Foreign Trade Zone update July 28, 2016
With MIASF as the applicant and the City of Fort Lauderdale as the grantor, Broward County is about to become the first recreational marine Foreign Trade Zone (FTZ) in the United States. Facilities and companies are in the final stages of becoming FTZdesignated as restricted-access sites that are considered to be outside the U.S. Customs territory, and as such, can defer, reduce, or eliminate Customs duties on foreign products. The Foreign Trade Zone label will allow individuals and marine industry companies to:
- move and display vessels or components during showcase season for up to four months without paying import duties • perform repairs and add value to merchandise within the FTZ without paying sales and excise taxes
- retain Country-of-Origin status for products maintained in the FTZ
- allow the handling of products not permitted to import into the United States due to EPA and/or other agency restrictions
- save all duties and taxes payable at importation if the vessel is titled outside the country
The primary financial savings associated with an FTZ include inverted duty, cash flow, duty reductions, paperwork reductions, and direct delivery. The advantages to inverted duty are that rates on components can vary according to the commodity. Combining various assembly components changes the Harmonized Code of the article, and for the foreign component only the new duty rate is the one for the finished article.
Under duty elimination, more than 51% of value is added at the FTZ, and the product is deemed to be made in the U.S., thereby eliminating the duty. MIASF expects the FTZ to be operational by the end of 2016.