REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization
bill. However, this effort did succeed in significantly raising                 to include this proposal in a bill he is sponsoring to prevent trade in
            awareness of the NAFTZ and issues impacting the FTZ program                     products made with the forced labor of Uyghur Muslims in Xinjiang
            in Congress, the Administration, and media. It also helped create               Province China. More broadly, NAFTZ has continued its engagement
            a core group of FTZ allies, particularly in the Senate; and secured             in the international initiative led by the Organization for Economic
            a commitment from the Ranking Member of the House Ways and                      Cooperation and Development (OECD) in collaboration with the
            Means Committee, Rep. Kevin Brady (R-TX) to work with Cornyn on                 World Free Zones Organization (WFZO), and the World Customs
            a stand-alone FTZ bill in 2021.                                                 Organization (WCO) to address the illicit-trade problem in certain
                                                                                            foreign free zones. We have used this forum to explain how the U.S.
        •   321/de minimis. NAFTZ continued to work through the Ship Safe
                                                                                            FTZ program can serve as an example of good compliance practices for
            Coalition (formerly the 321 Coalition) in support of amendments
                                                                                            zone programs in other countries combatting the illicit-trade problem.
            to the FTZ Act and Sec. 321 to allow duty-free shipments of “de
            minimis” merchandise (valued under $800) from warehouses in U.S.            •   Revising FTZ Regulations (Parts 146 and 400). Although faced
            zones into the domestic market as is currently allowed for imports              with an unpredictable political environment and little agency activity
            from other countries. We continued to make the case that addressing             on promulgating and revising regulations, NAFTZ continued to discuss
            this issue is critical for FTZ distributors, who face a serious threat to       our draft proposals with CBP and FTZ Board to update regulations
            their ability to maintain ecommerce fulfillment operations and jobs in          governing the FTZ program. The CBP regulations have not undergone
            the United States, and to help lower the risk of illicit trade entering         a substantive update since 1986 and FTZ Board regulations since
            the U.S. market through ecommerce channels.                                     2012. Treatment of FTZ merchandise under duties imposed through
                                                                                            trade actions, elimination of the “five-day” rule, zone-to-zone
        •   Illicit trade. NAFTZ has become increasingly engaged on the problem
                                                                                            transfers, and direct delivery are key issues with CBP and scope of
            of illicit trade, which includes importation of products violating U.S.
                                                                                            production authority with the FTZ Board.
            laws on health, safety, the environment/conservation, forced/child
            labor, and protection of intellectual-property rights (IPR). To position    •   Partner Government Agencies (PGAs) and the Automated
            the FTZ program as an effective tool in the fight against illicit trade,        Commercial Environment (ACE). NAFTZ continued work on several
            NAFTZ submitted a proposal to CBP to allow targeted merchandise                 issues relating to the ongoing effort to build out the ACE compliance
            to be stored securely in an FTZ under Customs supervision during the            software platform. This included submission of comments and
            pendency of a decision whether the goods may be allowed into U.S.               questions to CBP about the transition of e214 admissions filings
            commerce. NAFTZ also worked with Sen. Marco Rubio (R-FL) –                      into ACE and continued work with partner government agencies,

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                                                                                                                                                           2020 Annual Report
REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization
particularly Fish & Wildlife and NHTSA, in the transition of PGA       NAFTZ membership in 2020. NAFTZ membership in 2020 was also
             compliance data into the ACE platform. Related issues under            adversely impacted by the pandemic with 654 total members at the end
             discussion included ACE funding and the treatment of direct delivery   of the membership year on September 30. This was slightly above our
             by those PGAs requiring compliance data submission prior to zone       adjusted target of 650, but 59 below our all-time membership record
             admission remain ongoing issues.                                       set the previous year. We nonetheless considered this to be a positive
                                                                                    result as it was only about 20 memberships below the normal average
         •   In-bond regulations. NAFTZ continued work on in-bond issues,
                                                                                    of around 675, membership numbers were kept at, or very close to
             including CBP interim guidance on the amount required for FTZ
                                                                                    the 2019 figures in every key membership category except Grantee
             operator bonds.
                                                                                    Designated and Op/User Additional, and the financial shortfall in dues
         NAFTZ’s 2020 conferences. Like many associations, NAFTZ’s                  revenue was limited.
         2020 conferences program was severely disrupted by the pandemic,
                                                                                    FTZs continued to drive U.S. exports and employment per the
                                    necessitating changing the Spring Seminar
                                                                                    U.S. Foreign-Trade Zones Board Annual Report to Congress
                                         and Annual Conference to virtual
                                                                                    released in December 2020 covering calendar year 2019.
                                             events. Given the challenges we
                                                faced, we can say that all four     •   In 2019, over 460,000 persons were employed in zones in all 50
                                                  of NAFTZ’s conferences in             States and Puerto Rico.
                                                    2020 were successful, with      •   The largest industries accounting for zones activities in 2019 included
                                                     the Spring Seminar setting         oil refining, automotive, electronics, pharmaceuticals, and machinery/
                                                      new attendance record             equipment.
                                                      for any NAFTZ event,
                                                      strong support from our       •   In 2019, the total number of active FTZs stood at 193, with the
                                                                                        number of active zones’ production operations rising to 348.
                                                      sponsors, and uniformly
                                                      positive feedback from        •   In 2019, both the value of merchandise received at FTZs and the
                                                     participants. For more             value of merchandise exported from FTZs fell slightly from the
                                                   information on these                 previous year despite a strong economy, reflecting the impact of
                                                 programs, please see                   the Trump tariffs and the decline in FTZ activity in the petroleum
                                             pp. 10-15.                                 sector. Of note, 61 percent of all FTZ activities were associated with

