10 Reasons for Warehouses to Use FTZs

1. Imports may be admitted and held in a foreign-trade zone without paying U.S. Customs duties.
2. Distribution FTZs can file a “weekly entry” instead of an entry for each Bill of Lading. Because a week’s worth of transactions can become one entry, supply chain velocity is increase and Customs and brokerage fees are reduced.
3. Duties are never paid on merchandise exported from a zone.
4. Duties are reduced or eliminated on materials that are defective, damaged, or obsolete.
5. Spare parts may be stored, returned, or destroyed without duty payment.
6. Delays in Customs clearances and duty drawback are eliminated.
7. Quality control inspections can identify sub-standard goods to be destroyed or returned without duty payment.
8. U.S. Quota restrictions are different for merchandise admitted to FTZs. Although quotas will apply when the merchandise is entered into U.S. commerce, quota merchandise may be stored in a FTZ so that when the quota opens, the merchandise may be immediately shipped to the U.S. customers.
9. No duty is owed on in-bond, zone-to-zone transfer of merchandise. An increasing number of firms are making use of the ability to transfer merchandise from one zone to another. Because the goods are transported in-bond, duty is deferred until the goods are removed from the final zone for entry into the U.S.
10. Merchandise may be stored in a FTZ for an indefinite period of time. The storage time limits imposed on bonded warehouses are not applicable to FTZs.