[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1291 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 1291
To identify and evaluate the compliance of foreign free trade zones
with international standards, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 3, 2025
Mr. Cassidy (for himself and Mr. Whitehouse) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To identify and evaluate the compliance of foreign free trade zones
with international standards, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Containing and Limiting the
Extensive Abuses Noticed in Free Trade Zones Act of 2025''or the
``CLEAN FTZ Act of 2025''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Commissioner.--The term ``Commissioner'' means the
Commissioner of U.S. Customs and Border Protection.
(2) Illicit international trade.--The term ``illicit
international trade'' means any practice or conduct that--
(A) is prohibited by United States law or in
violation of relevant international standards,
including the guidelines and standards described in
section 4(b)(3); and
(B) relates to production, shipment, receipt,
possession, distribution, sale, or purchase of any
goods, including any practice or conduct intended to
facilitate such activity.
(3) Non-united states free trade zone; zone.--
(A) In general.--The terms ``non-United States free
trade zone'' and ``zone'' mean a designated area within
the customs territory of a foreign country that is
treated for purposes of payment of duties or taxes as
though the area were located outside the customs
territory of that country.
(B) Synonymous terms.--Synonymous terms commonly
used to refer to zones described in subparagraph (A)
include ``free zones'', ``special economic zones'',
``export processing zones'', ``free economic zones'',
and ``freeports''.
(4) Person.--The term ``person'' means an individual or
entity.
SEC. 3. IDENTIFICATION OF INTERNATIONAL FREE TRADE ZONES.
(a) In General.--Not later than 2 years after the date of the
enactment of this Act, the Commissioner, in consultation with the
Secretary of Commerce, the Secretary of State, the Secretary of the
Treasury, and the United States Trade Representative, shall identify
and publish, on a publicly accessible internet website, a list of non-
United States free trade zones that includes the identity, location,
and administrators of each such zone.
(b) Periodic Reviews.--The Commissioner shall review the list of
non-United State free trade zones required by subsection (a) on a
periodic basis, and not less frequently than annually--
(1) to ensure the information included for each zone is
correct;
(2) to add new zones to the list; and
(3) to remove zones no longer in existence from the list.
SEC. 4. CLASSIFICATION OF COUNTRIES INTO TIERS.
(a) In General.--Not later than 180 days after the list of zones
required by section 3 is published, the Commissioner, in consultation
with the Secretary of Commerce, the Secretary of State, the Secretary
of the Treasury, and the United States Trade Representative, shall
publish, on a publicly accessible internet website, a classification of
the countries in which those zones are located into tiers as provided
by this section.
(b) Methodology.--The Commissioner shall base the tier
classification of countries under subsection (a) on the following
standards:
(1) Maintenance of a low level of transnational criminal
activity in illegally trading narcotics, arms, persons,
tobacco, counterfeit consumer goods, commodities, and wildlife
occurring in zones located in a country.
(2) Effective efforts by the government of the country to
counter illicit international trade in zones located in the
country, including the effectiveness of penalties and sanctions
imposed on countering such trade, compliance with United States
and United Nations sanctions regimes, screening practices to
detect illicit goods, and eliminating criminal activities
related to illicit international trade.
(3) The compliance of zones located in the country with the
international guidelines and standards set forth in--
(A) the document of the Organisation for Economic
Co-operation and Development entitled ``Recommendation
on Countering Illicit Trade: Enhancing Transparency in
Free Trade Zones'';
(B) chapter 2 of Specific Annex D of the
International Convention on the Simplification and
Harmonization of Customs Procedures, done at Kyoto,
Japan, on May 18, 1973, as amended by the Protocol of
Amendment, done at Brussels, Belgium, on June 26, 1999
(commonly referred to as the ``Revised Kyoto
Convention'');
(C) the United Nations Convention against
Transnational Organized Crime, done at New York
November 15, 2000, and entered into force September 29,
2003 (TIAS 13127);
(D) the United Nations Convention against Illicit
Traffic in Narcotic Drugs and Psychotropic Substances,
done at Vienna December 20, 1988;
(E) the international standards on combating money
laundering and the financing of terrorism and
proliferation of the Financial Action Task Force;
(F) the United Nations Convention against
Corruption, signed at Merida December 9, 2003;
(G) the Practical Guidance on Free Zones of the
World Customs Organization;
(H) the Agreement on Trade Facilitation of the
World Trade Organization;
(I) the Agreement on Trade-Related Aspects of
Intellectual Property Rights of the World Trade
Organization (commonly referred to as the ``TRIPS
Agreement''); and
(J) best practices and guidelines of multilateral
export control regimes of which the United States is a
member, including practices and guidelines related to
implementation of controls on transit and transshipment
of export-controlled commodities, software, and
technology.
