Weekly Summary Entry
One of
the major benefits that can be realized through the use
of a Foreign Trade Zone (FTZ) is Weekly Summary Entry.
By using Weekly Entry, a single entry may be filed on
qualifying goods at the end of each week instead of the
multiple entries typically filed by a medium to large
importer. The duty on goods is in fact paid, after the
goods leave the Foreign Trade Zone. The statutory cap of
$485.00 in Merchandise Processing Fee (MPF) still
applies and can result in tremendous savings in this
category alone, in addition to a reduction in brokerage
and other fees. Importers have a potential annual cost
savings in the reduction of MPF alone.
Duty
Deferral
A Foreign
Trade Zone user that assembles or manufactures in a zone
may elect to pay duty on imported components either at
the duty rate applicable to the components or at the
duty rate applicable to the finished product. U.S. added
value is not subject to duty at all. In an inverted
tariff situation, that is, a situation in which the duty
rate on the finished product is lower than that on the
imported components, the Foreign Trade Zone results in a
lower overall duty to the Foreign Trade Zone user.
Foreign Trade Zone users pay U.S. Customs Duties only
when merchandise is shipped into a customs territory.
Inventory held in an Foreign Trade Zone is exempt from
payment of duties until shipped
Quota
Restrictions
Quote
Restrictions generally may be avoided by admitting goods
into a Foreign Trade Zone. Over quota merchandise may
usually be held in a zone until the next quota period
begins, and may often be used as a component part of a
product that is not over quota. Similarly, bringing
goods into a Foreign Trade Zone may also avoid some
marketing restrictions.
Duty
Reduction
Also
known as "inverted tariff" duty reduction allows any
Foreign Trade Zone importer or manufacturer to pay the
duty rate applicable to either the imported components
or the finished product, whichever is lower.
Duty
Elimination
Foreign
Trade Zone users are not required to pay U.S. Customs
duties on merchandise exported from a Foreign Trade
Zone, or on merchandise that is damaged, scrapped or
unused.
Increased
Flexibility
Foreign
Trade Zone's offer users greater flexibility for
merchandise subject to just-in-time delivery
constraints, quotas or marking requirements. In
addition, Customs clearance of merchandise may be
expedited through use of a Foreign Trade Zone.
Merchandise Processing Fee
Fees are
owed only when and if merchandise is transferred to the
U.S. Customs territory.
Harbor
Maintenance Fee
Fees are
paid quarterly on merchandise received in the Foreign
Trade Zone.
Exports
No
customs duties are paid on merchandise exported from a
Foreign Trade Zone. While drawback law allows the
recovery of Customs duties previously paid after the
merchandise is exported, payments may be delayed for a
variety of reasons. In a Foreign Trade Zone, the duties
are simply never paid.
