Foreign Trade Zone
Santos International is a designated Foreign Trade Zone.
We have saved our industrial clients thousands of dollars on duty import and export taxes.
A Foreign Trade Zone is a defined area in the U.S. that is treated as if it’s outside of the commerce of the U.S., for Customs entry purposes.
Companies use FTZ for:
- Production/Manufacturing (after approval by FTX board)
- Consolidating freight for export
For example, foreign raw materials, and industrial components needing to be imported into Mexico for further manufacturing or assembly can be stored duty free for an indefinite period of time at Santos International.
About Foreign Trade Zones
Foreign Trade Zones (FTZs) are secure areas regulated by U.S. Customs and Border Protection (CBP) and, once activated, are generally considered outside CBP jurisdiction. These areas are typically located near or within CBP ports of entry and correspond to the United States’ internationally recognized free trade zones.
Unless prohibited by law, foreign and domestic goods may be transferred to these areas for various authorized operations, such as storage, display, assembly, manufacturing and processing. All activities within these areas are subject to public interest review. Foreign Trade Zone locations are subject to the laws and regulations of the United States and the state and city in which they are located.
The Advantages of Using a Foreign-Trade Zone
Within this zone, goods are not subject to U.S. duties or excise taxes. In most cases, certain tangible personal property is exempt from state and local ad valorem taxes.
When goods are shipped out of the zone for consumption, CBP duties and federal excise taxes, if applicable, will be assessed.
What is it?
- Goods brought into the FTZ and then directly exported.
- Goods never enter the commerce of the US, so no duty is paid – includes Section 232/301, AD/CVD.
How does it work?
- Imported goods are moved to the FTZ in-bond and admitted into the FTZ (e214).
- When goods (same condition or production goods) are ready to export they are moved in-bond to the port of export on a CF7512 in-bond or PTT (intra-port).
- Bonded goods FTZ goods may be admitted into an FTZ at the border on a “zone to transfer”.
- Once in-bonds are closed out properly and goods are exported, no duty paid and FTZ bond released from liability.
IR Tax Deferral
What is it?
- IR taxes on wine, beer, spirits, and tobacco is normally due at time of entry (sometimes deferred if it is going to a TTB bonded facility).
- Goods going directly into an FTZ in foreign status get a “one time” deferral of IR taxes until withdrawn for consumption.
- Goods going directly into an FTZ and then exported are exempt from IR taxes.
How does it work?
- Goods need to arrive into the U.S. and be admitted into the FTZ without entering the commerce of the U.S.
- When Goods leave the FTZ the IR taxes must be paid unless being bonded out of the country (TTB regulations).