GDLSK: Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP
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Foreign Trade Zones and Bonded Warehouses

Logistics providers and importers can obtain significant cash flow benefits by deferring duties on stored goods and can minimize the total duty liability on manufactured items under one or more of these programs. Foreign Trade Zones (FTZs) are secure areas located in or near US ports of entry. Legally, FTZs are considered to be outside the customs territory of the US for duty assessment and entry purposes. Consequently, duties are deferred on goods stored in an FTZ until such time as they are withdrawn for consumption in the United States. Moreover, FTZ users may avoid duties on goods re-exported directly from an FTZ.

Where goods are manufactured in a zone, the FTZ user may pay duty at the rate applicable to either the component materials or the finished product, whichever rate is lower. Users of Customs bonded warehouses enjoy similar benefits: deferred duty payment on stored goods, no duties on re-exported goods, and in some cases, reduced duties on goods manipulated in a bonded warehouse. Temporary Importations under Bond (TIB) may be utilized to temporarily import merchandise into the United States for certain specified purposes without the payment of duties provided that they are subsequently exported. We counsel our clients in analyzing the comparative utility and applicability of these different duty deferral programs. We are also able to assist in the application process, implementation phase, and ongoing program compliance.

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