Item No: _____7a_supp________
Date of Meeting: __April 12, 2011__

Foreign Trade Zone Briefing
by Linda Styrk
Managing Director - Seaport
April 12, 2011

FOREIGN TRADE ZONE (FTZ)
A U.S. government program created in 1934

A location considered "outside" the U.S.

Used to save money & customs duty on foreign products

U.S. FTZ PROGRAM
Managed by the FTZ Board (FTZB)

Under the Department of Commerce & Treasury

To facilitate trade & competiveness of U.S. companies

WITHIN A FTZ LOCATION
Although FTZ's are located within the U.S., they
are treated as "foreign" or "outside" the U.S.
Goods are received into the FTZ without a
formal customs entry or duties/fees paid
Goods can be manipulated stored, exhibited,
assembled, manufactured, and/or processed
A FTZ maintains/creates jobs in the U.S.
versus in a foreign country by offering
Customs process, duty, and tax savings

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BENEFICIARIES & BENEFITS
Prospective Beneficiaries: warehouse operators,
shippers, manufacturers, 3rd party logistic companies
Prospective Benefits to customers:
Defer customs duties/excise taxes
Store cargo duty free until entry
Reduce processing/entry filing fees
Eliminate duty on re-exported goods
Exempt goods from state/local taxes
Reduce customs duty on goods by
assembling foreign/U.S. components into finished goods

U.S. FTZ LOCATIONS (2008 DATA)
273 General Purpose Zones & 647 Sub-zones




330,000
jobs
11.54% of all U.S. foreign
imports come from FTZs

WASHINGTON FTZ LOCATIONS
13 General Purpose FTZ's and 6 Sub-Zones
# 5   Port of Seattle
# 85  Port of Everett
# 86  Port of Tacoma
# 120 Longview
# 129 Bellingham
# 130 Blaine
# 131 Sumas
# 173 Grays Harbor
# 188 Yakima
# 203 Moses Lake
# 212 Tacoma / Puyallup
# 216 Olympia
# 224 Spokane
Port of Seattle's FTZ authority was granted in 1949
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FTZ Warehouse Models
Three primary models for operating a FTZ warehouse:
The FTZ Authority operates a warehouse directly
The Port used this model at T106-E from 1972-2002
The FTZ Authority hires a third party to operate a FTZ
The Port pursued this model in 2008 without success
The FTZ Authority can designate a customer warehouse
site as a FTZ via a boundary modification
The Port is successfully using this model

ALTERNATIVE SITE FRAMEWORK
U.S. FTZ Program recently added the Alternative Site
Framework (ASF) to expedite application processing
Commission approved our application to reorganize Port of
Seattle's FTZ #5 under the ASF in March 2010
U.S. Dept of Commerce approved FTZ #5 ASF Oct. 2010
Our ASF enables expedited processing of requests to grant
use of the Port's FTZ authority at a specific site.

PORT OF SEATTLE'S FTZ #5
FTZ Authority encompasses 1,391 acres in King County
5 FTZ Sites:
Site 1: 955 acres Seaport
Site 2: 436 acres SeaTac International Airport
Site 3: 80,000 sf Seattle (2 locations)
Site 4: 120,000 sf Kent (1 location)
Site 5: 167,000 sf Woodinville (1 location)
Received $7.9 million in foreign merchandise in FY 2008

FTZ #5 ACTIVITY OCT09-SEP10
Site  Site Name      Size      Status
3   Fairn & Swanson   20,000 sf   Active
3a   Fairn & Swanson   30,000 sf   Active
4   Ozburn Hessey    120,000 sf  Not Activated
5   Wilson/Precor    3.84 acres  Not Activated
Fairn & Swanson moved $6,768,000 in merchandise
handling 37 different items from 33 countries of origin
Main categories received: vessel supplies   $1,160,000
wines & spirits    $2,227,000
Employing 15 persons, 8 of whom are full-time employees

FTZ #5 Boundary Amendment
A request to amend FTZ boundary designation
to include Woodinville (Snohomish County)
Legislation was needed to service a FTZ request
SB5157 passed the House and the Governor
signed on April 5, 2011. It now is law.
This legislation enables the Port to extend FTZ #5
authority to a customer warehouse in Woodinville

FTZ #5 Team & Opportunities
Customer      Size    Location  Category .
Bellegrove Medical   10,000 sf   Redmond   medical supply
Helly Hansen     190,000 sf   Auburn    sporting goods
Cabela's (UPS)      TBD     Auburn     sporting goods
Port of Seattle  Lead       Enterprise Seattle  Lead
Oshu Go, Director         Jeff Marcell
Asia Business Development  President & CEO
Port of Seattle Legal Council: Tom Tanaka
Outside Legal Council: Scott Taylor, Miller & Company

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Enterprise Seattle
"EnterpriseSeattle's mission is to be a "difference-maker" in the
community by growing the jobs and tax base in King County"
by providing customized services
on a confidential basis to help retain
recruit or expand local businesses
In 2011, the Port has committed $100,000 in
support toward Enterprise Seattle's programs
Joe McWilliams, Managing Director, Real Estate, is a
member of Enterprise Seattle's Executive Committee

MARKETING FTZ #5
The Port, and Enterprise Seattle, are actively marketing 
Foreign Trade Zone #5
Your Competitive Edge
The Port of Seattle's Foreign Trade Zone (FTZ) #5 can give
your company a competitive edge and help manage cash
flow by deferring, reducing and in some cases eliminating
customs duties and reducing overall operating costs.
Thank
you!
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