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About Foreign Trade Zones

Foreign trade zones (FTZ) allow businesses within the zone to receive, warehouse, and re-export products duty-free, thus reducing costs and helping businesses become more globally competitive. Thousands of businesses each year use foreign trade zones to coordinate foreign and domestic shipments.

Our Foreign Trade Zone brochure Adobe Acrobat Logo contains comprehensive information about FTZs and the benefits to your business.

 

Fast Facts
  • The FTZ program isn't just for exporters. In fact, most financial savings associated with FTZs relate to importing.
  • Foreign and domestic merchandise do not have to be physically segregated and may be commingled or stored together by SKU within an FTZ.
  • There is no on-site presence by Customs in an FTZ, although the facility is subject to spot checks that generally occur once per year.
  • FTZ users are not audited more than importers at large. A company's volume, value and nature of the product dictates whether Customs performs an audit—not FTZ usage.
  • FTZ users do not have to report to Customs on a lot or specific identity basis. Other approved methods including FIFO make FTZ reporting flexible and workable without disrupting operations.
  • FTZ users are not required to have a greater reporting accuracy than importers overall. Overages and shortages as a normal part of business operations are acceptable and may be reported periodically based on established FTZ procedures.

 

Benefits

Foreign Trade Zones (FTZs) help U.S. companies improve their competitive position over their counterparts abroad. FTZs are most useful to firms that:

  • Import products and pay U.S. Customs duties
  • Import large numbers of shipments – whether or not duties are paid
  • Export domestic products on which federal excise taxes are paid
  • Maintain large dollar value inventories subject to State and local ad valorem taxes
  • Maximizes use of sites throughout Miami-Dade County that already accommodate businesses of all sizes that are already engaged in international trade
     

In addition, the Foreign Trade Zone (FTZ) program allows U.S.-based companies to defer, reduce or even eliminate customs duties on products admitted to the zone.
 

  • Deferral of duties
    Customs duties are paid only when and if merchandise is transferred into U.S. Customs and Border Protection territory. This benefit equates to a cash flow savings that allows companies to keep critical funds accessible for their operating needs while the merchandise remains in the zone. There is no limit on the length of time that merchandise can remain in a zone.
  • Reduction of duties
    In a FTZ, with the permission of the Foreign Trade Zones Board, users are allowed to elect a zone status on merchandise admitted to the zone. This zone status determines the duty rate that will be applied to foreign merchandise if it is eventually entered into U.S. commerce from the FTZ. This process allows users to elect the lower duty rate of that applicable to either the foreign inputs or the finished product manufactured in the zone. If the rate on the foreign inputs admitted to the zone is higher that the rate applied to the finished product, the FTZ user may choose the finished product rate, thereby reducing the amount of duty owed.
  • Elimination of duties
    No duties are paid on merchandise exported from a FTZ. Therefore, duty is eliminated on foreign merchandise admitted to the zone but eventually exported from the FTZ. Generally, duties are also eliminated for merchandise that is scrapped, wasted, destroyed or consumed in a zone.

 

Differences between an FTZ and a bonded warehouse

In Miami-Dade County, there are a few hundred bonded warehouses. View a table Get Acrobat! that outlines the differences between a Foreign Trade Zone and a bonded warehouse

 

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