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                                                                                                                                                          2020 Annual Report
REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization
manufacturing/ production operations and exports from FTZs totaled        •   Despite the pandemic, NAFTZ experienced active interest from the
            $111 billion dollars.                                                         press and responded to a particularly high number of inquiries from
                                                                                          reporters about the FTZ program, the impact of trade-remedies
        In 2020, NAFTZ communicated important information about the
                                                                                          actions, the USMCA, and the fight against illicit trade. The result was
        program to its members and the public and raised the media profile
                                                                                          the publication of several articles throughout the year, more than
        of the association.
                                                                                          double our usual press coverage, providing NAFTZ considerable media
        •   The monthly Zones Report e-newsletter reached every member with
                                                                                          exposure.
            vital information about the association, the FTZ program, stakeholders,
            and important developments.                                                   •   International Trade Today quoted NAFTZ President, Erik Autor, and
                                                                                              NAFTZ General Counsel, Marshall Miller in a lead article published
        •   Blast emails notified members about a wide-variety of issues impacting
                                                                                              in February entitled “NAFTZ to Ask CPB to Rethink Application of
            the FTZ program, including breaking developments on trade-policy,
                                                                                              Section 301 Tariff Decrease to FTZ Goods”;
            regulatory, and operational issues.
                                                                                          •   Inside U.S. Trade quoted Erik Autor in an article published in
        •   Significant improvements were made to the NAFTZ website to
                                                                                              February entitled “Foreign Trade Zone Association Claims CBP is
            facilitate member communications, including the addition of easily-
                                                                                              Misapplying Tariffs”;
            accessed information on the website links to “Get Involved” and “FTZ
            Resources,” and “Professional Development.”                                   •   International Trade Today quoted Erik Autor in a second lead article
                                                                                              published in February entitled “CBP Says USTR Action Needed to
        •   NAFTZ continued to expand its reach on social-media sites to provide
                                                                                              Change Course on Treatment of Section 301 Goods From FTZs”;
            regular updates and photos. NAFTZ has 1,468 followers on Twitter
            (@naftz), 1,000 on LinkedIn, 315 on Facebook, and 71 on Instagram.            •   International Trade Today published a third article in February
                                                                                              entitled “CBP Discussing Adding FTZ Operators as CTPAT Entity;
        •   The Journal of Commerce published a special section in September
            highlighting the FTZ program. It included articles written by NAFTZ           •   Inside U.S. Trade quoted Erik Autor in an article published in April
                                                                                              entitled “CBP to Postpone Some Duty Payments Amid Pandemic”;
            President, Erik Autor; NAFTZ Executive Committee Member, Shannon
            Fura with co-author Jeremy Page; NAFTZ Board Member, James                    •   CEO Update quoted Erik Autor in an article published in May on
            Grogan; and NAFTZ Advisory Council Member, Lewis Leibowitz.                       NAFTZ’s zone storage initiative entitled “Helping Members With
                                                                                              Creative Strategies for Doing Business”;

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                                                                                                                                                             2020 Annual Report
REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization
•   Inside U.S. Trade quoted Erik Autor and NAFTZ Advisory Committee         •   Politico published a second article in December on the NAFTZ
              member, Lewis Leibowitz, in an article published in May entitled             USMCA issue entitled“ Cornyn Presses Lighthizer to Drop Foreign
              “Companies Operating in Foreign Trade Zones to Gain Preferential             Trade Zone Proposal”;
              Treatment Under USMCA”;                                                  •   International Trade Today quoted Erik Autor in an article published
          •   Inside U.S. Trade published a second article in May reporting on             in December entitled“ Grassley Against FTZ Stance on Technical
              the NAFTZ Virtual Spring Seminar entitled “CBP Official: Very Fast           Corrections.”
              Roll-Out of Tariff Deferral Measure Left Some Importers Behind”;
                                                                                   NAFTZ Leadership.
          •   International Trade Today quoted Erik Autor in a lead article
                                                                                   •   In November, Melissa Irmen of ISCM, Inc. succeeded Frankie Bryson
              published in July entitled “Return to NAFTA Treatment of FTZs May
                                                                                       as NAFTZ Board Chair.
              be in Technical Corrections Bill”;
                                                                                   •   At the November Annual Business Meeting, the NAFTZ membership
          •   Supply Chain Management Review quoted Erik Autor in an article
                                                                                       approved a slate of directors to the NAFTZ Board, including four new
              published in September entitled “FTZ Update: Cross-Border Trade
                                                                                       directors – Patty Cannon of the State of Delaware
              May be New Sweet Spot for Supply Chain Managers”;
                                                                                       FTZ #99 (grantee); Katie Carney of
          •   International Trade Today quoted Erik Autor in a lead article            Livingston Int’l (service provider),
              published in October entitled “NAFTZ Still Pushing Against               Justin Huguet of Mercedes-Benz
              Reinstatement of NAFTA Rules of Origin”;                                 U.S. Int’l, Inc. (operator), and
          •   Politico quoted Erik Autor in an article published in November           Cornelia Steinert of John S.
              entitled “ Lighthizer Move Irks Foreign Trade Zone Operators”;           James (service provider).
          •   Inside U.S. Trade quoted Erik Autor in an article published in       •   Members also endorsed
              December entitled “Senators Urge USTR to Maintain Foreign Trade          a new NAFTZ Executive
              Zone Language in USMCA.”                                                 Committee, which, in
          •   Politico published an article in December on Senate letter to USTR       addition to Chairman
              in support of NAFTZ entitled“ Cornyn Leads Senate Group Opposed          Melissa Irmen, comprises
              to FTZ Tax Hike”;                                                        Shane Williams (Vice Chair),
                                                                                       Shannon Fura (Treasurer), and
                                                                                       James Grogan (Secretary).
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                                                                                                                                                        2020 Annual Report
REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization
NAFTZ continued to build its engagement with domestic and                     •   Outside Conferences. NAFTZ is a founding member of the WFZO
        international partners.                                                           and participated in two virtual WFZO conferences, including its New
                                                                                          World Model Conference in September, with over 3,000 attendees.
        •   Domestic partnerships. NAFTZ maintained mutual promotion
                                                                                          NAFTZ was a virtual exhibitor at this conference and former NAFTZ
            agreements with its sister and allied trade associations – the American
                                                                                          Board Member, Torrey Chambliss (Port Tampa Bay/FTZ #79), was
            Association of Exporters and Importers (AAEI), the American                   a featured program speaker on how zones around the world are
            Petroleum Institute (API), the Inland Rivers Ports and Terminals              addressing current challenges. In October, NAFTZ also participated in
            (IRPT), the International Compliance Professionals Association                the CZFB Barcelona New Economy Week (BNEW) virtual conference
            (ICPA), the National Customs Brokers & Forwarders Association of              with over 10,000 attendees from 111 countries. NAFTZ President,
            America (NCBFAA), and the Inland Rivers Ports and Terminals (IRPT).           Erik Autor, was a panelist with the Chairman of AZFA and the
                                                                                          Secretary-General of the Africa Economic Zone Organization (AEZO)
        •   Global partnerships. This year, NAFTZ also has memoranda of                   to discuss how our respective regions are cooperating more closely
            understanding (MOU) with the World Free Zones Organization                    with zones in other countries and their representative associations
            (WFZO) and the Asociación de Zonas Francas de las Américas (AZFA),            in the areas of commerce, best-practices, compliance, and business
            which provide the framework for our relationship and engagement               promotion. Finally, NAFTZ member, Denise Yanez (City of Phoenix/
            with these international partners. WFZO is the international body             FTZ #75), NAFTZ Board Member, Chris Smith (IKEA Purchasing
            representing free-trade zones throughout the world. AZFA represents           Services), and Erik Autor spoke on a webinar about the FTZ program
                                                                                          as part of the annual conference of the International Economic
            free-trade zones throughout Latin America and Spain. A new
                                                                                          Development Council (IEDC).
            MOU was signed in 2020 with the Consorcio de la Zona Franca de
            Barcelona (CZFB), which expanded NAFTZ’s international network to
            include one of the largest free zones in Europe.

