The Benefits of Using a Foreign Trade Zone

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A foreign-trade zone FTZ is a defined physical area within the United States that, for customs entry purposes, is how are foreign trade zones created by you as if it is outside U. FTZ Board, for production. In FTZs, "production" is considered to be anything that results in a how are foreign trade zones created by you transformation of an article or that changes its HTSUS classification 6-digit or eligibility for entry.

When you operate under FTZ procedures, your company is treated for purposes of customs duties like it's located outside the United States. That can mean that U. If your finished product is ultimately shipped to the U. And if you re-export the finished product, you don't ever pay duties on the component materials. There are other potential savings, too, like avoiding duties on imported materials that become scrap, and possible administrative savings and efficiencies.

What is production activity how do I know if I need to apply for authorization? Production could include traditional manufacturing activities as well as kitting or assembly operations. When looking at your activity, be sure to consider any imported foreign status items, even packaging or other similar materials.

If any materials would be used in the zone before a customs entry has been made, then they are considered to be foreign status components. Advance approval is needed prior to any production activity in a zone, even if you are proposing that all foreign status inputs be admitted in privileged foreign status.

What is "scope of authority"? The company's scope of authority is based on the written descriptions provided in the company's request for production authority that was approved by the FTZ Board. HTSUS numbers are provided only as a supplement to the written descriptions of componets and finished products. Therefore, changes in the HTSUS number applicable to a component or product have no impact on an approved scope of authority if the physical component or product is the same that is, consistent how are foreign trade zones created by you the written description in the scope approved by the FTZ Board.

Capacity the level of activity is not part of the scope of authority. What is involved in getting FTZ production authority? To conduct production activity in a FTZ, you will first contact your local foreign trade zone to discuss the requests that will be submitted to the FTZ Board to designate your site as part of the FTZ and request production authority. FTZ Board has simplified its procedures to make the benefits of the FTZ how are foreign trade zones created by you accessible to a broad range of companies.

To request production authority, you will need to submit a "production notification". The production notification process takes days and production authority is approved if no issues come up during that process. How are foreign trade zones created by you FTZ Board's regulations allow the Board's staff to authorize production activity on an interim basis during the day period while the Board is reviewing a request for production authority. Customs and Border Protection CBP office has confirmed that the activity could begin sooner than the day standard production review period and if CBP has no objections to the proposal.

Interim authority can be requested by letter, either as part of the production notification or separately. In requesting interim authority, a company should explain why authority is needed quickly and should also attach comments from CBP stating the company could be activated sooner than days and that CBP has no objections to the request.

What does the FTZ Board base its decisions on? In reviewing production notifications, the FTZ Board authorizes activity unless an issue arises in the notification process. What is CBP's role? A company should reach out to the local CBP port of entry early in the process to understand the security and inventory control requirements that will need to be met prior to activation.

Do I already have to be located in a FTZ to use the program? The FTZ Board has quick, straightforward procedures for you to work with your local FTZ to create a "subzone" or "usage-driven site" at your facility. Is there a fee to apply? There is no fee to apply for production authority. If your local zone has reorganized under the FTZ Board's alternative site framework, there would be no fee to request a subzone within that zone's service area.

How do I get in touch with my local FTZ? The local organization that manages the zone is known as the "grantee". There is a "Simplified Savings Estimator" available on the production center page. This will provide you with a basic estimate of potential duty savings from the use of FTZ procedures. You should also discuss with the local FTZ grantee any annual or application fees that they may charge. Other costs to consider include an employee to oversee the FTZ operations and potentially specialized software to manage the FTZ inventory control system.

What is a foreign-trade zone? What if I need authority sooner than days? How do I request interim authority? We also have more frequently asked questionsor take a look how are foreign trade zones created by you our application page.

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