(4) Such other standards as the Commissioner considers
relevant.
(c) Tiers.--The Commissioner, in consultation with the Secretary of
Commerce, the Secretary of State, the Secretary of the Treasury, and
the United States Trade Representative, shall classify each country in
which zones on the list required by section 3 are located into one of
the following 4 tiers:
(1) Countries with zones that fully comply with standards
described in subsection (b) (to be known as ``tier I
countries'').
(2) Countries with zones that do not fully comply with
those standards but are making significant efforts to bring
themselves into compliance with those standards (to be known as
``tier II countries'').
(3) Countries (to be known as ``tier III countries'') with
zones that do not fully comply with those standards and are
making efforts to bring themselves into compliance with those
standards, but--
(A) the volume of goods or type of goods processed
in those zones is significant and the country is not
taking proportional concrete actions; or
(B) there is a failure to provide evidence of
increasing efforts to combat illicit international
trade in those zones from the previous year.
(4) Countries with zones that do not comply with those
standards and are not making efforts to bring themselves into
compliance with those standards (to be known as ``tier IV
countries'').
(d) Publication of Classification Criteria.--The Commissioner shall
publish the assessment criteria and methodology used to classify
countries into the tiers described in subsection (c).
(e) Classification Change.--
(1) Progress in meeting standards.--A tier II, tier III, or
tier IV country may be reclassified as a tier I, tier II, or
tier III country, respectively, if the zones located in the
country show significant progress in complying with the
standards described in subsection (b), as determined by the
Commissioner, in consultation with the Secretary of Commerce,
the Secretary of State, the Secretary of the Treasury, and the
United States Trade Representative.
(2) Decreasing compliance with standards.--A tier I, tier
II, or tier III country may be reclassified as a tier II, tier
III, or tier IV country, respectively, if the zones located in
the country show decreasing compliance with the standards
described in subsection (b), as determined by the Commissioner,
in consultation with the Secretary of Commerce, the Secretary
of State, the Secretary of the Treasury, and the United States
Trade Representative.
(f) Notification to Zones.--Not later than 240 days after
publishing the classification of countries required by subsection (a),
the Commissioner shall notify the government of each country of the
tier to which the country was classified.
(g) Periodic Reviews.--The Commissioner shall review each country
in which zones on the list required by section 3 are located on a
periodic basis, and not less frequently than annually, to determine
whether the country is correctly classified under this section.
SEC. 5. ASSISTANCE WITH RESPECT TO TIER II, TIER III, AND TIER IV
COUNTRIES.
(a) In General.--The Commissioner may provide recommendations and
best practice methodologies to countries classified as tier II, tier
III, or tier IV countries under section 4 to improve the effectiveness
of law enforcement and to combat illicit international trade in the
zones located in those countries.
(b) Foreign Commercial Service Strategy.--The Commissioner shall
consider the list of zones required by section 3 in the development of
strategies regarding the distribution, priorities, and activities of
foreign commercial service officers in countries classified as tier II,
tier III, or tier IV countries under section 4.
(c) Scrutiny Under Sanctions Laws.--The Commissioner shall monitor
countries classified as tier II, tier III, or tier IV countries under
section 4 to determine if the President may impose the measures under
section 6 to ensure greater implementation in the zones located in
those countries of the standards described in section 4(b).
(d) Phone Hotline and Secure Website for Reporting.--The
Commissioner shall establish and maintain a dedicated, publicly
accessible telephone hotline and secure internet website for entities
operating in a zone located in a tier I, tier II, tier III, or tier IV
country to report instances of illicit international trade in that zone
that--
(1) impact or potentially impact their operations; or
(2) may justify reclassification of the country under
section 4(e).
SEC. 6. IMPOSITION OF ECONOMIC SANCTIONS AND VISA RESTRICTIONS WITH
RESPECT TO FACILITATION AND SUPPORT OF ILLICIT
INTERNATIONAL TRADE IN TIER II, TIER III, AND TIER IV
COUNTRIES.
