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Foreign-Trade Zone 101

Foreign-Trade Zone 101. June 20, 2013. Grumpy Cat. Grumpy Cat. Foreign-Trade Zone. General overview Costs and other considerations Statistics. What is a Foreign-Trade Zone?. Restricted access site designated by the U.S. FTZ Board Outside U.S. Customs territory

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Foreign-Trade Zone 101

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  1. Foreign-Trade Zone 101 June 20, 2013

  2. Grumpy Cat

  3. Grumpy Cat

  4. Foreign-Trade Zone • General overview • Costs and other considerations • Statistics

  5. What is a Foreign-Trade Zone? • Restricted access site designated by the U.S. FTZ Board • Outside U.S. Customs territory • Special Customs procedures allowed

  6. What is a Foreign-Trade Zone? • The FTZ Board provides a Grant by Board Order to a local organization to sponsor zone projects in its community. An individual company cannot apply directly to the FTZ Board without the sponsorship of a local grantee organization*. *Exception for Production Notifications

  7. Purpose of FTZ Program • Created by Congress in 1934 • Expedite, facilitate & encourage U.S. participation in Int’l trade • Increase global competiveness of U.S.-based companies • Create and/or retain jobs in the U.S. • Allows delayed or reduced duty payments on foreign merchandise, plus other savings

  8. Zone Types • Magnet (Multiple Users) • At ports, industrial parks, etc. • Must be located within 60 miles or 90 minutes driving time from CBP port of entry. • Does not have to be located within a grantee’s service area. • Subject to 5-year sunset provision.

  9. Zone Types • Usage-driven (Single User) • Subzone (Single User) • Can be designated via simplified ASF boundary modification. • Designation tied to the specific company/activity and limited to the space needed by the company. - Must be located within a grantee’s service area. - Subject to 3-year ASF sunset provision.

  10. Zone Types • Subzone • Traditional application process (lengthier than ASF). • No mileage/location limit relative to CBP port. • For use by one company for a specific company/activity. • Sponsored by Zone grantee.

  11. U.S. Customs Oversight • Before a company can conduct FTZ activity at a site authorized by the FTZ Board, the company must obtain CBP approval for “activation” of the space to be used. • All FTZ activity is under CBP supervision. • Companies operating in FTZs must meet CBP requirements for security and inventory control.

  12. Roles Secretary of Commerce Secretary of Treasury

  13. FTZ Application Process

  14. Legal Agreements • Operating Agreements • Property Owner Agreements • IGA • Other

  15. Feasibility Analysis is Key

  16. FTZ Application Fees* • Grantee • FTZ Board • Consultant *Not all inclusive

  17. Other Costs to Consider* • Annual Zone Fees • Legal Fees • Security Costs • Administrative Costs • Software/IT Costs • FTZ Operators Bond *Not all inclusive

  18. Arizona Grantees • FTZ No. 60 Nogales • FTZ No. 75 Phoenix • FTZ No. 139 Sierra Vista • FTZ No. 174 Pima County • FTZ No. 219 Yuma • FTZ No. 221 Mesa • FTZ No. 277 Western Maricopa County

  19. Phoenix FTZ Users • Abbott Laboratories – Casa Grande • American Italian Pasta Company – Tolleson • Conair Corporation – Glendale • The Gap, Inc. - Phoenix • Goodrich Aircraft Interior Products - Phoenix • Intel – Chandler • Microchip Technology – Chandler and Tempe • PetSmart – Phoenix • SUMCO Southwest Corporation – Phoenix

  20. 2011 FTZ Board Annual Report to Congress • 50 states plus Puerto Rico with zone projects • >$600 billion of merchandise handled by zones • ≈340,000 employees at active zone facilities • $54.3 billion exports

  21. Source: Annual Report of the Foreign-Trade Zones Board - 2011

  22. Phoenix Foreign-Trade Zone 75 Denise Yanez FTZ Administrator City of Phoenix 200 W. Washington St, 20th Floor Phoenix, AZ 85003 (602) 256-4370 Denise.yanez@phoenix.gov

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