CPA makes stand on land fees for trade zone

The proposed Free Trade Zone Authority may designate sites within the property owned by the Commonwealth Ports Authority but revenue generated from the leases should go to CPA.

This was the recommendation made by CPA legal counsel Jose dela Cruz to the Office of the Governor in connection with the drafting of the Free Trade Zone legislation.

According to Dela Cruz, the Free Trade Zone Authority may only get royalty that should be assessed based on the gross revenue derived by the business enterprise operating within the trade zones.

“The FTZ Authority may own, develop and lease out real property, but it cannot legally own property owned by CPA,” said Dela Cruz. He emphasized that the Federal Aviation Administration Grant Assurances agreed to by all sponsors require the ports authority to maintain a fee and rental structure which will make the airport self-sustaining as possible under the circumstances existing at the particular airport.

The Free Trade Zone task force is looking at the possibility of using the CPA property near the airport for the initial phase of the project. Such concept, patterned after the Philippines and Hawaii will be unveiled in the Economic Conference to be held on Saipan.

CPA is required to maintain a uniform, non-discriminatory rental rate structure for all its tenants, unless the FAA agrees to allow CPA to rent its property within a free trade zone site at a lesser rate.

In listing specific Free Trade Zone sites, the authority must be given the power to declare the specific FTZ sites on a case by case basis, subject to certain statutory requirements. “When an FTZ site is declared, say, within CPA premises, the FTZ industries there would be bound by the FTZ statute and regulations,” he said.

Since the admission of merchandise is almost identical to the U.S. customs law provision on “foreign trade zones,” the task force needs to study whether such U.S. law needs modification and should be tailored to fit the CNMI.

“Is the U.S. version, for example, intended to accommodate U.S. industries, U.S. employees and U.S. raw products and natural resources,” he asked. Dela Cruz reminded the official that the CNMI’s objective is to bring in U.S. and foreign industries, which would very likely require the employment of non-resident workers and not depend on using local, natural resource.

Investors in the CNMI Free Trade Zone would locate here because the incentives which the CNMI government can give is more superior compared to those provided by other countries.