Foreign Trade Zone

A Foreign Trade Zone (FTZ) 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 international commerce. The rapidly growing zone program is flexible and offers solutions to business issues not addressed by other custom procedures.

Created by Congress in 1934, Foreign Trade Zones offer a mechanism for deferring or eliminating duties on merchandise brought into the United States. Duties are paid if an when the materials enter the domestic market, and no duties are paid if the merchandise is re-exported. The duty paid is the lower of that applicable to the finished product itself or its component parts. Since the materials can be stored indefinitely, zone users can select when and how their product will be classified for duty purposes.

Las Vegas is the new business gateway hub of the southwest U.S. and a key "destination" city, accessible from most anywhere.
All major transportation means and carriers are represented in Las Vegas.
Customs Brokers will be on the WJC premises.
Merchandise entering the FTZ may be:

- Assembled	- Re-labeled	- Mixed	- Processed	- Displayed
- Cleaned	- Repackaged	- Tested	- Manipulated	- Salvaged
- Destroyed	- Repaired	- Stored	- Manufactured	- Sampled

FTZs were created to serve U.S. national interests by lowering the cost of production and distribution in the U.S.:

- Cost savings through tariff relief.
- Logistical benefits: Seamless transactions (i.e., time savings through less paperwork).
- Weekly entry benefits reduce Customs Broker fees and substantial merchandise processing fees.
- Direct delivery reduces inspections/delays at borders/docks.

Deferral or even elimination of duty fees:

- Duty is charged only when goods leave the FTZ and enter the commerce of the U.S., resulting in cash-flow savings.
- No duty is owed on goods that are re-exported.
- Goods can be stored in a secure environment indefinitely within the FTZ.

Return on Investment is normally 9 to 12 months from start of project (application, consulting fees, FTZ systems, activation).

- Significant duty deferral on average inventory in first year; capital cost each year thereafter.
- Duty elimination on exports and scrap.
- Assembly /Manufacturing may result in lower duty rates for the finished product.

ADVANTAGES OF A FOREIGN TRADE ZONE OVER A BONDED WAREHOUSE

FUNCTION	BONDED WAREHOUSE	FOREIGN TRADE ZONE
Customs Entry	A bonded warehouse is within the US Customs territory and a customs entry must be filed to enter goods into the warehouse	A zone is not considered within customs territory. Customs entry is not required until goods are removed
Permissible Cargo	Only foreign merchandise	All merchandise, whether domestic or foreign
Customs Bonds	Each entry must be covered by either a single-enter term bond, or a general term bond	No bond required
Payment of Duties	Duties are due prior to release from bonded warehouses	Duties are due only upon entry into US territory
Manufacture of Goods	Manufacturing is prohibited	Manufacturing is permitted with duty payable at the time the goods leave the zone for US consumption. No duty on waste material or on value added in manufacturing. No duties paid on export goods
Appraisal and Classification	Immediately	Tariff rate and value are determined at your discretion, either at the time of admission, or when goods leave the zone
Storage Periods	Not to exceed 5 years	Unlimited
Operations on merchandise for domestic consumption	Only cleaning, repackaging and sorting make take place, under all customs supervision	Sort, destroy, clean, grade, mix with foreign or domestic goods, label, assemble, manufacture, exhibit, sell, repack
Customs entry regulations	Apply fully	Only applies to goods removed for US consumption
Jurisdiction of other federal agencies	Applies to all foreign merchandise	Application of regulations depends on products and agency involved