(a) In General.--The President may impose the measures described in
subsection (b) with respect to any foreign person that the President
determines, on or after the date of the enactment of this Act and based
on credible evidence--
(1) has organized, arranged, financed, conducted, or
participated in illicit international trade within a zone
located in a country classified as a tier II, tier III, or tier
IV country under section 4;
(2) has acted as an agent of or on behalf of another
foreign person in facilitating an action leading to illicit
international trade occurring in such a zone;
(3) has materially assisted, sponsored, or provided
financial, material, or technological support for, or goods or
services in support of, illicit international trade occurring
in such a zone; or
(4) has conducted or facilitated corruption or money
laundering occurring in such a zone.
(b) Measures Described.--The measures described in this subsection
are the following:
(1) Blocking of property.--The President may exercise all
of the powers granted to the President under the International
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to the
extent necessary to block and prohibit all transactions in
property and interests in property of a foreign person
described in subsection (a) if such property and interests in
property are in the United States, come within the United
States, or are or come within the possession or control of a
United States person.
(2) Ineligibility for visas, admission, or parole.--
(A) Visas, admission, or parole.--A noncitizen
described in subsection (a) is--
(i) inadmissible to the United States;
(ii) ineligible to receive a visa or other
documentation to enter the United States; and
(iii) otherwise ineligible to be admitted
or paroled into the United States or to receive
any other benefit under the Immigration and
Nationality Act (8 U.S.C. 1101 et seq.).
(B) Current visas revoked.--A noncitizen described
in subparagraph (A) is subject to revocation and
cancellation, in accordance with section 221(i) of the
Immigration and Nationality Act (8 U.S.C. 1201(i)), of
any visa or other entry documentation in the possession
of the noncitizen, regardless of when the visa or other
entry documentation is or was issued.
(c) Implementation; Penalties.--
(1) Implementation.--The President may exercise all
authorities provided under sections 203 and 205 of the
International Emergency Economic Powers Act (50 U.S.C. 1702 and
1704) to carry out this section, including investigating,
regulating, or prohibiting--
(A) any transactions in foreign exchange by any
person, or with respect to any property, subject to the
jurisdiction of the United States;
(B) transfers of credit or payments between, by,
through, or to any banking institution, to the extent
that such transfers or payments involve--
(i) any interest of any foreign country or
national of a foreign country; and
(ii) any person, or with respect to any
property, subject to the jurisdiction of the
United States; and
(C) the importing or exporting of currencies or
securities any person, or with respect to any property,
subject to the jurisdiction of the United States.
(2) Penalties.--Any person that violates, attempts to
violate, conspires to violate, or causes a violation of
subsection (b)(1) or a regulation, license, or order issued to
carry out that subsection shall be subject to the penalties set
forth in subsections (b) and (c) of section 206 of the
International Emergency Economic Powers Act (50 U.S.C. 1705) to
the same extent as a person that commits an unlawful act
described in subsection (a) of that section.
(d) Exception To Comply With United Nations Headquarters Agreement
and Law Enforcement Objectives.--Subsection (b)(2) shall not apply with
respect to a noncitizen if admitting or paroling the noncitizen into
the United States--
(1) would further important law enforcement objectives; or
(2) is necessary to permit the United States to comply with
the Agreement regarding the Headquarters of the United Nations,
signed at Lake Success June 26, 1947, and entered into force
November 21, 1947, between the United Nations and the United
States, or other applicable international obligations of the
United States.
(e) Definitions.--In this section:
(1) Admission; admitted.--The terms ``admission'' and
``admitted'' have the meanings given those terms in section 101
of the Immigration and Nationality Act (8 U.S.C. 1101).
(2) Foreign person.--The term ``foreign person'' means an
individual or entity that is not a United States person.
(3) Noncitizen.--The term ``noncitizen'' means an
individual who is not a citizen or national of the United
States (as defined in section 101 of the Immigration and
Nationality Act (8 U.S.C. 1101)).
(4) United states person.--The term ``United States
person'' means--
(A) an individual who is a United States citizen or
an alien lawfully admitted for permanent residence to
the United States; or
(B) an entity organized under the laws of the
United States or any jurisdiction within the United
States, including a foreign branch of such an entity.
SEC. 7. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated to the
Commissioner, without fiscal year limitation, such sums as may be
necessary to carry out this Act.
(b) Availability of Amounts.--Amounts appropriated pursuant to the
authorization of appropriations under subsection (a) shall remain
available until expended.
(c) Supplement Not Supplant.--Amounts appropriated pursuant to the
authorization of appropriations under subsection (a) shall supplement
and not supplant other amounts available for such purposes.
<all>