Foreign Trade Zones by Liz Whiteman
Foreign Trade Zones are specially licensed commercial and industrial areas in or near ports of entry where foreign and domestic goods, including raw materials, components, and finished goods, may be brought in without being subject to payment of customs duties. Goods brought into these zones may be stored, sold, exhibited, repacked, assembled, sorted, graded, cleaned, manufactured, or otherwise manipulated prior to re-export or entry into the country’s customs territory. Goods entering an FTZ are included in General Imports but notImports for Consumption. They are considered Imports for Consumption if they leave the FTZ for domestic consumption.
FTZ Benefits:
- Cost savings (tax relief, lower wage costs)
- Add value to meet Rules of Origin regulations
- Tariff shifts can reduce customs duties (inverted tariffs)
- Duty exemption on re-exports (don’t have to file duty drawbacks)
- Duty elimination on unused merchandise (waste, scrap, and yield loss)
- Weekly entry filing (vs. transactional filings) to save on merchandise processing fees
- Defer customs duties (use as a warehouse) until you have a buyer
LEARN MORE ABOUT FOREIGN TRADE ZONES
