Many of the lots in Mericle’s CenterPoint Commerce and Trade Park have FTZ (Foreign Trade Zone) status, which encourages and expedites import/export cargo movements. These specially designated zones are considered outside the Customs territory of the United States. This means that merchandise can be stored, exhibited, assembled, manufactured, and processed without being subject to formal Customs entry procedures and payment of duties—unless and until the merchandise enters the Customs territory for domestic consumption.
No duty (tax) is ever charged on merchandise while it is in an FTZ, and there is no limit on the length of time it may be kept there. By deferring the duty, capital is freed for more important needs.
Relief from Inverted Tariffs
Generally, if foreign merchandise is brought into an FTZ or Subzone and manufactured into a product that carries a lower duty rate, the lower rate applies.
Duty Elimination on Waste and Scrap
No duty is charged on most waste and scrap produced in FTZs.
No Duty on Domestic Content or Added Value
The “value added” to a product in an FTZ (including manufacture using domestic parts, cost of labor, overhead, and profit) is not included in its dutiable value when the final product leaves the FTZ. Final duties are assessed on foreign content only.
Duty Exemption on Re-Exports
If merchandise is re-exported after being placed in an FTZ or shipped to another FTZ and then re-exported, no duty is ever paid.
No Duty on Rejected or Defective Parts
No duty is paid on defective or faulty merchandise that is returned to the country of origin for repair or simply destroyed. Many companies suffer from the “double duty crunch.” That is, they pay duty on imported merchandise, find it to be faulty and return it to the country of origin for repair, and then pay duty again when the merchandise re-enters the United States. If you are an FTZ user or Subzone, the double duty crunch is never a problem because your merchandise never enters the commerce of the United States.
Under Customs laws, a company is required to file a Customs entry with each shipment of imported merchandise. This involves associated costs paid to the U.S. Government for preparing, processing, and filing the entry; external service provider fees; and a merchandise process fee–a .21% ad valorem fee capped at $485 per Customs entry. However, under zone procedures, FTZ users are allowed to consolidate shipments from an FTZ to the U.S. Customs territory into a single weekly entry transaction, rather than filing an entry per shipment. This significantly reduces the number of Customs entries filed by an importer, resulting in significant operational and financial benefits.