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                                                                                                                                                        2020 Annual Report
REPORT - NATIONAL ASSOCIATION OF FOREIGN-TRADE ZONES - World Free Zones Organization
PROGRAMS & EDUCATION                                                      In addition to the 21 public
                                                                                  webinars, NAFTZ hosted
                                                                                  three event-specific
        ZONECAST WEBINARS                                                         webinars in preparation
        24 webinars hosted in 2020                                                for our conferences
        NAFTZ’s webinar series became a critical resource for the FTZ             and open only to
        community during the pandemic and grew significantly compared to          registrants, which drew
        2019 with continued high interest and participation. Government           a total audience of 104
        officials and industry experts, including representatives of the          for the live events and
        automotive, apparel, consumer goods, pharmaceuticals, and heavy           74 on-demand views.
        equipment sectors, shared their views, experience, and expertise on the
        major topics of interest to the FTZ community. Twenty-one Zonecast        FUNDAMENTALS
        public webinars provided participants information on a wide array of
        issues, including implementation and FTZ-specific issues in the new US-
                                                                                  OF FTZS SEMINAR
                                                                                  January 5-6, 2020
        Mexico-Canada Agreement (USMCA); forced labor and trade remedies
                                                                                  Lake Buena Vista, Florida
        compliance issues for FTZs; FTZ regulatory issues; and a variety of
                                                                                  89 Attendees
        topics discussing the advantages of FTZs.
                                                                                  NAFTZ held its premier educational conference, the annual
        Free to NAFTZ members to attend live or view in on-demand video           Fundamentals of FTZs Seminar, at Lake Buena Vista, welcoming 89
        archives, the webinars continued to draw sizable audiences – a total      attendees to equal our 2019 record attendance. Panelists included
        of 1,780 at the live events. The webinar on “USMCA Training with          Christine Allen, Director of Workforce Development & FTZ 260 at
        CBP” drew 232 live attendees. Meanwhile, the webinar on “The              Lubbock Economic Development Alliance (LEDA); Polia Comella,
        Ins and Outs of In-Bonds” achieved the highest attendance                 Manager Trade & Customs FTZ Services for Rockefeller Group; and
        rate on record of 97% and 2020 NAFTZ webinars received 926                facilitator Eva Tomlinson, Vice-President, FTZ Strategy, UPS Trade
        on-demand views. NAFTZ featured live polling at 18 webinars and           Management Services, Inc. Presenters provided practical experience and
        continues to produce a majority response rate of over 50 percent to       grantee and operator/user perspectives on FTZ operations. This “nuts
        polling questions, demonstrating strong attendee engagement.

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                                                                                                                                                 2020 Annual Report
and bolts” seminar covered FTZ operational details and regulations
        and best practices in using an FTZ as part of an effective supply-chain     LEGISLATIVE SUMMIT
                                       strategy. At the Sunday Reception,           February 11-12, 2020, Washington, DC                       100 Attendees
                                            attendees were invited to participate   The NAFTZ Legislative Summit is the industry’s premier lobby event
                                               in a charitable event featuring      in Washington. A strong turnout of 100 federal government officials,
                                                  New Horizons Service Dogs and     policy makers, and industry leaders from the foreign-trade zone industry
                                                   provide socialization training   assembled in the nation’s capital to hear about and discuss issues
                                                     to dogs the organization       impacting the FTZ program and stakeholders under the event theme of
                                                      trains to assist veterans     “Championing FTZs in an Election Year.”
                                                      with disabilities and
                                                      children with autism.         Participants received detailed briefings on a wide-range of policy issues
                                                                                    — a Congressional outlook on trade and customs issues from trade
                                                                                    counsels of the House Ways & Means and Senate Finance Committees;
                                                                                    briefings on the USMCA, free-trade agreements (FTAs), and updates
                                                                                    from senior officials with the Foreign-Trade Zones Board, U.S.
                                                                                    Customs and Border Protection (CBP), and the Office of the U.S, Trade
                                                                                    Representative (USTR).

                                                                                    Attendees also heard from two prominent trade policy experts, including
                                                                                    keynote speaker, Jennifer Hillman, Senior Fellow at the Council on
                                                                                    Foreign Relations, whose distinguished career in international trade has
                                                                                    spanned Capitol Hill, USTR, the U.S. International Trade Commission,
                                                                                    the World Trade Organization, a faculty position at Georgetown
                                                                                    University Law Center, and the Center for Strategic and International
                                                                                    Studies. Her presentation provided attendees a thought-provoking
                                                                                    discourse on the current state of trade policy and its implications for the
                                                                                    U.S. economy and global economic leadership.

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                                                                                                                                                       2020 Annual Report
Following the Summit program, attendees were treated to a reception
        on Capitol Hill in the ornate Senate Finance Committee hearing room
        where four Members of Congress were recognized for their support of
        and contributions to the FTZ program. Finance Committee Chairman,
        Sen. Chuck Grassley (R-IA) arrived to accept his NAFTZ Congressional
        Appreciation award from constituent NAFTZ members, Ryan Carroll of
        the Greater Des Moines Partnership and Marty Lenss of the Eastern
        Iowa Airport. Patty Cannon of the State of Delaware FTZ #99 and Bill
        Pfaff of Sussex County Economic Development also had the honor
        of presenting the award to their Senator and Member of the Senate
        Finance Committee, Tom Carper (D-DE). Attendees were thrilled at the
        opportunity to meet these two distinguished Senators in person and
        hear their comments on the importance of international trade and the
        FTZ program to their states and the country. Awards also went to House
        Members, Representatives Brian Higgins (D-NY) and Mike Kelly (R-PA)
        who were unable to attend in person due to official business.

