If you import goods worth $1 million or more, or if you purchase foreign goods from a domestic supplier valued at $1 million or more, you'd do well to examine the benefits that an FTZ offers.

• Merchandise imported into an FTZ and later re-exported from the zone is never assessed any customs duties.
  
  
• Imported merchandise admitted into a zone and then rejected, scrapped or returned to vendor -- and the waste products of a manufacturing process -- are considered to be duty free. Some materials can be consumed in the zone and receive duty free status as well.
  
  
• When imported merchandise is shipped to U.S. locations from a zone, duties are deferred until the merchandise leaves the zone.
  
  
• When components are imported into an FTZ and manufactured into a new product for re-export or sale in the U.S., the importer may choose between the finished-product duty rate and the imported-component duty rate, whichever is lower.
  
  
• Importers located in an FTZ are required to submit only one customs entry per week, instead of an entry on each and every shipment. Firms using an FTZ are the only ones in the U.S. that currently enjoy this type of efficiency.
  
  
• Merchandising processing fees (MPF), based upon the value of the goods, are typically paid on a per-entry basis with a maximum dollar cap. Weekly entry for FTZ allows users and operators to file what would be multiple payments of the MPF only once, with the dollar cap still applying. This can constitute a tremendous savings in MPF, reducing costs to importers who otherwise would file multiple entries.

Car manufacturing plants, oil refineries, computer manufacturers and textile distributors are taking advantage of the benefits of zones. So are companies with as few as 15 employees. In fact, in the U.S. there are nearly 2500 companies utilizing zones and nearly 250 manufacturing subzones.

Will an FTZ save your company money? If you are already using another customs tariff-reduction program, such as Duty Drawback, Temporary Importation Bonds, or a bonded warehouse, an FTZ can streamline your operations, cut down on paperwork, increase your flexibility, and save money -- all at the same time. Many companies are discovering that zones meet their needs more efficiently than other customs programs.

To find out if a Foreign-Trade Zone is right for your firm -- and determine your level of savings -- please submit our free cost-benefit analysis, or call John F. Fowler, at 209.385.7686.

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