Who can operate a Foreign Trade Zone?
Any entity can become an activated site or subzone. Most are owned and operated by private businesses through approval and regulation from the federal government.
1. Cash Flow: Defer, reduce or even eliminate duties and fees paid on imported product
There is significant deferral on the average inventory during the first year in the FTZ program
Foreign merchandise in the zone may be re-exported free of duty and federal excise tax
Returns of foreign merchandise to exporters pay no duties on these products
- Value added to merchandise in an FTZ subzone/site is not dutiable
- Certain duty deferral and reduction benefits apply on production equipment
- The insurable value of foreign merchandise in an FTZ subzone/site will not include customs duties already paid, reducing insurance premiums
- Product is not held at the port of entry for customs clearance, often resulting in a one to three day reduction in the supply chain.
- With prior approval by customs, FTZ operators can facilitate the movement of foreign product. Customs officers do not need to be present to break seals or ship products.
FTZ demands accurate reporting to follow foreign merchandise from receipt and processing to shipment for export or entry into U.S. customs territory
Reduces inaccurate inventory, emergency shipments and tracking of import receipts from the point of origin to the final destination. Increased accountability will reduce staff time needed to deal with government regulations
Fungible inventory accounting methods, such as FIFO and FOFI (foreign first), are approved for zone operations
Indicators that your company should consider FTZ include:
You are located in the Huntley area
- You import significant value of product, and/or expect imports to grow
- You re-export a substantial percentage of imports
- You hold significant value of inventory
- Top Five Reasons to become a FTZ
- What is a Foreign Trade Zone?
- FTZ Benefits
- FTZ Criteria
- Process Overview