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Foreign-Trade Zone Vs. Bonded Warehouse


 

BONDED WAREHOUSE

FOREIGN-TRADE ZONE

 

Formal Customs Entry

A bonded warehouse is within U.S. Customs territory, thus, Customs entry must be filed before goods enter a warehouse.

A FTZ is not considered within U.S. Customs territory, thus, Customs entry is filed just prior to removal of goods from Zone and only for amount of goods to be removed.

 

Customs Bond

Required for all warehouse entries.

No bond required!  All admissions to a zone are covered under FTZ operators Customs Bond.  No additional bond is required.

 

MPF Reduction

Consolidated Entry.

Consolidated Entry & Weekly Entry.

 

Payment of Duty

Merchandise is dutiable at the rate in effect at time of withdrawal.

Duties are due only upon entry for U.S. consumption.  The rate can be that which is in effect at time of admission or withdrawal.

 

State & Local Inventory Tax

 

 

Tax is levied on January 1st of each year on all merchandise.

Foreign merchandise is not taxed.  Domestic merchandise to be exported is not taxed.

 

Permitted Activity

Merchandise may only be cleaned, repackaged, & sorted under Custom supervision.

Merchandise may be stored, inspected, repackaged, repaired, tested, cleaned, sampled, displayed, manipulated, mixed, processed, assembled, salvaged, destroyed, or re-exported.

 

Manufacturing/Processing:

Foreign Bonded only.

Domestic, Foreign (Bonded), NAFTA, etc.

 

Waste & Damaged Goods

Duty owed on entire shipment entering a bonded warehouse.

No duty paid on waste, damaged or otherwise non-usable merchandise that is destroyed in the Zone.

 

Goods with Documentation Labeling Defects

 

May not be Entered.

May be admitted and problems corrected.

 

Domestic Merchandise

May not be Entered.

May be admitted without Customs Permit and co-mingled with foreign merchandise.

 

Drawback of Customs Duties or Federal Excise tax

Does not apply.

May apply to goods admitted to the Zone if approved by Customs.

 

Storage Period

Not to exceed five years.

Unlimited [in perpetuity].

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