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Foreign Trade Zone

Utilizing A Foreign Trade Zone

 

As the Importer of Record, you can import numerous types of merchandise into a Foreign Trade Zone without navigating through the formal customs entry procedures and paying import duties or taxes. Importers are only required to file the formal customs entry before the actual consumption or removal of merchandise from a Foreign Trade Zone. Partial removal of a full container load of imported goods is permissible. The Importer of Record has the choice of the tariff in effect when the goods entered the warehouse or the tariff in effect when they exit the FTZ. Importers are not required to post bond on goods as long as they remain within the boundaries of the Foreign Trade Zone.

Storage and Taxation Information

Importers may store legal merchandise, domestic or foreign, in a Foreign Trade Zone warehouse. Merchandise that you bring in from out of country is not taxed upon entry. If that same international merchandise returns for export without leaving the FTZ, there is no tax or duty assessed. Under certain circumstances, the Federal Excise Tax is charged when domestic goods are registered. Merchandise may be stored for an unlimited amount of time, regardless of the origin.

Other Activity Allowed Within a Foreign Trade Zone

With authorization, Importers may have the ability to perform…

  • Destruction of goods

  • Mixing, manipulation, and cleaning of goods

  • Assembly and testing of goods

  • Re-labeling, re-packaging, and sorting of goods

  • Salvage of goods

With special permission, importers are allowed to manufacture goods within a Foreign Trade Zone.

Special Utilization of Customs Regulations

Customs entry regulations only apply to goods that are removed from a Foreign Trade Zone, deemed to be for consumption within the United States. In the event an Importer discovers a product defect as noted above, it is possible to salvage or even destroy goods you store in a Foreign Trade Zone. No duty payment is due on goods that are destroyed, damaged, or deemed un-usable. Permission to destroy goods will be requested by the Importer and a decision would be rendered by the governing authority.