How do foreign trade zones 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 meant by a foreign trade zone?
Foreign-Trade Zones (FTZ) are secure areas under U.S. Customs and Border Protection (CBP) supervision that are generally considered outside CBP territory upon activation. Located in or near CBP ports of entry, they are the United States’ version of what are known internationally as free-trade zones.
How does a free trade zone work?
A free-trade zone (FTZ) is a class of special economic zone. It is a geographic area where goods may be imported, stored, handled, manufactured, or reconfigured and re-exported under specific customs regulation and generally not subject to customs duty.
What kind of activities take place in a foreign trade zone?
What can be done in a Foreign-Trade Zone? Any merchandise that is not prohibited from entry into the U.S. may generally be admitted into a Zone. Manufacturing, processing and any activity that results in a change of the tariff classification can occur in a Zone but must be specifically approved by the FTZ Board.
What are the benefits of FTZ?
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 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.
How many foreign trade zones are there in the US?
There are 195 active FTZs in the United States. More than 3,300 companies currently utilize the program.
Which document must be created to admit a shipment into a FTZ?
Merchandise may be admitted to a zone under blanket application upon presentation of a Customs Form 214 covering more than one shipment of merchandise.
What is the difference between a free trade zone and a foreign trade zone?
Free trade zones are areas in which commodities can be manufactured, modified or stored under specific customs regulations and generally not subject to customs duties. According to U.S. Customs and Border Protection (CBP), foreign trade zones are the United States’ version of free trade zones.
What is FTZ SAP GTS?
What’s included in SAP GTS 11.0 for FTZ? FTZ Goods Receipt Processes. Transfer duty-unpaid goods from overseas to a Foreign-Trade Zone as a direct delivery scenario. Transfer duty-unpaid goods from overseas to a Foreign-Trade Zone as a non-direct delivery scenario.
What is difference between FTZ and Bonded Warehouse?
Customs Entry A Foreign Trade Zone is not considered within customs territory. Customs entry is filed when goods are removed from the FTZ. A bonded warehouse is within the US Customs territory. … Admissions to the zone are covered under the FTZ operators Customs Bond.
How does a free trade zone FTZ benefit a business?
An FTZ offers a unique opportunity to defer, reduce or eliminate customs duties on your products, which can result in significant cost savings. Customs duties only come into effect when your products leave the FTZ and enter the local market. If a product is re-exported, no duties are due.