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What’s a Foreign Trade Zone?

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A Foreign Trade Zone is a specially designated area which is considered to be outside the Customs Territory of the U.S. The following is a partial list of the many benefits you can attain when using a Foreign Trade Zone or Subzone:

• No duty is ever paid on re-exported merchandise from a zone.

• If the merchandise is sold domestically, no duty is paid until it leaves the zone.

• Generally, duty on waste of scrap is eliminated or reduced.

• If foreign merchandise is manufactured into product which has a lower duty rate, then the lower duty rate applies on the foreign content when the duty is tendered. No duty applies to domestic content.

• Both foreign and domestic merchandise in a zone may be stored, repacked, manipulated, manufactured, processed, destroyed, or otherwise altered or changed.

• Generally, when foreign merchandise is sold to the U.S. government, no duty is charged.

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