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Foreign Trade Zones. "Free Zones" in International Shipping
Foreign Trade Zone in international shipping (FTZ) is a yard guarded by U.S. Customs.
It is similar to a Bonded Warehouse, but the differences are:
Foreign Trade Zone established by Border Director with Customs approval. It requires record keeping (similar to bonded warehouses, just no 300 report). All are regulated by CFR 15 part 400.
Procedure to enter into Foreign Trade Zone:
Use form 214 to bring international shipping goods into Foreign Trade Zone. It is given LOT# (Inventory Control #). The Foreign Trade Zone Operator assigns 214 first.
4 (FOUR) TYPES OF STATUS IN Foreign Trade Zone:
Transfers with Foreign Trade Zone:
Other rules that apply to Foreign Trade Zone:
1. TEXTILE
- You CAN NOT change the category of international shipping textiles after entry into the Foreign Trade Zone if it is going to be a consumption entry.
- You CAN change the category of international shipping textiles after entry into the Foreign Trade Zone if it is going to be exported.
It is done with the purpose of avoiding the quota system. Then you CAN NOT make an entry under another category and avoid a quota.
2. TIME LIMIT
For consumption entry use 3461 + 7501.
After consumption entry is approved, YOU HAVE 5 (FIVE) WORKING DAYS TO TAKE INTERNATIONALLY SHIPPED GOODS OUT OF Foreign Trade Zone.
3. RECOVERABLE WAIST IS ALWAYS NON-PRIVILEGED. No exceptions!
4. Goods MOVE FROM Foreign Trade Zone TO BONDED WAREHOUSE:
- Non-Privileged CAN go to the bonded warehouse. OK.
a. Same port = 6043 - 7501 (in warehouse)
b. Different port = 7512 - 7501
- Privileged CAN NOT go to the bonded warehouse! Because there is conflict: In Privileged Foreign Trade Zone international shipping duty rate is frozen, but in bonded warehouses, duty is on the date of withdrawal.
- Foreign Trade Zone Restricted CAN, but for export or destruction only.
5. TIME LIMIT IF MOVE FROM Foreign Trade Zone TO BONDED WAREHOUSE:
If you have an international shipping warehouse entry and the product has been in Foreign Trade Zone for 3 YEARS, then you MUST CALCULATE TIME IN Foreign Trade Zone FOR THE TIME PERIOD IN THE BONDED WAREHOUSE. I.e., now it can stay in the bonded warehouse for ONLY 2 (TWO) YEARS before it will be declared unclaimed.
6. RECORDS KEEPING system etc., is THE SAME AS IN BONDED WAREHOUSES. Same rules and same international shipping regulations. Just one exception: THERE IS NO 300 REPORT. Only RECONSOLIDATION report.
7. SUSPECTED and PROHIBITED international shipping merchandise will be held outside of Foreign Trade Zone until it determines whether it is prohibited or not.
8. OVERAGES in FTZ reported in 214 and required a new 7501
 
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