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CLEAN FTZ Act of 2025
4/18/2025, 3:23 AM
Summary of Bill S 1291
The bill aims to ensure that these free trade zones, which are areas within a country where goods can be imported, manufactured, and re-exported without being subject to the country's normal customs procedures, are operating in accordance with international regulations. This is important because free trade zones can be used for illegal activities such as money laundering, smuggling, and counterfeiting.
If passed, the bill would require the US government to conduct regular assessments of foreign free trade zones to determine their compliance with international standards. The results of these assessments would be used to inform US trade policy and decisions regarding trade agreements with countries that have free trade zones. In addition to evaluating compliance, the bill also includes provisions for improving transparency and accountability in foreign free trade zones. This could involve requiring countries to provide more information about the operations of their free trade zones, as well as implementing measures to prevent and punish illegal activities. Overall, the Foreign Free Trade Zones Compliance Act is aimed at promoting fair and legal trade practices in foreign free trade zones, and ensuring that these zones are not being used for illicit purposes.
Congressional Summary of S 1291
Containing and Limiting the Extensive Abuses Noticed in Free Trade Zones Act of 2025 or the CLEAN FTZ Act of 2025
This bill creates a system to classify countries based on compliance with international standards within their free trade zones and establishes related penalties. (Free trade zones are designated areas, typically located at or near ports, that contain production facilities and related infrastructure. Generally, these zones are treated as being outside the customs territory despite being physically located inside the geographic boundaries of countries.)
Specifically, U.S. Customs and Border Protection (CBP) must identify, publish, and update a list of non-U.S. free trade zones that includes the identity, location, and administrators of each zone.
Upon publication of the list of zones, CBP must then publish a classification of the countries in which those zones are located into four tiers based on specified standards (e.g., complying with international standards and countering illicit international trade). CBP must notify the government of each country of the tier to which the country was classified and periodically review the tier classification.
The bill directs CBP to take additional actions with respect to countries classified as tier II, III, or IV, such as creating a hotline for reporting instances of illicit international trade.
The bill also establishes related penalties, such as authorizing the President to impose property- and visa-blocking sanctions on any foreign person that has facilitated or supported illicit international trade within a zone located in a country classified as tier II, III, or IV.