        At the reception, Angie Atwood of the Columbus Regional Airport
        Authority FTZ #138 was also honored as the first recipient of the        offices to discuss NAFTZ policy
        newly established Homer A. Maxey Advocacy Award. Created in              priorities with Members of
        acknowledgement of Homer’s leadership role over his many years with      Congress and staff. Noteworthy
        the NAFTZ to advance many critical reforms in the program, this award    meetings were held with the offices
        is presented to an NAFTZ member for extraordinary support of NAFTZ       of Members of the Senate Finance
        advocacy on behalf of the FTZ program.                                   Committee, Senators John Cornyn
                                                                                 (R-TX), Tim Scott (R-SC), Patrick Toomey
        The following day, NAFTZ President, Erik Autor, and NAFTZ public         (R-PA), Richard Burr (R-NC), and Chairman of the Ways & Means
        affairs advisors, Jim Smith and Brian Hannigan, led a delegation of      Trade Subcommittee, Rep. Earl Blumenauer (D-OR) and seven other
        NAFTZ Board and association members in visits to key Congressional       Democratic and Republican Members of Committee.
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                                                                                                                                             2020 Annual Report
3,300                            VIRTUAL SPRING SEMINAR                           networking events. The conference also saw 402 attendees at one

0 569 32                            May 12-14 & 20-22, 2020
                                                                                    session, setting a new attendance record.

  332
    ,300
                                    569 Attendees                                   The new format allowed us to provide a full program agenda with
                                                                                    guidance and useful information to the FTZ community and the virtual
                                             Themed “FTZs: The Trade Times
                                                                                    platform allowed attendees to see and interact through Q&A with the
            Attendees                             They Are A Changin’,”
                                                                                    speakers. These included FTZ Board Executive Secretary and Staff
                                                    NAFTZ’s Spring Seminar

  569    32
                                                                                    Director, Andrew McGilvray and CBP Executive Director of Cargo and
                                                      was scheduled to take

  3013 13
                                                                                    Conveyance Security, Thomas Overacker, describing their respective
                                                       place in Minneapolis,
                                                                                    agency’s challenges and responses during the pandemic. One particularly
                                                       MN. However,
                                                                                    timely session included a presentation by NAFTZ Board Member,
                                                       the onset of the
                                   Speakers/                                        Katie Tangman, Director of Global Customs and Trade at Columbia
                                 Moderators            pandemic,   required a
                                                                                    Sportswear, on the increase in investigations into products allegedly
                                                      quick pivot to organize
                                                                                    made with forced labor and steps FTZ importers should take in response.

       30                          13
                                                    our first ever virtual
        Hours of Content/
             Events                              conference spanning six            The program also included opportunities for real-time networking,
                            days in mid-May with two-hours of program               chances to win prizes, and concluded with a virtual NAFTZ Comedy
                          content per day.                                          and Trivia Show and musical performances which provided over 100
                                                                                    attendees an afternoon of entertainment.
        Under challenging circumstances, the Virtual Seminar was an
        extraordinarily successful event. With 569 attendees, it set a record
        for attendance at an NAFTZ event, with over three times more
        registrants than our in-person event, and established a model for virtual
        conferences. There were 682 individual registrants, 58 percent of whom
        were non-NAFTZ members; 569 registrants attending at least one live
        session (an 83 percent attendance rate), 32 speakers/ moderators/
        emcees covering 15 different topics, and 13 total hours of content/

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                                                                                                                                                   2020 Annual Report
VIRTUAL ANNUAL CONFERENCE
                                                                                        3,300
        October 27-29 & November 4-6, 2020                       331 Attendees

                                                                                  3,300 331 49
                                                                            3,300 331 49
        The NAFTZ 48th Annual Conference scheduled to be held in Denver also
        had to be reorganized as a virtual event, the first time ever for NAFTZ’s
        largest annual gathering. Thanks to hard
        work, new tech skills, experience from the Spring conference, and the
                                                                                                                                     Attendees
        continued dedication of our incredible members, staff, and NAFTZ

                                                                            331 49 30
        supporters, the six-day event was considered a success. There were

                                                                                              17
        354 registered attendees, with 331 individual registrants attending
        at least one of the six live sessions (a 94 percent attendance rate), 49
        speakers/moderators covering 20 different topics, and 17 total hours of

                                                                                  30 17
        content/networking events.                                                                       Speakers/
                                                                                                         Moderators
        NAFTZ’s policy issues and lobbying activities featured prominently in

                                                                            30                            17
        the agenda, including trade remedy actions under Sections 201, 232,
        and 301; the USMCA; rules and regulations governing the FTZ program;                                                       Hours of Content/
                                                                                                                                        Events
        and efforts to expand duty-free benefits under the Sec. 321/de minimis
        statute to FTZs.
                                                                                    USMCA Center, briefed the audience on USMCA
        The program also featured the customary report on FTZ Board activity        implementation and compliance issues and timeframes.
        from Executive Secretary and Staff Director, Andrew McGilvray, in
        which he noted the Board’s extraordinarily high case load, discussed        During the Legislative & Regulatory Call to Action session, panelists, Erik
        issues related to scope of production authority, and announced the          Autor, Torrey Chambliss, and Brian Hannigan reviewed NAFTZ activity
        expected release of the Annual Report to Congress along the same            to advance association advocacy priorities, including its fight against
        timeframe as the previous year. Queena Fan, Director of the CBP             reinstatement of the NAFTA rule-of-origin restriction on FTZs and the
                                                                                    “FTZs For America Act.”

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                                                                                                                                                       2020 Annual Report
Shortly before conclusion of the Annual Conference, NAFTZ convened        Finally, the event again incorporated more light-hearted fare for
        a virtual Annual Business Meeting on November 5, during which voting      attendees with opportunities for virtual face-to-face networking
        members elected a slate of new of Directors to the NAFTZ Board,           and featuring a pop culture trivia contest the end of week one. An
        including Patricia Cannon of State of Delaware FTZ #99, Katie Carney      encore networking reception followed week two, capped off with a
        of Livingston International, Justin Huguet of Mercedes-Benz U.S. Int’l,   virtual NAFTZ 80’s Trivia Show, combining trivia about NAFTZ as an
        Inc., and Cornelia Steinert of John S. James Co. Members also elected     organization and its key leadership, and pop culture information from
        new officers to the Executive Committee, including James Grogan of        that decade.
        Ernst & Young LLP as Secretary, Shannon Fura of Page Fura P.C. as
        Treasurer, Shane Williams of Port Houston as Vice Chair, and Melissa
        Irmen of ISCM Inc. as Chairman. Service awards were also presented
        to departing Chairman, Frankie Bryson of Nissan North America, and
        outgoing Board Members, Malcolm Appelbe of Lam Research, Torrey
        Chambliss of Port Tampa Bay, and Trudy Huguet of GEODIS USA, Inc.

        We were also able to conduct a virtual charity event. Thanks to the
        generosity of conference attendees, over $1,290 in donations was
        raised in partnership with Mile High United Way aiding local Denver
        Metro food-focused charities.

