- Duty Exemption – There are no duties or quota charges on re-exported merchandise from the FTZ.
- Duty Deferral – Customs duties and federal excise taxes are deferred on imports until they leave the FTZ and enter U.S. Customs territory. Duty on imported “production equipment,” is also not paid until the equipment is to be used for manufacturing activity.
- Zone-to-Zone Transfers & No Time Limit in an – Merchandise may be transferred under bond from one FTZ to another without payment of duty. Duties are not owed until the merchandise is finally admitted into U.S. Customs territory.
- Duty Reduction (Inverted Tariff) – Companies can choose to pay the duty rate of finished products that have a lower tariff than its foreign components.
Foreign Trade Zones
Connecticut companies have access to 4 foreign trade zones, stretching along the shoreline from Bridgeport, New Haven, and New London to Windsor Locks in north central Connecticut. Created to encourage international trade, economic development, and job creation in the United States, the FTZ program expedites and encourages foreign commerce by lowering the cost of U.S. based operations engaged in international trade.
Applicants for FTZ designation in Connecticut are processed under a procedure that takes no more than 30 days, a streamlined approach that’s contributed to Connecticut’s rank as 11th of the top 25 states for FTZ production export activity (Foreign Trade Zone Board, 2020).