GTK, with its long-term experience in global trade management and compliance can help implement FTZ easily and integrate it in an efficient manner with your existing process.
You’ve heard about FTZs and are fairly sure they might help out your business. But you don’t know enough about FTZ to decide if you need one.
GTK is a pioneer in FTZ software and can help you determine if you need to implement FTZ.
If you are a manufacturer or an individual who imports and exports goods, you are likely to benefit from FTZ.
Take a look at the following questions and if you have an affirmative answer for any of them, you need FTZ:
- Are you looking for savings on Merchandise Processing Fee (MPF)?
When you import merchandise, US customs charges a fee that depends on the value of the merchandise. This doesn’t include insurance, freight and duty charges. You will be charged a maximum amount of $ 508.70 and a minimum of $26.22 for the goods you are importing. This fee is payable for each shipment (customs entry).
If you were to use a zone, however, you can file a single entry for all merchandise shipped over a seven-day period and you would be charged a one-time MPF fee for goods imported over this period. This would help you save costs on MPF during the course of the year.
- Do you think you could benefit from inverted tariffs?
Inverted tariffs are beneficial if the duty levied on the finished good is lower than the duty on the raw materials or components. When you use a zone, you can manufacture the goods within the FTZ and benefit from a lower inverted tariff duty.
You are able to avoid paying higher duty on
the raw materials and defer the duty payment to the one with the lesser value
until the goods are ready for consumption in the US.
- Would you like to benefit from
deferrals and/or reductions on duties and fees?
FTZs bring in optimal duty deferrals allowing businesses to save on costs and benefit from fee reductions.
- With FTZ, you can move merchandise from zone to zone or retain them in the zone until the goods are ready to leave the FTZ. There is no time limit for the merchandise to be held in the zone.
- When you bring raw materials and components for manufacturing in the zone, you will not owe duty on overheads, labor and profits that occur from operations within the zone. FTZ would therefore benefit companies that faces loss from scrap, waste or yield as they would be liable to pay separate duties on raw materials
- As explained earlier, you can benefit from competitive pricing in the FTZ with inverted tariffs as it enables you to choose the lower duty of finished goods against the higher rates of Raw Materials.
- Are you looking for duty avoidance on exports?
Except for export regulations that come under NAFTA, you can avail duty exemption or quota charges on re-exports in FTZs. This means that you can move raw materials or finished goods into FTZs and then move them out for exports without being levied export duty on them.
- Would you like to make optimal use of quotas?
Quota restrictions are often quite stringent but can be manipulated within FTZs. You can hold goods in the FTZ until the quota is removed or you can manufacture merchandise into a product that doesn’t have a quota restriction.
- Do you want to save on costs?
Apart from the main advantages, you might be able to benefit from the following cost deferral / saving alternatives with FTZ as well:
- Quarterly harbor maintenance fee payments against entry by entry payments
- Reduced brokerage costs due to weekly entry previliges
- Distribution costs could possibly come down if you ship and assemble parts in the FTZ as it could bring down transportation costs
- You could bring merchandise into FTZ for production use and not pay duty on it. You can assemble, install and test the goods without paying duty until they are ready for use in the specified production process
- Under certain conditions, goods could qualify for duty drawbacks and claims can be filed for them although they might remain in the FTZ indefinitely
The nature of savings you could benefit from using FTZ depends on the size of your company and your growth model. Depending on whether you are a small or large company, managing FTZ manually might be a challenging task. Compliance rules change and if you’re importing and exporting a large volume of merchandise, your operations would be more efficient with FTZ software that works well with your systems and processes.
GTK, with its long-term experience in global trade management and compliance, can help implement FTZ easily and integrate it in an efficient manner with your existing process.