Guam legislators on Monday heard testimony on a bill to create a Guam Free Trade Logistics Zone intended to attract transshipment, manufacturing and re-export activity to the island.

Vice Speaker V. Anthony Ada introduced Bill 174-38 COR, the Guam Free Trade Zone Act of 2025, which would add a new chapter to Title 12, Guam Code Annotated, designate a free trade logistics zone, and appropriate $500,000 to start the program.

Committee members and agency witnesses said the proposal could help diversify Guam’s economy but stressed it needs more legal work, federal coordination and funding for customs enforcement and inspection.

“Ships bring cargo to Guam. They arrive full, but then they leave empty,” Vice Speaker Ada told the committee, summarizing the bill’s aim to use Guam’s geographic position to boost return cargo and reduce shipping costs. The bill would allow goods to be imported, stored, processed and re-exported under a tariff-advantaged regime, with incentives intended to promote investment in industries such as manufacturing, aquaculture and high-tech assembly.

Customs and Quarantine Agency Director Aik Paredo told the committee that Guam operates outside the U.S. customs territory and that any bonded-warehouse, sterile-area or pre-clearance authority must be coordinated with federal counterparts. “It is crucial to understand that the territory of Guam operates outside the customs territory of The United States,” Paredo said, and he repeatedly urged the Legislature to refine the bill to align with federal law and Customs and Border Protection (CBP) practice.

Guam Customs Chief Vincent S. M. Perez said Customs supports the bill’s intent but recommended routing most operational authority and enforcement provisions through chapter 73 of Title 5, Guam Code Annotated (Guam’s customs enabling statute), rather than creating a separate Title 12 framework. Perez recommended a statutory package that would: designate Guam Customs as the lead enforcement authority for bonded transshipment and logistics operations; create licensing, bonding and inspection authorities; allow a customs enforcement revolving fund; and authorize regulations and memoranda of understanding with the Port Authority, Guam International Airport and federal agencies.

Perez warned that implementing a trade logistics zone without a strengthened customs statute would raise security and compliance risks. He told senators the agency currently employs roughly 125 officers, that a fully staffed customs service in Guam would be “anywhere between 200 and 300 officers,” and that operating a new bonded facility would require an additional 25–30 officers. “We need around $2,000,000 just to start up operations in a new area because then you’re gonna need to hire additional people, equipment, supplies, [and] technology,” Perez said.

GEDA officials said the Guam Economic Development Authority supports the bill’s objective to diversify the economy and has been exploring industrial parks and free-trade arrangements. GEDA Business and Economic Development Manager Ed Camacho said the agency has been talking with off‑island investors and is ready to lead land identification, due diligence and incentive discussions. “GEDA supports the bill’s goal of diversifying Guam’s economy through increasing new investment in Guam through export activities,” Matthew Baza of GEDA told the committee.

Committee members pressed witnesses on practical requirements the 2024 transshipment feasibility study had flagged: land availability, infrastructure, workforce development, port-airport connectivity and federal customs approvals. GEDA said the Airport Authority has offered about 25 acres for consideration and the Port Authority is engaged in discussion; GEDA also described conversations with potential firms from Taiwan and Vietnam expressing interest in staging or processing operations in Guam.

Senators and Customs witnesses repeatedly emphasized the need for federal collaboration. Director Paredo and other witnesses said key legal questions remain, including whether federal provisions such as CBP regulations (19 CFR) and HTS headnote 3(a) would apply to goods moving through a Guam zone and how de minimis exemptions would operate for re-exported goods. Paredo said any facility that functioned like a bonded warehouse or a U.S. foreign-trade zone would require CBP involvement and that Guam lacks all of the statutory authorities such a program assumes.

Several senators asked the panel to return with more concrete plans for a regulatory framework, staffing estimates and a federal engagement timeline. The committee chair said the panel would be invited back for a markup that integrates Customs’ recommended statutory language, GEDA’s land-identification work and budgeted start-up funding.

The public hearing for Bill 174-38 was closed after members agreed to continue technical work with the agencies and federal partners before returning a substitute or markup to the committee.

What’s next: The committee will accept written testimony and expects Customs, GEDA and federal CBP representatives to work on a revised bill that embeds customs oversight in Title 5 and identifies a funding plan and staffing timeline for inspections and bonded‑warehouse enforcement.