A strike by workers at U.S. East Coast and Gulf Coast ports expected to begin Oct. 1 highlights the need for U.S. importers to be prepared for this and other types of supply chain snarls. Foreign-trade zones can be a valuable part of those preparation efforts.
An FTZ is a defined physical area within the U.S. that, for customs entry purposes, is treated as being outside U.S. borders. In FTZs companies can use special customs procedures that allow domestic activity involving foreign items (including storage) to take place prior to formal customs entry. Goods imported into an FTZ and subject to allowable operations are not subject to duty if they are exported to other countries.
Depending on how long the anticipated strike continues, companies importing goods into the U.S. may be unable to transport those goods to their destinations and may need to find places to store them until the strike is over and any resulting backlog of cargo shipments is cleared up.
U.S. FTZs may be an attractive option for such storage if warehouse space is limited or the cost of such facilities is prohibitive. In such cases, ST&R professionals can work quickly with FTZ grantees and local U.S. Customs and Border Protection officials to secure new warehouse storage space at ports, airports, and industrial parks. In addition, setting up such arrangements in advance of a potential emergency can save companies money and give them an advantage over their competitors.
For more information on this and other ways FTZs can benefit your business, please contact attorney Scott Taylor at (212) 549-0153 or via email.
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