Items to Consider When Investigating FTZs
- Look Before You Leap
- Why FTZ Cost/Benefit Studies
- Keys To Information Gathering
- Limitations: Special Commodity
- FTZ Considered In Context With
Other Trade Agreements
- Specific FTZ Benefits to Evaluate
- Review Of Start-Up And Annual
Look Before You Leap
Why FTZ Cost/Benefit Studies Are Critical
- FTZ operations can deliver substantial financial savings
and operational flexibility.
- FTZs do create additional costs and obligations.
- FTZs are not meant for every U.S. importer and exporter.
- When doing a FTZ cost/benefit analysis, be thorough. Your
FTZ study is only valuable when all pieces of the import/export
puzzle are considered.
- Consider FTZ results over an extended period of time,
particularly if facts and laws are expected to change in
Keys To Information Gathering
- Go to the source of the information.
- Specific company data is critical.
- Know exactly what information you need and how you will
- Identify a sponsor to coordinate information from different
Limitations: Special Commodity Issues
- Always check for product-specific limitations in FTZ or
- Example: Steel Safeguards Case (Proclamation 7529,
March 2, 2002)
- See published FTZ Board Orders for similar products and
- Any grant limitations from FTZ Board?
- Example: Textile Product Restrictions (Order No.
1110, July 20, 2000), Standard Shipyard Restriction
(Order No. 1210, February 25, 2002)
FTZ Considered In Context With Other Trade Agreements
- FTZ studies must consider the interplay between FTZ benefits
and trade agreements relevant to the importing/exporting
activity at hand.
- Trade agreements can create FTZ limitations or may produce
better results without U.S. FTZ operations.
Specific FTZ Benefits to Evaluate
- MPF savings
- Reduced through weekly entry, if U.S. consumption
- Eliminated if products exported from zone out of
- Broker fee savings
- Mirrors scenario of MPF savings
- Flexibility through direct delivery and weekly entry processes.
- Ability to cure problems with merchandise.
- Quotas generally inapplicable in FTZs, although benefits
Review Of Start-Up And Annual FTZ Costs
- FTZ fees and anticipated third-party payments
- FTZ Board, Department of Commerce fees
- Additional general purpose zones..... $3,200
- Non-manufacturing special purpose subzone..... $4,000
- Manufacturing special purpose subzone..... $5,500
- Expansions..... $1,600
- Grantee fees
- Application fee
- Annual user fee
- Consultant fees
- Local government agreements
- Employee requirements both for implementation and ongoing
- Inventory control and record keeping needs - internal
- Physical security requirements
- Bond cost
- Cost/benefit studies are essential.
- Accurate company-specific information is the key to good
- FTZ is one factor among many that importers/exporters
- FTZ cannot be viewed in isolation.
- FTZ is not for every company.
- With careful planning, a FTZ can provide substantial benefits
well worth the costs.