Foreign Trade Zone

Resolution 9691 FTZ 292 Zone Schedule

The City of Leesburg, as of January 2015, has been granted the authority of Foreign Trade Zone (FTZ) 292, under the alternative site framework (ASF). 

The ASF is an option for grantees for the establishment or reorganization of zones and can permit significantly greater flexibility in the designation of new “subzones” or “usage-driven” FTZ sites for operators/users located within the “service area.”

The City’s service area under the ASF is Lake County, Florida. The City is able to serve sites throughout the service area based on companies’ needs for FTZ designation. 

Foreign Trade Zone 292 includes:  Site 1 (818 acres) - Leesburg International Airport, 8807 Airport Boulevard, Leesburg.

The administration of the City of Leesburg’s FTZ has been assigned to the Leesburg International Airport. For further information, please contact the Airport Manager:  Phone: (352) 728-9786 ext. 1130

What are Foreign Trade Zones?

Foreign Trade Zones are Federally designated restricted-access sites near international trade gateways (such as ports or airports) that offer special administrative treatment of U.S. imports and exports. With an FTZ, importers and exporters are able to delay, reduce or eliminate the duty payments on foreign merchandise as well as use other cost savings mechanisms. The concept is for business to be able to conduct trade related activity within the U.S. and yet for Customs purposes, the activity within the zones be considered outside U.S. Customs territory. The U.S. Department of Commerce’s Foreign Trade Zones Board designates specific facilities, such as industrial parks, warehouses, or factories within an FTZ. U.S. Customs and Border Protection oversees the use of the facilities in the FTZs.

The FTZs are defined by a Service Area with a specifically designated boundary, which is typically within one county or a grouping of counties adjacent to a port of entry such as a seaport or airport. FTZs are considered adjacent if they are within 60 miles / 90 minutes driving time of the associated port of entry limits.

An FTZ is able to contain up to a combined total of 2000 acres in activated status, which may be comprised of several unrelated businesses and properties as long as they are used for FTZ activity or function as a magnet site intended to attract FTZ operators or users. An example of magnet sites are industrial parks intended to include businesses with FTZ activity. Individual sites within FTZs are officially designated as subzones.

The individual sites and their sizes within the Service Area of the FTZ itself have to be identified so that Customs and Border Protection can manage their oversight of the trade-related activity at the individual properties. The agency has responsibility to assure that the trade-related activity is conducted in compliance with the law. To encourage their use however, the sites within an FTZ can be designated speculatively in advance of specific-trade related activity or business use, subject to sunset limits that are generally five years. This provides time to attract businesses and develop properties that will be used for FTZ activity, without any additional FTZ approval time being required.

Why Foreign Trade Zones?

Availability of FTZs boost U.S. employment and business activity that otherwise might be located overseas. By lowering costs of activities associated with importing and exporting, Florida’s employment and sales can be higher. Through reduced costs and improved cash flow, exporters can be more competitive selling overseas and consumers benefit through lower cost imports.

The ability to add value to goods through assembly or alteration within Florida yet before being officially imported or after being officially exported is one way businesses take advantage of FTZs.

The primary financial reasons for using Foreign Trade Zones are:

Duty Deferral - Customs duties on imports only have to be paid when the goods are transferred out of the FTZ into Customs territory (or to U.S. NAFTA partner countries Mexico or Canada.)

Duty Elimination - Customs duties can be eliminated entirely if goods are re-exported from the FTZ to another country (outside of the NAFTA region with Mexico and Canada). Customs duties can also be avoided for imported goods in the FTZ that are destroyed, such as on defective merchandise that cannot be sold but which otherwise import duties would still have had to be paid.

Inverted Tariff Relief - This is when different tariff rates apply to products when transformed or incorporated into other products before entering Customs territory. The use of the FTZ for the location of the processing or transformation of the product allows the savings from use of the lower tariff rate.

Ad Valorem Tax Exemption - Merchandise imported and held in an FTZ for purposes of storage, sale, exhibition, repackaging, assembly, distribution, sorting, grading, cleaning, mixing, display, manufacturing, or processing is exempt from state and local ad valorem taxes. Merchandise held in an FTZ for exportation, either in original form or altered by any of the above methods, is also exempt from state and local ad valorem taxes.

Businesses also benefit from having no time limits on how long goods may be kept within an FTZ, allowing entry of imports or shipment of exports to align with quota periods or tariff rate changes, or exporters to claim credits or duty draw back from shifting goods to exported status. Insurance costs may be reduced because merchandise in an FTZ is considered in the U.S. for insurance purposes.

Source: Florida Department of Transportation, Florida’s Foreign Trade Zones: Foreign Trade Zones Facilitate Trade in Florida.