Foreign Trade Zones

1
Foreign Trade Zones
2
What is a Foreign Trade Zone?

• U.S. Department of Commerce Foreign-trade zone
  is a restricted access site, in or adjacent to a
  Customs port of entry, operated pursuant to
  public utility principles under the sponsorship
  of a corporation granted authority by the Board
  and under supervision of the Customs Service.
• U.S. Customs Service Zones are treated for
  purposes of the tariff laws and Customs entry
  procedures as being outside the Customs territory
  of the United States. Under zone procedures,
  foreign and domestic merchandise may be admitted
  into zones for operations such as storage,
  exhibition, assembly, manufacture and processing,
  without being subject to formal Customs entry
  procedures and payment of duties, unless and
  until the foreign merchandise enters Customs
  territory for domestic consumption.

3
Foreign Trade Zone Operations

• Manipulation
• Exhibition
• Manufacturing
• Processed
• Assembled
• Destruction

4
FTZ Company Benefits

• Cash Flow (Duty Deferral)
• Normal process duty and fees paid within 10 days
  of U.S entry
• Received into Aldelano FTZ duty and fees not
  paid until after product ships from Aldelano,
  freeing up cash flow
• Inverted Tariff (Duty Reduction)
• Regular imports Each component received is taxed
  at the duty rate associated with that component
• Aldelano FTZ only the finished unit is taxed at
  the duty rate associated with the finished unit
  may be lower than combined duty of components
• Cost of Money (Duty Elimination)
• Items received into a FTZ and then exported
  (Canada and Mexico included) are not subject to
  US duty
• Avoid Drawback
• Expedite Drawback
• Destroyed items
• Items destroyed within the FTZ are not subject to
  duty

5
FTZ Company Benefits, cont.

• Tax Exemptions
• Inventory or Floor Tax
• Federal Excise Tax
• Weekly Entry
• Normal Process Duties and fees are paid per
  entry, one entry per shipment at a rate of .21
• Aldelano FTZ If value of products received is
  over 230,000 in one week, all products received
  in that week can be filed under one entry, capped
  at 485

6
FTZ Other Benefits

• Greater Flexibility (ease through customs
  quickly)
• Ease of Paperwork
• Foreign Goods CF-214 (Admission)
• Domestic Goods No Application/Permit Required
• No Bond Required
• High Security (government protected)
• Fine Avoidance
• 10 Marking
• Mexico
• U.S. Quota Avoidance
• Absolute or Quantitative
• Tariff 

7
FTZ Other Benefits, cont.

• Satisfy Legal Requirements to Export or Destroy
• Transportation Time Savings (Direct Delivery)
• Blanket Permits
• CF-214 (Admission) - 1 per day
• CF-216 (Manipulation) - 1 per year
• Temporary Removal (120 Days)
• Exhibition
• Repair
• Consolidated Entry
• Weekly Entry
• Transportation/Exportation
• Importation
• Indefinite Storage