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                                                                                                                                                   2020 Annual Report
ZONE TRENDS & ANALYSIS
        FTZS CONTINUE TO PLAY AN IMPORTANT
        ROLE IN U.S. EMPLOYMENT AND TRADE
        The Foreign-Trade Zones program remains a significant contributor
        to the U.S. economy in terms of employment and the size and value of         Foreign-status merchandise received into FTZs in 2019 remained at
        trade (both exports and imports), according to the latest annual report of   11.2 percent of all U.S. imports of foreign goods, but the total value fell
        the U.S. Foreign Trade Zones Board to Congress for 2019.                     slightly from 2018 to $279.4 billion. The fact that the foreign-status
                                                                                     merchandise figures were essentially flat for the year was possibly due
        There was a record number of over 460,000 Americans directly working         to the impact of the Trump tariffs on imports from China, the European
        in FTZ activities in 2019, an increase of over four percent from the         Union, and other supplier countries. Also, petroleum’s share of total FTZ
        2018 employment total of approximately 440,000. This increase                foreign-status products saw another significant drop from 24.8 percent
        in employment reflected continued growth in FTZ industry sectors             in 2018 to 13.4 percent as the United States has become more energy
        tempered by the significant increase in duties imposed by the Trump          self-sufficient. Meanwhile, non-petroleum products saw an increase of
        Administration on imports from China and other key trading partners.         nearly one percentage point to 9.6 percent of total U.S. goods imports in
        FTZs continue to play a key role in U.S. production and distribution         2019, which now account for just over four-fifths of all foreign-status
        operations that rely on global supply chains to remain competitive.          merchandise received into FTZs. (See the chart on p. 17.)
        However, there was a 3.2 percent decline in the value of shipments into      Among non-petroleum products, the largest reported percentage
        zones from the record $793 billion in 2018 to $793 billion, of which         increases by industry sector in foreign-status goods received into FTZs
        $466 billion (61 percent) was for production operations and $301 billion     for production operations were pharmaceuticals (+178.9%); stone/
        (39 percent) for warehouse/distribution operations. About 64 percent of      plaster/cement/ceramics (+163.6%); wood/paper/printed articles
        total shipments into the zones ($490 billion) involved domestic-status       (+150%); food products (+66.2%); and machinery/equipment (+41.7%).
        merchandise. Thus, FTZ activities involve a combination of foreign inputs    Meanwhile, the biggest declines among FTZ production operators
        with significant domestic content.                                           were rail cars, parts & equipment (-68.4%); plastic/rubber (-64.2%);

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                                                                                                                                                        2020 Annual Report
oil/petroleum (-38.7%); and petrochemicals (-30.1%). The biggest
                                                                                        percentage increases in foreign-status goods received among
                                                                                        warehouse/distribution operations were ships/boats (+251.5%); railcars,
                     FTZ IMPORTS AS A SHARE OF TOTAL                                    parts and equipment (+115.7%); pharmaceuticals (+86.9%); consumer
                      U.S. GOODS IMPORTS, 1990-2019                                     electronics (+78.5%); and optical, photographic, and medical instruments
                              Other Merchandise               Petroleum                 (+60.4%). Among FTZ warehouse/distribution operators, the biggest
        16%                                                                             declines were chemicals (-90.5%); food products (-72.3%); beverages/
                                                                                        spirits (-62.8%); arms/ammunition (-60%); and oil/petroleum (-38.1%).
        14%
                                                                                        In 2019, the value of goods exported directly from U.S. foreign-trade
        12%                                                                             zones to foreign countries totaled $111 billion (6.7 percent of total U.S.
                                                                                        merchandise exports). This total export figure was a slight drop from the
        10%
                                                                                        previous year’s record of $112 billion, but is actually understated due to
                                                                                        the exclusion of certain indirect exports involving FTZ merchandise that
         8%
                                                                                        is warehoused or undergoes further processing at non-FTZ sites prior
         6%
                                                                                        to export.

                                                                                        Petroleum refining remained the leading FTZ export sector in 2019.
         4%
                                                                                        According to the FTZ Board’s annual report, refineries and petroleum-
         2%
                                                                                        related operations accounted for 14 of the top 25 exporting subzones.
                                                                                        As in previous years, motor vehicles and pharmaceuticals also
         0%                                                                             represented major FTZ export sectors each accounting for five of the
              1990    1994       1998      2002       2006      2010      2014   2019
                                                                                        top 25 exporting subzones.
           Sources: FTZ Board Annual Reports and U.S. Census Bureau.

                                                                                        During 2019, there were 262 approved FTZs; 193 active FTZs, with a
                                                                                        total of 348 active production operations, up by 18 over the previous
                                                                                        year; over 500 subzones; and 3,300 firms actively using FTZs. During
                                                                                        that year, the FTZ Board docketed 77 requests and issued 74 decisions,

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                                                                                                                                                          2020 Annual Report
including reorganization or expansion of 5 zones under the alternative      process enabling FTZ users full use of CBP’s Automated Commercial
        site framework (ASF), and 62 applications and notifications for new         Environment (ACE) software-compliance platform; and updating
        or expanded production authority. Under delegated authority, the FTZ        regulations governing FTZs.”
        Board staff processed 268 additional requests including minor boundary
        modifications and scope determinations.

        “The U.S. FTZ program continues to demonstrate its value to the U.S.
        economy,” said Erik Autor, President of the National Association of                         TOTAL FTZ EXPORTS, 2009-2019 &
        Foreign-Trade Zones. “Companies in many key American industries,                Billions
                                                                                                   PERCENTAGE OF TOTAL U.S. EXPORTS
                                                                                          $120
        including oil refining, automotive, electronics, pharmaceuticals,                                                                                          6.7% 6.7%
        aerospace, and machinery/equipment, gain significant global competitive           $110
                                                                                                                                       6.1%
        advantage by locating their production and distribution operations in             $100
                                                                                                                                                            5.6%
        U.S.-based FTZs, thereby boosting American exports, manufacturing,                 $90
                                                                                                                                              5.6%
                                                                                                                                5.0%                 5.3%
        investment, jobs, and standard of living.”                                         $80
                                                                                                                         4.5%
                                                                                           $70
        However, Autor noted that “the FTZ program remains a work in progress
                                                                                           $60
        as the global economy and technology continue to evolve, creating new                                     3.7%
                                                                                           $50
        opportunities and challenges. In response, NAFTZ’s goal is to ensure the
                                                                                           $40
        continued strength, effectiveness, and future viability of the program                             2.7%
                                                                                                    2.6%
                                                                                           $30
        through our public-policy agenda including: ensuring companies in
        U.S. FTZs can compete on equal terms with their foreign competitors,               $20

        particularly in countries benefitting from free-trade agreements with the          $10

        United States; confirming the proper application on FTZ merchandise                  $0
                                                                                                   2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
        of any additional duties imposed under a special trade action; ensuring                    Sources: FTZ Board Annual Reports and U.S. Census Bureau.
        FTZ e-commerce distribution operations get the same duty-free de
        minimis benefits as foreign competitors; completing the integration

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                                                                                                                                                                          2020 Annual Report
FTZ SECTOR SPOTLIGHT:
        PHARMACEUTICALS
        PFIZER, INC.
        The pharmaceutical industry is a major and rapidly growing user of the     through trade agreements with Europe and other producers of API, the
        U.S. Foreign-Trade Zones Program. Let’s look at what the FTZ program       FTZ program has proved to be an important stopgap measure to keep
        means for one prominent pharmaceutical company that has been leading       American sites competitive, pending more durable solutions such as
        the fight in developing a vaccine for COVID-19.                            multilateral elimination of tariffs.

