Review of Oil/Petrochemical Refinery Subzone Activity

Background. The Foreign-Trade Zones Board (the Board) has authorized 81 refinery/petrochemical complexes to conduct crude oil/petrochemical product refining activity under FTZ procedures. In 2000, active refinery/petrochemical subzones requested and were approved an indefinite extension of their NPF authority, which initially had been granted for a five-year period (Board Order 1116, 65 FR 52696, 8/30/2000). NPF authority involves full access to FTZ procedures for export activity and, with regard to products sold in the U.S., the ability to choose the Customs duty rates that apply to certain petrochemical products and refinery by-products (duty-free), by admitting incoming foreign inputs, such as crude oil, in non-privileged foreign status. Such petrochemicals and by-products account for about 20 to 25 percent of refinery activity, on average. [NPF authority does not apply to the foreign inputs used to produce other refinery products, such as gasoline, jet fuel, and heating oil (some 75-80% of output); they would continue to be subject to their normal duty rates.] The extension case involved a comprehensive assessment of zone use by the refinery subzones considering their economic and regulatory circumstances. When the Board extended NPF authority for refinery subzones in September 2000, it noted that the FTZ staff would conduct periodic reviews, as part of its zone monitoring program.

Summary. The industry review will involve an overall industry-wide evaluation of the economic effects of the oil refining industry's use of FTZ procedures. It will address the role zone procedures play in helping the refineries and the industry to improve their international competitive situation, and in encouraging investment in the United States that might otherwise be done abroad.

Public comment on the review is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at one of the following addresses:

1. Submissions Via Express/Package Delivery Services: Foreign-Trade-Zones Board, U.S. Department of Commerce, Franklin Court Building—Suite 4100W, 1099 14th St. NW., Washington, DC 20005; or

2. Submissions Via the U.S. Postal Service: Foreign-Trade-Zones Board, U.S. Department of Commerce, FCB—Suite 4100W, 1401 Constitution Ave. NW., Washington, DC 20230.

The closing period for their receipt is March 21, 2005.