Lincoln County is included in Foreign Trade Zone No. 203
A foreign trade zone (FTZ) is an area within the United States that the government treats as if it is outside of U.S. Customs territory. Certain types of merchandise can legally be imported into a FTZ without going through formal customs entry procedures or paying import duties. Once merchandise has moved into an FTZ, you can do just about anything with it. You can display or re-package goods, repair or destroy damaged ones. You can assemble component parts into finished products and re-export either the parts or finished products. Inside foreign trade zones, many companies are able to achieve such dramatic savings that they can effectively compete with manufacturing plants located outside the U.S. How much your company can save by operating in an FTZ obviously depends on a long list of factors unique to your business. Here are some of the most likely benefits: Inverted Tariff Benefits–In many instances, duty rates are higher for component parts than the rates charged on an assembled product. For example, an imported machine part may require a duty rate of 8%, while a finished machine that included the part may be charged at only 3% duty rate.
Improved Cash Flow–By delaying tax and customs duty payments, you can use cash for other needs. Goods enjoy a dutyfree status until they enter the customs territory of the United States. Goods may also be transferred to or from other ports of arrival in the U.S. to a foreign trade zone under approved U.S. Customs procedures without a Formal Customs Entry or incurring duty charges. Imported merchandise can be re-exported without paying duty charges.
Lower inventory costs–When companies pay taxes and insurance premiums on inventory imported from abroad, the value of inventory normally includes any duties, taxes and brokerage fees. Those costs are lowered for an inventory maintained in an FTZ because no duty is charged until the goods enter the U.S. Customs territory.
Security and Quality Assurance–The U.S. Customs Service requires extra security measures for FTZ’s, so they are normally more secure than areas immediately around them. With stricter security and because federal penalties are assessed for taking goods out of an FTZ without authorization, there is usually less theft from an FTZ. Some insurance companies charge lower premiums on goods stored in an FTZ.
Distribution Savings–Freight carriers usually charge by weight or size and in many instances, partially disassembling an item enables a shipper to fit more items into a container. When a company ships parts in bulk for assembly in an FTZ, it can often lower its per unit transportation costs.
Other Benefits–Imported goods subject to quota limits can be held in an FTZ until the quota reopens. Scrap or waste materials may be thrown away and the amount of duty paid lowered by the value of the scrapped goods. Your business can also elect to freeze duty rates at the rates in effect when the goods enter the zone. This is valuable when you know duty rates are scheduled to increase or when a manufactured product’s duty rate is higher than that of its components. You can also elect to pay the rate in effect when the merchandise leaves the zone. This produces savings when you know duty rates are scheduled to go down.
The Foreign-Trade Zones Act was passed in 1934 as part of the New Deal legislation with the purpose of stimulating and expediting international commerce. The Port of Moses Lake received authority in October 1994 to establish FTZ No. 203 at the Grant County Airport. In June of 2010, the Port was approved to expand to Counties within a 60-minute or 90-mile driving range. Lincoln County qualified and, in June 2011, was approved by the Foreign-Trade Zones Board for inclusion in the Port of Moses Lake FTZ No. 203. If you would like to know more about the Foreign Trade Zone, please contact the LCEDC Director or the Port of Moses Lake at 509-762-5363.