1. Understanding Foreign-Trade Zones
Wayne Coleman FTZ Networks President

2. What is a Foreign Trade Zone?
A FTZ is:
A designated location in the U.S. that is legally outside of U.S. customs territory
Where companies can use special procedures that help encourage U.S. manufacturing and other value added activities by allowing delayed or reduced duty payments on foreign merchandise, as well as other savings
The usual Custom entry process and payments of duties are not required on the foreign merchandise unless and until it enters US Customs territory for domestic consumption

3. Where are the FTZs? All 50 States + Puerto Rico
259 General Purpose Zones
471 Subzones
2,700 Firms
320,000 US Workers

4. Permissible Activities in a FTZ
Merchandise admitted to a zone may be:
Assembled*
Tested
Sampled
Relabeled
Stored
Salvaged
Processed
Manufactured*
Repackaged
Destroyed
Mixed
Manipulated
Graded
Distributed
Broken up
Exhibited
Sorted
*The user must receive prior approval from the FTZ Board for “production”

5. FTZ Benefits Duty Elimination Duty Deferral
No duty is paid on foreign merchandise destroyed in the zone
No duty is paid on foreign merchandise that is re-exported
Duty Deferral
Duties are not paid on foreign merchandise while in inventory until being withdrawn for U.S. domestic consumption.
Duty Inversion/Relief from Inverted Tariff
Through manufacture higher duty components can assume the identity of the finished product, for duty calculation purposes, thereby reducing the amount paid upon withdrawal for U.S. domestic consumption.

6. FTZ Benefits Expedited Procedures Weekly Entry No Time Limit
Companies using Zone procedures may have access to streamlined customs procedures (e.g. “direct delivery”)
Weekly Entry
Unique ability to file a single Customs Entry for an entire week’s outbound shipments (MPF savings)
Ex: 1,000 customs entries $485 max = $485,000
52 customs $485 max = ,220
Minimum Annual Savings = $459,780
No Time Limit
There is no time limit placed on goods stored in the FTZ (as compared to a Bonded Warehouse) and goods can be released immediately unlike bonded storage
Other Benefits
Foreign goods and domestic goods held for export are exempt from state/local inventory taxes. FTZ stats may also make a site eligible for state/local benefits which are unrelated to the FTZ Act.

7. FTZ Uses Receiving / Shipping Storage
Processing & Assembly/Manufacturing

8. FTZ Uses Reverse Logistics / Returns Management
Kitting & Assembly of Gift Sets
Retail Display Pallet builds
Crude Oil Importing and Refining
Labeling / Relabeling
Packing / Repacking
Fuel Farms for International Flights

9. Role of Consultants and FTZs…..
Foreign-Trade Zone (FTZ) Services:

Zone Operator
Zone Project Applications
Minor Boundary Modifications
Major Boundary Modification / Zone Expansions
Manufacturing Permits
Subzones
FTZ Management
Activation
Alterations
Feasibility Analysis
Procedures Manual
Zone Schedules / Tariffs
Annual Reports

10. FTZ Site Application Coordination with FTZ Grantee
Gathering all information for Application
Receive Concurrence Letters from Grantee & CBP
Draft FTZ Application

11. FTZ Site Activation
Develop list of names of Key Individuals for CBP Background Investigations
Pre-activation Meetings with Grantee & CBP
Confirm Grantee’s requirements for approval of the facility
Review the facility and determine any suspected Customs security concerns
Request & schedule the “Preliminary Security Survey” visit by CBP

12. FTZ Site Activation
Determine any/all Security Improvements and/or Signage required by CBP for Activation Approval
Assist with ensuring all required Security Improvements are Completed
Notify CBP of completed Security Improvements
Hold "follow-up" Security Survey visit by CBP

13. FTZ ICRS Selection and Implementation
Inventory Control & Recordkeeping System
Determine Short List of Software Providers
Schedule Demo's with Software Providers on Short List
Meetings with Software Providers & Client Systems Staff
Select Software Provider
Execute license agreement for the FTZ Software
Complete Configuration Questionnaire from Software Provider Selected

14. Operational Planning & Execution
Tour the facility and understand the flows of the merchandise moving into &out of the facility, including its destination;
Identify the roles and responsibilities specific to the FTZ Regulatory Operations
Auditing processes & procedures to identify gaps in SOP's not meeting Customs rules & regulations for FTZ operations;
Draft the required FTZ Procedures Manual for CBP;
Map out inventory flows (physical product & data flows) for EDI configurations

15. Operational Planning & Execution
Develop recordkeeping processes in compliance with CBP’s regulations;
Determine process, including timing, of information flow to Customs Broker
Holding FTZ Awareness training for all employees of Client
Draft & Submit the Activation Application to CBP
Run 30-Day Mock Operations

16. For Questions or More Information
FTZ Networks
Wayne Coleman – President, C.O.O