What is an FTZ?
• A Foreign Trade Zone is defined as an isolated area
adjacent to an international port of entry…(the Sunport
is a port of entry)… where industry can store, repack,
sort, mix, or perform value added manufacturing with
foreign goods without being subject to import duties…
otherwise known as taxes.
• Albuquerque’s Foreign Trade Zone, known as Foreign
Trade Zone #110, was granted by the Foreign Trade
Zone Board to the City of Albuquerque’s Aviation
Department in 1984
Why does Uncle Sam care?
• Duty Enhancing Competitiveness.
• By reducing costs, FTZs level the playing field and improve
U.S. competitiveness. FTZs can help businesses reduce
production, transaction, and logistics-related costs by
lowering effective duty rates, allowing special entry
procedures, and encouraging production closer to market.
Reducing costs through FTZ use can lead to more
competitive U.S. operations, thereby helping to maintain
U.S. activity and jobs.
• Creating/Retaining Jobs and Encouraging Investment.
• By helping local employers remain competitive, zones can
contribute to maintaining or boosting employment
opportunities. And lower FTZ-based production costs
encourage increased investment in U.S. facilities.
FTZ Benefits
• Duty Exemption on Re-Exports
• If the final is product is exported, you avoid paying tariffs on
imported parts/components/materials
• Duty Deferrals
• If the final product is sold in the U.S. you may defer tariffs
until the sale, a cashflow benefit
• Relief from inverted tariffs
• It is your final product that is declared for importation/sale in
the U.S. market – not the sum of the individual parts and
components.
FTZ Benefits
• Duty elimination on waste, scrap, and yield loss
• You aren’t declaring imported materials until after you have
used them… keeping you from paying duties on what was not
used in the manufacturing process
• Weekly Entry Savings
• Companies operating under an FTZ can file WEEKLY entry
procedures. You pay the merchandise processing fee only once
for the week, rather than on every shipment. (min $25, max
$485)
Alternative Site Framework
• By enabling Usage-Driven site process – with CBP’s
concurrence on proposed Service Area and again for
each proposed new site – across each approved Service
Area, the…
ASF dramatically simplifies and accelerates designation
of sites for companies with real FTZ needs.
One of the benefits of the ASF is that companies may be
added in just thirty (30) days
Usage Driven Site
• A “Usage-Driven” site (can also be termed a “subzone”) is
designated for a company to conduct FTZ activity.
• Can be designated by FTZB staff via simplified MBM
(with no swapping of acreage required) – with local
CBP concurrence.
• Designation tied to a named company and limited to
the space needed for that company’s use.
• If the company vacates its designated Usage-Driven site,
the FTZ designation automatically terminates.
How do we get started?
• “Usage-driven” sites are individual sites where an actual
warehousing or manufacturing company will commit to
activating its operation after approval by the Foreign-Trade
Zones Board.
• Can be secured through an administrative boundary modification
proceeding in thirty (30) days.
• If a company has a manufacturing facility it would be permitted
to secure Production Notification authority (120-day approval for
manufacturing) if it qualifies.
• Sites must have an operator activate and have zone activity
within:
• Three (3) years for usage driven
Thank you!
Randy Trask
505-231-0677
[email protected]
