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By definition, a foreign-trade zone is a secured area located within the United States, but technically considered
to be outside the territory of U.S. Customs. Therefore, foreign-trade zones offer the ability to defer, reduce or
even eliminate Customs duties on products, resulting in tremendous savings for your business.
For example, while imported goods are stored, assembled or manufactured in a foreign-trade zone, no duty is due.
When the finished goods are entered into Customs territory, duty is paid only on the goods entered, not on materials
or parts used in production. Additionally, users of a zone do not have to pay duty on goods processed and then
exported from the zone or on goods damaged, destroyed or consumed in the foreign-trade zone.
If your business imports and then assembles parts, you know that components often have a different duty rate
than the finished product. The foreign-trade zone allows you to pay the lower of the two rates - either on the parts
or on the assembled goods - when your product is entered into U.S. Customs territory.
In addition, a foreign-trade zone can reduce costs associated with the flow of goods into and out of the country.
United States quota restrictions do not apply to merchandise admitted to zones. So, goods in foreign-trade zones
can be transformed into non-quota products or can be stored duty-free in zones until a quota opens and the goods
are entered into the U.S. market.
Finally, a zone-to-zone transfer allows users to transfer merchandise from one zone to another and permits
duties to be deferred until the product is removed from the final zone for entry into U.S. Customs
territory.
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