town of islip foreign trade zone authority administrators of foreign trade zone no.52
TRANSCRIPT
TOWN OF ISLIP FOREIGN TRADE ZONE AUTHORITY
Administrators of Foreign Trade Zone No.52
WHAT IS A FTZ
• The US Foreign Trade Zone Program was introduced by President Roosevelt in 1934 as
part of the “New Deal” to promote and encourage international trade
• It is intended to give United States-based companies increased global competitiveness by eliminating some of the disincentives associated with manufacturing in the U.S
• A Foreign Trade Zone is a site within the United States or near a U.S. Customs port of entry, where foreign and domestic merchandise is generally considered to be in international commerce
• Foreign or domestic merchandise may enter this enclave without a formal Customs entry or payment of Customs duties or government excise tax
2 Types of FTZ’s
• 1st Type – GENERAL PURPOSE ZONE A variety of activities for multiple users
• 2nd Type – SUBZONE A Manufacturing Operations User who can not be accommodated in a general purpose zone
WHY CHOOSE A FTZ
• The Town of Islip Foreign Trade Zone is one of the Island's most valuable resources for companies engaged in international trade
• Legally, a foreign trade zone is an area within the
United States that is considered outside of U.S. Customs territory
WHY CHOOSE A FTZ
• Consequently, you can import certain types of merchandise into an FTZ without going through formal customs entry procedures or paying import duties
• There are many benefits to being located in a FTZ which make a FTZ a more profitable way for local businesses to reduce costs and compete in the international marketplace
Merchandise entering a zone may be:
DUTY DEFERRAL
• One major benefit is increased cash flow from keeping the goods out of US Customs territory
• Duties are paid on merchandise when it is entered into US Customs Territory
• By deferring this payment, the business has
the use of its money for the interim period thereby keeping these funds available for its operations
Increased Cash Flow Example
• A company imports 1000 pieces into the FTZ• 300 pieces are transferred into the US market• The duty is paid on 300 pieces not 1000 pieces• 3 months later 700 pieces goes out• Duty was deferred for 3 months on 700 pieces• Your company had an increased cash flow
DUTY FREE
• Duties are paid only on the goods entering the domestic marketplace
• You may avoid paying duties altogether if your products are re-exported
• Additionally, merchandise can be held indefinitely within the FTZ without any payment of customs duties
Duty Elimination Example
• 1000 pieces was imported• 200 pieces was transferred into the US market• Duty was paid on 200 pieces• 700 pieces didn’t sell and was re-exported• Duty on 700 pieces was eliminated• You avoided a drawback on 700 pieces
DUTY REDUCTION
• Inverted tariff relief is yet another benefit available in a Zone; finished products manufactured in a FTZ from components purchased abroad may be subject to an even lower rate of duty
• With inverted tariff relief, a manufacturer may elect to pay duty on the component parts or the finished product, whichever rate is lower
WEEKLY ENTRIES
• The FTZ permits zone users to file one entry as opposed to multiple entries throughout the week, significantly reducing paperwork and expense
QUOTAS
• Quotas do apply to goods entered into US Customs territory
• The goods which can be stored in the FTZ can be among the first to enter the US market when the quota is eased
ADDITIONAL BENEFITS
• Direct deliveries ease the movement restrictions of merchandise in and out of the country
• Quota restrictions do not apply to goods admitted to zone
Participants
• Foreign Trade Zones Board in Washington D.C
• Bureau of Customs & Border Protection• Grantee-Suffolk County
• Operators• Users• Brokers• NAFTZ
Bureau of Customs & Border Protection
• Oversees zone operations• Agent of the FTZ Board
Operator
• Provide day-to-day oversight of zone activities, including
–Recordkeeping–Marketing– Technical expertise
User
• Entity using zone for storage, handling, or manufacturing
• Operator in some instances• Varied industries– Manufacturers– Petroleum refining– Computer and electronic production– Shipbuilding– Warehousing/distribution
Brokers• Holder of license from Customs• Customs “expert”• Transacts Customs business on behalf of operator or user
– Importer may transact business on its own behalf – Importer is always responsible party
Additional Information
• Contact us by:
Phone: 631-588-5757Visiting: 1 Trade Zone Drive
Ronkonkoma NY 11779 www.ftz52.com
Email: [email protected]