                                                                                   The FTZ program also played a uniquely important role in 2020 in
        THE FOREIGN TRADE ZONE PROGRAM: THE CASE OF PFIZER                         helping Pfizer prepare for swift distribution of its COVID-19 vaccine
                                       In 2020, the foreign trade zone             and other COVID-related products to US patients. Drug products
                                       program helped Pfizer maintain the cost     cannot be imported into the United States until they are approved by the
                                       competitiveness of its U.S. manufacturing                 U.S. Food and Drug Administration or granted Emergency
                                       footprint, supporting American jobs at                         Use Authorization. Pending approval, Pfizer was
                                       Pfizer-operated FTZs in Kalamazoo,                               able to use the FTZs to hold inventory of vaccine,
        Michigan (FTZ #43) and Pleasant Prairie, Wisconsin (FTZ #41)                                      as well as a new formulation of a drug used to
        as well as at contract manufacturer facilities in Florida and                                      help health care providers treat the symptoms
        elsewhere.1 While the United States has no tariffs on finished                                     of COVID-19 in their patients. By shipping the
        drugs, several Active Pharmaceutical Ingredients are subject                                        product to the FTZs, Pfizer was able to speed
        to a duty of 6.5% when entered into the United States. The                                         delivery of the COVID-19 vaccine to U.S.
        FTZ program enabled Pfizer to manufacture several medicines                                        government-designated sites immediately upon
        at U.S. facilities without incurring an additional duty on the                                   FDA emergency use authorization, saving days of
        inputs – duties that foreign drug manufacturers do not have to pay.                            transit time and reducing uncertainty.
        As other countries, such as Canada, eliminate duties on imported API
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                                                                                       The grantee for FTZ #41 is the Port of Milwaukee and for FTZ #43 the City of Battle Creek.

                                                                                                                                                                                    19

                                                                                                                                                                          2020 Annual Report
LOOKING AHEAD TO 2021
        FTZ BOARD CALENDAR
        •   As in past years, the FTZ Board plans to schedule grantee training
            events in 2021 and has scheduled a series of webinars in January
            and February for FTZ operators and grantees on the procedures for
            submitting annual reports to the FTZ Board (see the Board website for      •   Forced labor will continue to be an emphasis in CBP’s enforcement
            updates and details www.trade.gov/ftz).                                        activity, including the impact on goods admitted to and/or withdrawn
                                                                                           from FTZs.
        •   March 31 is the deadline for all FTZ firms and grantees to report 2020
            zone activity to FTZ Board.                                                •   The FTZ Board will continue to work on new and pending applications,
                                                                                           production notifications and scope of authority requests, and zone
        •   FTZ Board’s 82nd Annual Report to Congress on FTZ Activity in 2020
                                                                                           project approvals.
            will likely be released toward the end of 2021.
                                                                                       •   CBP will continue work (in partnership with NAFTZ) to publishing
        AGENCY & REGULATORY ACTION                                                         further guidance on FTZ operations.

        U.S. Customs and Border Protection and the Foreign-Trade Zones                 •   CBP will continue work to update the FTZ regulations under 19 CFR
        Board could have greater flexibility under the new Administration to               Part 146.
        address new and pending regulatory issues.
                                                                                       •   The FTZ Board may address changes to its regulations under 15 CFR
                                                                                           Part 400 as proposed by NAFTZ.
        •   It is expected that there will be continued filing of trade-remedy cases
            (antidumping, countervailing duties, Sec. 201 safeguards, Sec. 301)        •   CBP could provide clearer guidance on the tariff-treatment to be
            on imported goods but not at the pace or aggressiveness of the past            accorded in trade actions under sections 201 and 301 on products
            four years.                                                                    manufactured in a U.S. FTZ based on the NAFTZ proposed statutory
                                                                                           and regulatory language.

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                                                                                                                                                         2020 Annual Report
ADMINISTRATION & CONGRESSIONAL ACTION                                         EDUCATIONAL PROGRAMS
        •   Being still early in 2021 as of this writing, we are waiting to see who   In addition to our regularly-scheduled events, NAFTZ will continue
            will join former Ways and Means Chief Trade Counsel, Katherine            to host its series of monthly educational webinars on a wide range of
            Tai, and Rhode Island Governor, Gina Raimondo, President Biden’s          topics important to FTZ professionals. The webinars will continue to be
            nominees respectively for USTR and Secretary of Commerce, as              free to NAFTZ members.
            the key players in the new Administration on international trade
            and customs policy. We expect that the Biden Administration and
            Democratic-controlled Congress, with the Senate Finance Committee
                                                                                      NAFTZ SCHEDULED EVENTS
            under the Chairmanship of Sen. Ron Wyden (D-OR), will continue to         Free Virtual Fundamentals of FTZs
            focus on U.S.-China trade relations with a greater emphasis on trade      January 12-14, 2021
            and labor/environment issues. Senate confirmation of Biden’s trade        Virtual Legislative Summit
            team during the first part of the year will provide an opportunity to     February 9-11, 2021
            pose questions to the nominees about the role of the foreign-trade
                                                                                      Virtual Annual Spring Seminar
            zone program in the Biden trade-policy agenda.
                                                                                      May 2-4, 2021
        •   Possible legislative activity on international trade in 2021 include
                                                                                      Annual Conference
            early action by Congress on the Uyghur Forced Labor Prevention Act,
                                                                                      & Exposition
            renewal of the Generalized System of Preferences (GSP) and expired
                                                                                      Sept. 26-29, 2021
            duty suspensions through a miscellaneous trade bill (MTB).
                                                                                      Loews Miami
        •   With many trade issues in play that continue to have a direct impact      Beach Hotel
            on the FTZ program and stakeholders, NAFTZ members will have the          Miami Beach, FL
            opportunity to participate in virtual Congressional visits during the
            February 9-11 Legislative Summit program to highlight the benefits
            of the FTZ program to the U.S. economy and jobs.

