Foreign-Trade Zone

The Port of Shelton has two Foreign-Trade Zone (FTZ) sites located at Sanderson Field and Johns Prairie Industrial Park; sites #9 & #10 of the South Puget Sound Foreign-Trade Zone #216.

Foreign-Trade Zones are areas treated, for the purpose of tariff laws and Customs entry procedures, as if outside the U.S. Customs Territory. Foreign and domestic merchandise may enter a zone for storage, assembly, manufacturing, processing or exhibition without being subject to Customs procedures, duties and federal excise taxes. Goods may be manufactured in a FTZ except when specifically limited by law. Customs fees and taxes are due at the time the merchandise leaves the zone. If the merchandise is exported from the U.S., duties are eliminated. Products may then be exported or sent into U.S. Customs territory, capitalizing on favored tariff rates.

Benefits of the Program

Duty Deferral
Duties are only paid once the merchandise enters U.S. Customs territory, which allows companies to maintain the cash flow necessary for operating needs. Merchandise can remain in a FTZ for any length of time.

Duty Reduction
Users of a FTZ can elect to pay duties on either the merchandise entering or the finished product, therefore allowing the user to chose a lower duty rate.

Duty Elimination
When merchandise is exported from the FTZ, all duties are eliminated. Duties are generally eliminated on scrapped, wasted, and destroyed merchandise.

Zone-to-Zone Transfer
Companies can transfer goods from zone to zone and pay duties only after it leaves the final zone into U.S. Customs territory.

This program was designed to stimulate economic growth and increase competition amoung nations for employment. Along with the benefits mentioned above, FTZ’s now have a weekly entry procedure, which minimizes merchandise processing and brokers fees to only one per week. In a case where you have multiple entries a week, a company could save a considerable sum, just on weekly entry savings.

Types of Foreign Trade Zones

General-Purpose Zones are typically warehouses offering space for use by importers and exporters. General-purpose zones can be within 60 miles or 90 minutes of a U.S. Port of Entry.

Subzones are granted to one company per location, typically a manufacturer. Subzones require less frequest on-site visits and less supervision and may be established outside the limits set for general-purpose zones.

The nature of your business determines which zone is right for you.

Request for Activation

Companies that want to operate a general-purpose zone or be granted status as a subzone should start by contacting the Port of Shelton.

If your company wants to apply for the right to operate either type of Foreign-Trade Zone, you need to provide the Port of Shelton with a written request for activation, to include the following:

1. Description of the zone sites covered by the original application
2. A statement regarding the general character of the merchandise to be admitted.
3. Along with the following supporting documents: initial blueprint of the area approved by the Board to be activated, a guage table (if applicable), a procedures manual in English describing inventory control and recordkeeping systems used in the zone, and written concurrence of the grantee (in the case where operator requests activation).

After receiving this information, the Port of Shelton will prepare a report to its Board of Commissioners for their consideration. In reviewing the application, the Commissioners will determine the economic impact, the number of jobs that will be created, how much money will be invested, and other similar factors.

It can take one (1) to four (4) months for Customs to make a decision once the written request is submitted. The decision of the Port Director will be the final determination of approval. A bond of no less than $50,000, which protects the revenue of the United States if the operator does not comply with Customs regulations, must be executed. Upon the Director’s approval and receipt of the bond, the zone may be activated and merchandise may be admitted under zone status.