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Frequently Asked FTZ Questions

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  Does my company need to import through Port Milwaukee in order to take advantage of the Foreign-Trade Zone?

While Port Milwaukee may be a convenient port of entry for businesses in southeastern Wisconsin, your company is not obligated to use the Port for any of your FTZ related shipping. Port Milwaukee has been designated by the Foreign-Trade Zone Board as the Grantee for the Southeastern Wisconsin Foreign Trade Zone No. 41, and that responsibility as Grantee functions separately from daily Port operations.

  How is United States Customs and Border Protection involved?

U.S. Customs and Border Protection has the responsibility of supervising the Foreign-Trade Zone through periodic checks and visits from Customs officers. Customs oversees the transfer of merchandise into and out of the Zone and are responsible for collecting revenue from applicable duties, taxes, and fees.

The CBP Port Director is the local representative of the Foreign-Trade Zone Board and controls the admission and removal of merchandise in the Zone. Customs is also tasked with enforcing all laws relevant to the Foreign-Trade Zones, and providing legal interpretation of those statutes, regulations and procedures.

  What are the advantages of an FTZ over a bonded warehouse, temporary importation bond, and duty drawback?

There are many advantages to a Foreign-Trade Zone over other U.S. Customs Programs. Depending on the program, some of the advantages are:

  • No time constraints on storing merchandise
  • Ability to get approval for manufacturing
  • Taking advantage of benefits for scrap materials
  • Not required to pay duties if product is re-exported

 

 

FTZ vs. Other Customs Programs

FTZ vs. Bonded Warehouses
  • Merchandise in an FTZ is not considered entered into the U.S. until it leaves the zone.
  • Merchandise can be left in the zone indefinitely whereas there is a 5 year limit in a BW.
  • Merchandise can be combined in a zone but not in a BW.
  • Merchandise can be received 24 hours/7 days a week* because there is no need to wait for the merchandise to clear Customs as in a BW.
  • It is less expensive to maintain a company’s inventory in a FTZ

*CBP approval for Direct Delivery is a privilege based on a good compliance history.

FTZ vs. Temporary Importation Bond
  • Merchandise can be left in the zone indefinitely. In a TIB, merchandise can only remain in U.S. for 1 year from date of import, with up to 2 additional 1-year extensions, then must be re-exported.
  • Zone benefits are limited to the FTZ site, whereas a TIB allows you to freely move the merchandise within the U.S.
  • Scrap can be entered into the U.S. FTZ site, but no scrap can be entered under a TIB - 100% of it must be re-exported.
  • Warehouse inventory is an ideal FTZ use, whereas TIB’s generally are not good for warehouse merchandise.
FTZ vs. Duty Drawback
  • FTZ’s eliminate 100% duty on exported goods, but duty drawback requires a claim for refund of duties paid on eligible goods, with 99% of duties paid back.
  • FTZs provide for immediate savings on duty on imported goods for export whereas duty drawback requires a lengthy process to recoup eligible duty paid.
  • Companies that currently are approved for duty drawback are ideal candidates for FTZ approval, plus receive added FTZ benefits.
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