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                                                                                                                                                      2020 Annual Report
POLICY AGENDA FOR 2021
        With the start of a new Administration and Congress in 2021, NAFTZ
        is in the process of setting its policy priorities for the year as part of
        its continuing efforts on advocacy on behalf of the FTZ program and
        stakeholders. NAFTZ expects the following policy issues will be included
        in its list of priorities it will focus on this year. (For more information,     USMCA and its implementing legislation. By limiting the ability of FTZ
        please visit the “Get Involved/Advocacy” page on the FTZ website).               manufacturers to export products duty-free to Canada and Mexico
                                                                                         and denying them the benefits of the rules of origin to make those
        1. FTZs For America Act. In 2020, NAFTZ worked closely with Sen.
                                                                                         products more cost-competitive with Canadian and Mexican products
           John Cornyn (R-TX) to complete draft legislative language ending              in the North American market, these restrictions will continue to
           inequitable tariff treatment under various trade-actions (Sections            hinder the ability of U.S. FTZs to achieve their full potential to
           201, 232, 301, etc.) on FTZ-manufactured products, and clarifying             advance the program’s goals. Despite this setback, NAFTZ will
           the proper duty rate to be applied when those tariffs change while            continue to work with our Senate champion, Sen. Cornyn, and Senate
           associated privileged-foreign (PF) status merchandise is in zone              allies to address these issues in the 117th Congress.
           inventory. NAFTZ will continue to work with Cornyn’s office to
           get the legislation, entitled the “FTZs For America Act” introduced         3. Illicit Trade/Forced Labor. Preventing illicit trade from entering
           early in the new Congress with a strong group of cosponsors. An               the U.S. market, especially products made with forced labor, is a
           opportunity to move the legislation may present itself later this year        growing concern and challenge for every industry importing into
           if Congress decides to take up a larger trade bill to renew the expired       the United States. NAFTZ will continue to work with Congress, the
           Generalized System of Preferences (GSP) program and temporary                 Administration, the Organization for Economic Cooperation and
           duty suspensions.                                                             Development (OECD), the World Customs Organization (WCO), and
                                                                                         the World Free Zones Organization (WFZO) on legislation, such as
        2. United States-Mexico-Canada Agreement (USMCA). Despite our
                                                                                         the “Uyghur Forced Labor Prevention Act,” and international initiatives
           best efforts and work to build a broad bipartisan coalition of support        to develop global policies and best practices that are workable,
           in Congress, two unfair and punitive restrictions on FTZs in the North        manageable, and consider the unique role of FTZs in the global supply
           American Free Trade Agreement (NAFTA) were carried over into the              chain. We will also continue to promote the U.S. FTZ program’s

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                                                                                                                                                         2020 Annual Report
enforcement and compliance system as an effective model and tool to
           help reduce the risk of trade in illicit and forced-labor goods.
        4. 321/de minimis. Changes to U.S. informal-entry rules increasing the
           duty-free de minimis level for imported goods from $200 to $800
           adversely impacted FTZ distribution operations by encouraging a shift
           of e-commerce fulfilment for the U.S. market to Canada, Mexico, and
           other foreign locations. NAFTZ is a participant in an industry group –
           the “Ship Safe Coalition” – seeking legislative changes to address the
           adverse impact of this change by expanding the Sec. 321/de minimis
           procedures to include FTZs. While efforts to address this issue in the
           116th Congress were ultimately unsuccessful for political reasons
           beyond our control, NAFTZ and the Coalition believe there may be
           opportunities to advance the proposal with the new Congress and
           Administration.
        5. Revise Customs Part 146 FTZ regulations/FTZ Manual. Customs
           regulations on FTZs (19 CFR Part 146) have changed little since
           1986. In 2018, NAFTZ relaunched an effort with CBP through the
           Customs Operations Advisory Committee (COAC) to modernize these
           regulations to account fully for the revolution in CBP automation
           as well as sweeping changes in global supply-chain management.
           NAFTZ has worked with CBP and now has a completed working
           draft that would transform the regulations to meet the 21st century
           needs of CBP, the FTZ community, and a more globally-integrated
           U.S. economy. Among other things, NAFTZ seeks to protect and
           expand direct delivery; eliminate the outdated five-day rule and the
           blanket 216 for manufacturing, manipulation, and exhibition; address

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                                                                                    2020 Annual Report
treatment of withhold release order (WRO) merchandise in FTZs;             7. ACE programming for the FTZ e214 admission. A milestone in
           provide for a more-streamlined and automated compliance review               the ITDS single-window initiative occurred in 2017 with integration
           mechanism; and update CBP’s FTZ Manual.                                      of the e214 FTZ admission process from the legacy Automated
                                                                                        Commercial System (ACS) software platform into ACE. The next step
        6. Revise the FTZ Board’s “production scope of authority”
                                                                                        is to add Partner Government Agencies (PGAs) message sets into the
           regulations. Current Foreign Trade Zones Board regulations on
                                                                                        e214 through ACE for those PGAs requiring compliance data for FTZ
           FTZs (15 CFR Part 400) do not allow FTZ operator/user companies
                                                                                        goods before entry from a zone into U.S. Customs territory, while
           sufficient flexibility to quickly modify their approved list of imported
                                                                                        also ensuring the future viability of the FTZ direct-delivery procedure
           components and/or finished products in response to changing
                                                                                        for program stakeholders. NAFTZ continues to work with the PGAs
           demands of global competition. As part of a larger effort to update
                                                                                        and CBP to facilitate this process and adopt a viable compliance
           Part 400, NAFTZ continues to urge the FTZ Board to introduce
                                                                                        process that fulfills the PGAs’ enforcement mandate while minimizing
           changes to allow use of six-digit Harmonized Tariff Schedule (HTS)
                                                                                        unnecessary burdens on FTZ filers.
           numbers to define the scope of production authority (versus the
           current focus on written commercial description), and a retrospective
           notification process to allow companies to maintain full compliance
           and keep assembly lines in operation. NAFTZ seeks a pilot program
           for both concepts, and new regulations where necessary.

