ÂAbout Foreign Trade Zone

Foreign Trade Zones (FTZ) are secure areas within the United States that are considered to be outside of U.S. Customs territory for tariff purposes. FTZ benefits are available to any U.S.-based company, and these zones are not restricted to specific geographic locations within the United States, providing flexibility for companies in various regions to take advantage of the program. Activities permitted within FTZs include assembly, storage, and processing, among others, which can lead to operational cost savings.

Benefits for Businesses

FTZs provide significant advantages for a U.S. based firm. For example, a chemical company that imports raw materials to manufacture and blend specialty chemicals can bring these materials into the U.S. without paying customs duties immediately by using an FTZ under one of following tariff benefits.

• Duty Deferral:Customs Duties are paid only if and when goods are transferred out of zone and into U.S. Customs territory.

• Duty Elimination:No duties are paid on foreign merchandise that is subsequently exported from FTZ.

• Duty Reduction: FTZ users may elect to pay duties at either the rate of foreign inputs used, or the rate applied to the finished product – whichever is lower.

• Expedite Trade: Direct Delivery reduces transit times for receipt of merchandise. Weekly entry simplifies the customs-entry process.

 

These benefits help companies reduce costs and improve cash flow.

 

Benefits for the United States

• Job Creation and Retention: FTZs provide a competitive advantage for U.S.-based manufacturing and distribution operations.

• Increased Exports: The elimination of duties on exported merchandize makes U.S.-based companies more competitive in export markets.

• Investments: FTZs encourage multinational firms to establish U.S.-based operations, attracting foreign investment to the United States.

Top Ten FTZ Products

1. Oil & Petroleum
2. Pharmaceuticals
3. Vehicle Parts
4. Consumer Electronics
5. Machinery & Equipment
6. Chemicals
7. Electrical Machinery
8. Iron & Steel
9. Other Metals & Minerals

What are the steps to setup Foreign Trade Zone

 

1. Determine the Type of FTZ:

I. General-purpose Zone
II. Subzone
III. Production authority
Each type has different requirements and benefits.

2. Prepare & submit your application
3. Approval and activation
4. Compliance and Management

FTZ setup is a complicated and cumbersome process, but the successful implementation of the program will result in significant savings in overall cost and would enable U.S. based companies to compete with their international competitors.

As an experienced and licensed chemical logistics services provider in USA, NUCO Logistics can assist you with FTZ for chemical and pharmaceutical cargo and its application process, setup and compliance. Please contact one of our in-house experts and they can go over the program with you.