S.1291 - Containing and Limiting the Extensive Abuses Noticed in Free Trade Zones Act of 2025; CLEAN FTZ Act of 2025 (119th Congress)
Summary
S.1291, the CLEAN FTZ Act of 2025, aims to identify and evaluate the compliance of foreign free trade zones (FTZs) with international standards to combat illicit international trade. The bill mandates the Commissioner of U.S. Customs and Border Protection, in consultation with other federal agencies, to create and maintain a list of non-U.S. FTZs and classify the countries where they are located into tiers based on their compliance with international standards and efforts to counter illicit trade. This classification will determine the level of scrutiny and potential economic sanctions imposed on countries and individuals involved in illicit activities within these zones.
The bill establishes a tiered system (Tier I to Tier IV) to categorize countries based on their compliance and efforts to combat illicit trade. It also provides for assistance to Tier II, Tier III, and Tier IV countries to improve their law enforcement and combat illicit trade. Furthermore, the bill authorizes the President to impose economic sanctions and visa restrictions on foreign persons involved in illicit international trade within these zones.
Finally, the bill includes provisions for periodic reviews of country classifications, a hotline and secure website for reporting illicit trade, and authorization of appropriations to carry out the Act.
Expected Effects
The likely effect of this bill is increased scrutiny and regulation of international free trade zones, potentially reducing illicit trade activities such as trafficking in narcotics, arms, and counterfeit goods. Countries with poorly regulated FTZs may face economic sanctions and visa restrictions, incentivizing them to improve their compliance with international standards. This could lead to a more transparent and secure global trade environment.
American businesses operating in compliant FTZs may see a competitive advantage as illicit activities are curtailed in other zones. Additionally, the establishment of a reporting hotline and website could provide valuable intelligence for law enforcement agencies.
However, the implementation of this act could also strain diplomatic relations with countries that are negatively classified, and increase costs for businesses operating in FTZs due to enhanced compliance requirements.
Potential Benefits
- Reduced illicit international trade, benefiting legitimate businesses and consumers.
- Enhanced national security by curbing the flow of illegal goods and activities.
- Improved international cooperation in combating transnational crime.
- Increased transparency and accountability in free trade zones.
- Potential for economic benefits for countries that improve their compliance and attract legitimate businesses.
Potential Disadvantages
- Potential for strained diplomatic relations with countries classified in lower tiers.
- Increased compliance costs for businesses operating in free trade zones.
- Risk of retaliatory measures from countries subject to sanctions.
- Potential for bureaucratic inefficiencies in implementing and enforcing the regulations.
- Possible negative impact on economic growth in countries heavily reliant on free trade zones that fail to comply.
Constitutional Alignment
The bill appears to align with the US Constitution, particularly Article I, Section 8, which grants Congress the power to regulate commerce with foreign nations. The imposition of economic sanctions and visa restrictions falls under the President's authority to conduct foreign policy, as implied by Article II. The bill does not appear to infringe upon individual liberties or rights protected by the Bill of Rights.
However, the delegation of authority to the Commissioner and other executive branch officials requires careful oversight to ensure that actions taken under this law do not exceed constitutional limits. The due process clause of the Fifth Amendment would require fair procedures in the imposition of sanctions or visa restrictions.
Amendment IV, which protects against unreasonable searches and seizures, is not directly implicated, but the implementation of screening practices should be mindful of these protections.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).