The ABCs of FTZs – SC Ports Authority

The ABCs of FTZs

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What are the Benefits of Using FTZs?

  • FTZs are not in U.S. Customs territory, therefore, duty is paid only when imports are shipped into Customs territory.
  • Customs duties are not paid on merchandise exported out of the U.S. from a FTZ.
  • Duties are reduced or eliminated on materials subject to defect, damage, obsolescence, waste and scrap.
  • Duties are not owed on labor, overhead, or profit attributed to FTZ production operations.
  • FTZ users can pay the duty rate on component material or merchandise produced, whichever is lower.
  • Spare parts may be stored, returned, or destroyed without paying duty.
  • Most merchandise subject to U.S. quotas may be held in an FTZ until quota windows open.
  • Delays in Customs clearances and duty drawback procedures may be eliminated.
  • Quality control inspections can identify substandard goods to be destroyed without duty payment.
  • Pay harbor maintenance fees quarterly.
  • No country of origin labels are required on merchandise admitted to an FTZ.
  • Customs supervision of procedures saves on individual security expenses and insurance.
  • Increased accountability can reduce problems within inaccurate inventory, receiving and shipment, and helps track waste and scrap.
  • Materials consumed in FTZ processing are generally not subject to duties.
  • Merchandise may be held for exhibition without duty.
  • Duty payable on FTZ merchandise need not be included on insurable value.
  • Due to security, insurance rates may be lower.
  • No duty is owed on in-bond, zone to zone transfers of FTZ merchandise.
  • Specific merchandise ID is unnecessary.
  • First-in-first-out and foreign first methods are acceptable.
  • Customer may be able to reduce merchandise processing fees.
  • Users may be able to reduce Customs brokerage fees.