Foreign Trade Zone: New London County
Foreign Trade Zone: New London County
All of New London County is now part of Foreign Trade Zone #208, which is operated by the New London Foreign Trade Zone Commission. This is an expansion of the original FTZ, which encompassed only the area around State Pier in New London. Now, any business in the county that chooses to be part of the FTZ can defer, reduce, or eliminate customs duties on foreign products that are brought into the zone to be stored, exhibited, assembled, manufactured, processed, cleaned, manipulated, mixed, repaired, relabeled, repackaged, salvaged, sampled, tested, or destroyed.
These benefits are available because a Foreign Trade Zone is considered outside of U.S. Customs territory.
Additionally, FTZ status provides your company with access to streamlined procedures for the import of foreign materials, which can help you deliver your product faster and stay competitive with overseas manufacturers.
IN THE NEWS
New London gains approval for expansion of foreign trade zone
The Day, January 2, 2021
The federal government has approved the city’s application to expand its Foreign Trade Zone to all of New London County. The expansion is viewed by local officials as a way to stimulate economic growth by providing companies with savings…
New London looks to expand benefits of Foreign Trade Zone
The Day, June 25, 2019
With the advent of offshore wind companies coming to New London and an increase in activity expected at State Pier in the coming years, the city is making a move to expand the boundaries of its scarcely used Foreign Trade Zone…
THINGS TO KNOW
- Customs duties are not paid on products and materials exported from foreign-trade zones.
- No duties or quota charges on re-exports.
- Customs duties and federal excise tax on imports can be deferred.
- Foreign goods and domestic goods held for export are exempt from state and local inventory taxes.
- FTZ status may also make a site eligible for state and local benefits unrelated to the FTZ Act.
- Zone users may elect to pay the duty rate applicable to either the original foreign material or the finished product manufactured from the foreign material, whichever is lower.
- No duties are owed on scrap/waste material.
- Retail trade is prohibited in Foreign Trade Zones.
- Zones provide the opportunity to reduce cycle time by expediting the receipt of foreign-sourced material and filing summary entries only once per week. This makes many U.S. operations more cost-competitive with overseas operations.
- Expansion of the FTZ to any business in New London County is consistent with the goals of statewide, regional, and city-endorsed strategic planning efforts.
- This expansion has been the focus of and therefore is endorsed by regional agencies such as the Southeastern Connecticut Enterprise Region (seCTer) and the Southeastern Connecticut Council of Governments (SCCOG), and others.
- The New London FTZ Commission collaborates with these regional agencies to jointly deliver a host of important services that will help create new and emerging opportunities for international trade and foreign direct investment.
- For more information on the New London Foreign Trade Zone, contact Tom Bombria at the City of New London Office of Development and Planning, (860) 437-6346 or email@example.com.
Becoming an FTZ could save you thousands in duties, merchandise processing fees (MPF), and more. More and more U.S. companies are using Foreign Trade Zones (FTZ) to better manage their global supply chain costs. Here are seven advantages that showcase FTZ as a competitive alternative to a domestic distribution center.
- Duties are only paid when imported merchandise enters U.S. Customs territory. Goods may be held without payment of duty in an FTZ until sold, allowing for improved cash flow.
No Duty on Value Added
- There are no duties on labor, overhead, or profit to operations performed within an FTZ.
- There are no duties on FTZ merchandise that is exported, transferred to another zone, or destroyed. This eliminates the need to manage costly and time consuming duty drawback programs.
Save with One Weekly Entry
- Customs allows for weekly entry processing, which benefits importers because they pay a single entry fee and may realize significant MPF savings.
- The user may elect to pay the duty rate applicable to the component materials or the finished goods produced from raw materials, depending on which is lower.
Inventory Tax Incentives
- Companies that hold goods in an FTZ may be exempt from inventory taxes.
- By using an FTZ, the internal controls requirements of the Sarbanes-Oxley Act (Section 404) are met. FTZ and Customs Trade Partnership Against Terrorism (CTPAT) are complementary programs. Participating in both results in increased internal and external security enhancements.
HOW TO APPLY
Specific production authority within a FTZ is required if the activity:
- Results in a change in the HTSUS number at the 6-digit level of any imported component.
- Involves the substantial transformation of a foreign article.
- Results in a change in the eligibility for entry of any foreign article.
To obtain authority to conduct production activity within a designated FTZ site, the first step is to submit a “Production Notification”.
The production notification includes a list of imported components and finished products as well as a brief summary of the activity.
The standard processing time for production notifications is 120 days and generally includes a 40-day public comment period.
If the FTZ Board determines not to authorize certain activity at the end of the notification process, the applicant may choose to use the more extensive “application” process for production authority.