Foreign Trade Zones (FTZs) and Bonded Warehouses both offer duty deferral benefits, but overall benefits depend on a company’s business objectives, location, industry-specific activities, customs compliance capability, time restrictions, cost analysis, security measures, and potential trade policy changes. This session will explain the benefits and limitations of each, giving you the insider views you need to optimize duty deferrals.

FTZs

• Pros
  • Duty deferral
  • Entry of goods: No formal customs entry required for FTZs
  • Re-exportation: Easy to access international markets
  • Leverage Privileged Foreign Status
  • Tax savings
  • Inverted tariff advantages
• Cons
  • Limited location
  • Setup costs
  • Strict compliance and security requirements to maintain FTZ status, which can involve additional administrative efforts and potential penalties for non-compliance

Bonded warehouses

• Pros
  • Duty deferral
  • Re-exportation: Easy to access international markets
  • Tax savings
  • Inventory management to improve supply chain efficiency
  • Licensed and regulated by Customs authorities
• Cons
  • 5-year storage limit
  • Limited manufacturing
  • Only foreign status goods
  • Storage costs
  • Limited availability
  • CBP oversight and scrutiny