Foreign Trade Zone #136
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For information regarding growth opportunities at Melbourne International Airport, please contact:

Jack M. Schluckebier, Ph.D
Director of Land Development

Phone:
Office: 321-723-6227, Ext. 211

Email:
JSchluckebier@mlbair.com
 

 

     Operating in an FTZ cuts trade costs

          Simplify Customs process, reduce transit time

The concept of the Foreign Trade Zone (FTZ) was created to encourage international trade by American companies and to preserve American jobs. It provides benefits that can increase a company’s bottom line and enhance its competitive edge.

An FTZ is an area inside or near a U.S. Customs port of entry where foreign and domestic merchandise is considered to be “outside” the United States and exempt from duty, unless the merchandise is transferred for consumption within the United States.

Port Canaveral is grantee of FTZ 136. The zone encompasses more than 4,000 acres, with hubs located in north, central and south Brevard County including Melbourne International Airport. That means all parcels within the airport grounds are eligible for duty-free status under certain conditions.

The zone currently has six operators and one sub-zone operator. FTZ 136 General Purpose sites include Port Canaveral, Melbourne International Airport, Space Coast Regional Airport, Spaceport Commerce Park and Tate Industrial Park.

Advantages of operating within an FTZ include deferral, reduction and possible elimination of duty, tighter inventory control and potential direct-delivery benefits that reduce long-hold times typical of crowded ports of entry.

Merchandise entering a FTZ may be assembled, manufactured, repackaged, tested, stored, destroyed, sampled, salvaged, mixed, relabeled, processed and manipulated.

Cutting Trade Costs



No Duty on Domestic Content or Value Added

Any value added to a product in an FTZ (including the cost of labor, overhead and profit) is exempt from duty, unlike value added in overseas production operations. The more activities a company conducts within an FTZ, the more it can save.

Duty-Free Storage

Duty is deferred on items imported into and stored within an FTZ, until they leave the zone for domestic sale. That helps companies avoid tying up money in Customs duties on inventory. Most quota restrictions also do not apply to FTZs.

No Duty on Re-Exports and Sales to the U.S. Military or NASA

Components or raw materials imported for manufacturing within an FTZ can be exported as finished products without paying duty, and finished products sold to the U.S. military or NASA are exempt from duty.

Relief from Inverted Tariffs

In some cases, a component or raw material can carry a higher duty rate than the finished product. To eliminate the penalty on American manufacturers of such products, FTZ rules allow participants to pay the duty rate applicable to either the component materials or their finished product, whichever is lower.

Waste and Scrap

No duty is charged on most waste and scrap from production operations within an FTZ.

Rejected or Defective Parts

If imported merchandise is faulty, it can be destroyed or returned for replacement without any duty charge. Outside an FTZ, a company might be forced to pay double duty – first on the defective item, then on the replacement.

Reduced Processing Time and Fees

Under Weekly Entry procedures, zone users have the option of filing one Customs Entry per week rather than a separate Customs Entry for each entry into the United States. If a business makes entry on multiple shipments each week, it will save substantially on processing time and fees.

Reduced Transit Time

Direct Delivery allows receipt of shipments of the same items into an FTZ without a formal Customs release. This eliminates time-consuming documents and physical inspections of every delivery, and can shorten transit time.

FTZ 136 is a member of the not-for-profit National Association of Foreign Trade Zones. For detailed information, visits the association's
website at www.naftz.org.