{"id":11316,"date":"2023-08-15T10:51:29","date_gmt":"2023-08-15T17:51:29","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=11316"},"modified":"2023-08-15T10:53:05","modified_gmt":"2023-08-15T17:53:05","slug":"3-minute-explainer-an-introduction-to-foreign-trade-zones","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2023\/08\/3-minute-explainer-an-introduction-to-foreign-trade-zones","title":{"rendered":"3 Minute Explainer: An Introduction to Foreign-Trade Zones"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”11317″ img_size=”full”][vc_column_text]Foreign-Trade Zones (FTZs) enable companies to reduce import duties and taxes, as well as simplify import procedures. In this <\/span><\/i>3 Minute Explainer<\/span><\/i><\/a>, we look at the who, what, when, where and why of FTZs.<\/span><\/i><\/p>\n

The <\/span>United States Foreign-Trade Zones program<\/span><\/a> was created in 1934 as a way to counteract the Smoot-Hawley Tariffs of 1930. This was a protectionist trade policy that raised tariffs on thousands of imports.<\/span><\/p>\n

The FTZ program has expanded in recent decades to meet the needs of the rapidly growing global trade environment.<\/span><\/p>\n

A Foreign-Trade Zone is a specifically designated, secure area that is considered outside of US Customs territory. FTZs are similar to its global counterparts, Free Trade Zones. There are FTZs in all 50 states and Puerto Rico.\u00a0<\/span><\/p>\n

The Foreign-Trade Zones Board is responsible for reviewing and approving applications to establish, operate, and maintain an FTZ.<\/span><\/p>\n

The US Customs and Border Protection (CBP) are responsible for compliance enforcement in zones.<\/span><\/p>\n

The types of organizations looking to establish a zone are typically public or quasi- public entities. These include port authorities, cities, or counties.\u00a0<\/span><\/p>\n

Corporations are also eligible to participate in the FTZ program. The benefits of an FTZ are available to both importers and exporters engaged in global trade.<\/span><\/p>\n

What Can You Do in a Foreign-Trade Zone?<\/span><\/h2>\n

Almost any merchandise can be manufactured in an FTZ with a few exceptions. Some exceptions include the manufacture of alcoholic beverages, firearms, tobacco products and sugar.\u00a0<\/span><\/p>\n

Should a company decide to participate in the FTZ program, it should change very little, if any, current operating procedures for companies.<\/span><\/p>\n

Both domestic and foreign merchandise can be utilized in an FTZ.<\/span><\/p>\n

In an FTZ, merchandise may be:<\/span><\/p>\n