How do you become a foreign-trade zone?
To get foreign-trade zone status:
- Apply Online.
- Designate what type of authority you wish to have (e.g., general purpose, subzones, and production)
- Pay a fee to enter an FTZ.
- Activate your license through the U.S. Customs and Border Protection (CBP).
What kind of activities take place in a foreign-trade zone?
Here is a list of activities that are permitted in an FTZ:
- Product Assembly.
- Product Testing.
- Sampling.
- Package Relabeling and Repackaging.
- Product Manufacturing.
- Product Storage.
- Merchandise Consolidation.
- Breakdown of shipments into separate deliveries.
How many foreign-trade zones are there in the US?
There are over 230 foreign-trade zone projects and nearly 400 subzones in the United States.
How does a foreign-trade zone work?
Foreign-Trade Zones allow companies to bring items onto US soil without paying the duty tax, allowing them to store these goods free of tariff charges, or use parts to manufacture a finished product that can then be exported without the US import/export surcharges.
What is the purpose of a foreign trade zone?
A foreign-trade zone is a designated location in the United States where companies can use special customs procedures that help encourage U.S. activity and value added – in competition with foreign alternatives – by allowing delayed or reduced duty payments on foreign merchandise, as well as other savings.
Who benefits from free trade zones?
Below are some benefits of using an FTZ.
- Deferral, reduction, or elimination of certain duties.
- Relief from inverted tariffs.
- Duty exemption on re-exports.
- Duty elimination on waste, scrap, and yield loss.
- Weekly entry savings.
- Improved compliance, inventory tracking, and quality control.
- Indefinite storage.
What is the goal of free trade zones?
The primary purpose of a free-trade zone is to remove from a seaport, airport, or border those hindrances to trade caused by high tariffs and complex customs regulations.
What is an FTZ warehouse?
A free trade zone (FTZ) warehouse is a facility in an area the U.S. government classifies as being outside of U.S. customs territory, despite a location within the borders of the United States. FTZs are usually located near Customs and Border Protection ports of entry.
Who is in charge of a foreign trade zone?
US Customs and Border Protection
FTZs operate under the oversight and supervision of US Customs and Border Protection, as part of the United States Homeland Security Council. Even though FTZs are considered to be outside the Customs territory of the United States, they are on US soil.
What are the benefits of a foreign trade zone?
What are the Benefits of a Foreign-Trade Zone?
- Duty Exemption.
- Duty Deferral.
- Duty Reduction or Inverted Tariff.
- Merchandise Processing Fee (MPF) Reduction.
- Streamlined Logistics.
- Quota Avoidance.
What are the benefits of foreign trade?
What Are the Advantages of International Trade?
- Increased revenues.
- Decreased competition.
- Longer product lifespan.
- Easier cash-flow management.
- Better risk management.
- Benefiting from currency exchange.
- Access to export financing.
- Disposal of surplus goods.