• 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.