The move to create a designated Foreign Trade Zone along the southeastern coast of North Carolina may be steaming closer to port.
“Our application is completely through the public review period in the Federal Register and is in its final stages for approval," said Sebastian Montagne of the N.C. Department of Transportation, which would oversee the FTZ
A Foreign Trade Zone is like a “duty free” zone for businesses. It’s a secure area in or adjacent to a U.S. Port of Entry, authorized by the federal government. Merchandise of every description may be held in the Foreign Trade Zone without being subject to customs duties or other added value taxes.
That means foreign or domestic merchandise may enter these areas without a formal customs entry or the payment of customs duties or government excise taxes and without a thorough examination.
If the final product is exported from the U.S., no custom duty is levied. If the final product is imported into the U.S., duty and excise taxes are due at the time of transfer from the foreign trade zone and formal entry is made into the U.S. Duty is paid on the product itself or its imported parts, whichever is lower.
The growth in global trade and the need to level the competitive playing field on taxes has accelerated the use of trade zones, Montagne said. The FTZ program allows U.S.-based companies to defer, reduce or even eliminate Customs duties on products admitted to the zone, providing important benefits to businesses and industries.
“Final approval of the application rests with the U.S. Foreign Trade Zone Board,” Montagne said. “The board cannot for policy reasons disclose when they will file their final decision, but they have conveyed their understanding of just how important this application is.”
On a related note, the N.C. Foreign Trade Promotion Council and UNCW will present a conference about FTZ benefits Oct. 12-13 to bring attention to the trade zone and provide more information about resources for interested businesses.
For more information about the conference, go to ncftpc.org