20 Ways to Save

  1. Duty Deferral: Imports may enter the FTZ and be held in inventory indefinitely without payment of Customs duty.
  2. Re-exports: Customs duties are not paid on merchandise exported from the FTZ
  3. Defects, Damage, Waste, Scrap: Customs duties are reduced or eliminated on merchandise subject to defect, damage, obsolescence, waste and scrap in the FTZ.
  4. Inverted Customs Duty Savings: FTZ occupants may elect to pay the duty rate on component material or merchandise produced from the component material- whichever is lower.
  5. Labor, Overhead and Profit Not Dutiable: Customs duties are not owed on labor, overhead and profit attributed to FTZ production operations.
  6. U.S. Quotas: Most merchandise may be held in a FTZ until quotas open.
  7. International Returns: Duties are not paid on merchandise that is repaired in a zone and re-exported.
  8. Quicker Delivery: Delays in Customs clearances and duty drawback procedures are eliminated. Delivery times are reduced by direct shipments to the FTZ.
  9. Quality Control: The FTZ may be used for quality control inspections to ensure that only products that meet specifications are imported. Sub-standard goods can be destroyed or returned before duty is paid.
  10. Country of Origin Marking and Labeling: No country-of-origin labels are required on merchandise admitted to the FTZ.  If needed, the labels can be applied in the FTZ.
  11. Cargo Insurance: Reduction in cargo insurance is possible because imported merchandise is shipped directly to the FTZ, avoiding potential pilferage at ports.
  12. Reduction of Merchandise Processing Fee (MPF): The importer may file one estimated entry per week reducing the MPF.
  13. Inventory Control: FTZ operations require careful accounting on receipt, processing and shipment of merchandise, improving overall systems.
  14. Consumed Merchandise: Merchandise consumed in processing in the FTZ is generally not subject to duties.
  15. Inventory Taxes: Tangible personal property imported from outside the U.S. and held in a zone, as well as that produced in the U.S. and held in a zone for exportation, are not subject to State and local ad valorem taxes.
  16. Exhibition: Merchandise and machinery may be held for exhibition or displayed in a FTZ without duty payments.
  17. Reduced Insurance Costs: Insurance costs may be reduced due to increased security and a lower insurable value (duty does not need to be included in figuring rate.)
  18. Zone-to-Zone Transfer: Merchandise may be transferred in-bond from one zone to another.
  19. Transfer of Title: Title to merchandise may be transferred in the FTZ, as long as there is not “retail” sale.  The global supplier can own it until it is shipped just-in-time to local manufacturers.
  20. Foreign Production Machinery: Duty may be deferred on foreign production equipment imported into a designated zone area for plant construction until equipment is assembled, installed, tested, and used in production for which it was admitted to zone.