Leesburg International Airport is joining more than 250 other foreign trade zones based in major ports of entry around the country including Orlando International Airport, Orlando-Sanford International Airport, Cape Canaveral, Miami and Pensacola.
These federally designated zones provide significant financial benefits to local businesses that import and export items, reducing or eliminating duties and fees for products shipped internationally. Private companies operating in foreign trade zones also may utilize streamlined customs procedures, making work faster and easier to accomplish.
The airport is eligible to create a foreign trade zone in a large part because it is a growing transportation hub and includes a U.S. Customs and Border Protection office among its many aviation services. The foreign trade zone helps businesses at the airport, but the same benefits can be extended to other nearby areas throughout Lake County or specific locations like Leesburg’s industrial and technical park off of County Road 470 and Florida’s Turnpike.
Here are some of the benefits for the designated foreign trade zone:
1) Duty deferral - Customs duties are paid only when imported merchandise is shipped into US Customs territory. Merchandise may be held in inventory in the FTZ without Customs duty indefinitely.
2) Exports - Customs duties are not paid on merchandise exported from the FTZ.
3) Defects, damage, obsolescence, waste, scrap - Customs duties are significantly reduced or eliminated on merchandise subject to defect, damage, obsolescence, waste, and scrap in the FTZ.
4) Nondutiability of labor, overhead and profit - In calculating the dutiable value on foreign merchandise removed from a zone, zone users are authorized to exclude zone costs of processing or fabrication, general expenses, and profit. Therefore, duties are not owed on labor, overhead, and profit attributed to production in a FTZ.
5) Inverted customs duty savings – FTZ users may elect to pay the duty rate applicable to component materials or merchandise produced from component materials - whichever is lower.
6) International returns - Merchandise exported and subsequently returned to the FTZ is not subject to Customs duties upon return. It can be repaired and re-exported without duty.
7) Spare parts - Unneeded spare parts may either be returned to the foreign vendor free of duty or destroyed, avoiding Customs duties.
8) U.S. quotas - Most merchandise may be held in the FTZ, even if it’s subject to US quotas. When the quota opens, the product may be immediately shipped into the US Customs territory.
9) Simplified import/export procedures - Delays in Customs clearances and duty drawback procedures are eliminated. Delivery times are reduced by direct shipments and there is a new Weekly entry provision for US Customs.
10) Quality control - The FTZ may be used for quality control inspections to ensure that only products that meet specifications are imported. Substandard goods can be destroyed before duty is paid.
11) Cargo insurance - Some FTZ users have negotiated up to 40% reduction in cargo insurance rates because imported merchandise is shipped directly to the FTZ, thus avoiding potential pilferage at deep-water ports and major international airports.
12) Security - The FTZ is subject to Customs supervision and security procedures, saving FTZ users expenses for security and insurance.
13) Inventory control - FTZ operations require careful accounting on receipt, processing, and shipment of merchandise. Firms find that the increased accountability cuts down on problems with inaccurate receiving and shipping as well as waste and scrap.
14) Consumed merchandise - Merchandise consumed in processing in the FTZ is generally not subject to Customs duties.
15) Inventory taxes - By federal statute, tangible personal property imported from outside the U.S. and held in a zone, as well as that produced in the U.S. and held in a zone for exportation, are not subject to State and local ad valorem taxes.
16) Exhibition - Merchandise may be held for exhibition without Customs duty payments. Many companies use FTZ's as display areas for merchandise and machinery.
17) Reduced insurance costs - The insurable value of merchandise held in the FTZ need not include the Customs duty payable on products. Therefore, insurance costs should be less.
18) Country of origin marking and labeling - No country-of-origin labels are required on merchandise admitted to the FTZ, saving a complicated procedure and up-front expense. If needed, the labels can be applied in the FTZ.
19) Zone-to-zone transfer - An increasing number of firms are making use of the ability to transfer merchandise from one zone to another. Because the merchandise is transported in-bond, duty may be deferred until the product is removed from the final zone for entry into the U.S. Customs and Border Protection territory.