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                                                                                                                                                       2020 Annual Report
BOARD OF DIRECTORS & STAFF
        BOARD OF DIRECTORS                                                                                                      STAFF
        CHAIR                                   DIRECTORS
                     Melissa Irmen                          Christine Allen                         Justin Huguet                       Erik Autor
                     Senior Vice President                  Dir. of Workforce Dev. &                Trade Compliance                    President
                     ISCM, Inc.                             FTZ 260, Lubbock Economic               Specialist, Mercedes-Benz
                                                            Development Alliance                    U.S. International

        VICE CHAIR                                          Robert Balli                            Christopher Smith                   Victoria Cartwright
                     Shane Williams                         FTZ Analyst                             Trade Advisor                       Vice President of
                     Economic Development                   Phillips 66                             IKEA Purchasing Services            Events & Education
                     Director                                                                       (US) Inc.
                     Port Houston                           Eric Berry                              Cornelia Steinert                   Jarmila Zapata
        TREASURER                                           Director of Trade Services              Director of Foreign Trade           Director of
                     Shannon Fura                           PointTrade Services, Inc.               Zone Services                       Communications &
                     Partner                                                                        John S. James Co.                   Member Services
                     Page Fura, P.C.                        Renée Boyette                           Katie Tangman                       Melvin Morris
                                                            Administration Officer                  Dir. of Global Customs              Senior Manager
                                                            Triangle J Council of                   & Trade, Columbia                   of Accounting &
        SECRETARY
                                                            Governments                             Sportswear Company                  Administration
                     James Grogan
                     Senior Manager                         Katie Carney                            Michael Thomas
                     Ernst & Young LLP                      Dir., US Brokerage, Foreign             President/Managing
                                                            Trade Zones Services                    Director, Thomas
                                                            Livingston International                International Group
        IMMEDIATE PAST CHAIR
                     Frankie Bryson                         Patricia Cannon               HONORARY DIRECTOR
                     Dir. of Alliance Customs               Dir. of Special Projects                Trey Boring,
                     and Trade, Nissan North                State of Delaware’s                     Sr. Vice President
                     America, Inc.                          Department of State                     IMS Worldwide, Inc.

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                                                                                                                                                     2020 Annual Report
COMMITTEE CHAIRS & HONORARY LIFE MEMBERS
        COMMITTEE CHAIRS                                                          HONORARY LIFE MEMBERS
        CHAIR, ACCREDITATION COMMITTEE   CHAIR, INTERNAL POLICY MANUAL            1979 Homer A. Maxey, Jr., FTZ 9, Honolulu, HI
        Sean Lydon                       COMMITTEE
        President                        Shannon Fura                             1982 Marshall Miller, Esq., Miller & Co.
        ISCM                             Partner
                                                                                  1986 Robert N. Dee, FTZ 2, New Orleans, LA
                                         Page Fura, P.C.
        CHAIR, ADVOCACY COMMITTEE
                                                                                  1988 Joseph O’Connor*, FTZ 44, Mount Olive, NJ
        Torrey Chambliss                 CHAIR, MEMBERSHIP COMMITTEE
        Director, FTZ & Cargo Business   Jessica Rosen                            1993 Dennis J. Curran, Sandler & Travis Trade Advisory Services
        Development                      Director – UPS FTZ Strategy
        Port Tampa Bay                   UPS Zone Solutions                       1995 Tommy L. Berry, PointTrade Services, Inc.

        CHAIR, AUTOMATION COMMITTEE      CHAIR, OPERATOR/USER COMMITTEE           2000 Greg Jones, Foreign-Trade Zone Corporation
        Elizabeth Connell                Robert Yoder
                                                                                  2007 Domenick Gambardella, PricewaterhouseCoopers, LLP
        Senior Director Product          Senior Manager FTZ
        Management                       adidas                                   2007 Karen Sager*, FTZ Consulting LLC
        Thomson Reuters
                                         CHAIR, PETROLEUM COMMITTEE               2008 Donnie Barnes*, BMW Manufacturing Co., LLC
        CHAIR, BYLAWS COMMITTEE          Beverly Cruz
        David Ostheimer                  Trade Compliance Customs Analyst         2008 David Ostheimer, Lamb & Lerch
        Consultant                       Shell Exploration & Production Company
                                                                                  2019 Brandi Hanback, Rockefeller Group
        Lamb & Lerch
                                         CO-CHAIRS, PROGRAM COMMITTEE
        CHAIR, GRANTEE COMMITTEE         Sean Lydon
        David Panko                      President
        Foreign Trade Zone Manager       ISCM
        City of El Paso / El Paso
                                         Jessica Rosen
        International Airport
                                         Director – UPS FTZ Strategy
                                         UPS Zone Solutions

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                                                                                                                                                    2020 Annual Report
PAST BOARD CHAIRS & LIFETIME ACHIEVEMENT AWARDS
        PAST BOARD CHAIRS & PRESIDENTS
        2019-2020 Frankie Bryson, Nissan North America, Inc.             1991-1993 Catherine Durda*, FTZ 49, New York, NY
        2018-2019 Eva Tomlinson, UPS Zone Solutions                      1989-1991 Tommy L. Berry, PointTrade Services, Inc.
        2017-2018 Rebecca Williams, The Rockefeller Group                1987-1989 Dennis J. Curran, Sandler & Travis Trade Advisory Services
        2016-2017 Trey Boring, IMS Worldwide, Inc.                       1985-1987 Roy Jaeger, FTZ 49, Newark, NJ
        2015-2016 Jose Quinonez, Economic Development Department,        1983-1985 Joseph O’Connor*, FTZ 44, Mount Olive, NJ
        		        County of El Paso                                      1981-1983 Robert G. Brave, FTZ 14, Little Rock, AR
        2013-2015 Jan Frantz, BC/CAL/KAL Inland Port Development Corp.   1979-1981 Marshall Miller, Miller & Company, P.C.
        2012-2013 Scott Wienke, Abbvie, Inc.                             1977-1979 Craig J. Rovzar, FTZ 18, San Jose, CA
        2011-2012 Lewis Leibowitz, Hogan Lovells US LLP                  1975-1977 Robert N. Dee, FTZ 2, New Orleans, LA
        2009-2011 Linda C. Hothem, Pacific American Group                1973-1975 Homer A. Maxey, FTZ 9, Honolulu, HI
        2007-2009 Brandi B. Hanback, Rockefeller Group
        2005-2007 Ray E. Shaw, Aligned Border Solutions LLC              LIFETIME ACHIEVEMENT AWARDS
        2003-2005 Phyllis Saathoff, Port Freeport                        2014 Karen Sager*, FTZ Consulting LLC
        2001-2003 Donnie B. Barnes*, LCB BMW Manufacturing Co., LLC      2015 Donnie B. Barnes*, BMW Manufacturing Co., LLC
        1999-2001 Dom Gambardella, PricewaterhouseCoopers, LLP
                                                                         2017 Domenick Gambardella, PricewaterhouseCoopers LLC
        1997-1999 Karen Sager*, FTZ Consulting LLC
                                                                         2018 Tommy L. Berry, PointTrade Services Inc.
        1995-1997 Chris Koelfgen, Foreign-Trade Zone Services
                                                                         2020 Homer A. Maxey, FTZ 9, Honolulu, HI
        1993-1995 Greg Jones, Foreign-Trade Zone Corp.

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                                                                                                                                         2020 Annual Report
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