A firm wanting to import items duty free and then use the component for local production of a product that is then exported would most likely utilize a(n):
A) Duty-free Territory
B) International Cross Docking Zone
C) Foreign Trade Zone
D) International Processing Center

Question

Quizplus · Accepted Answer

The scenario described in the question is a classic example of how a Foreign Trade Zone (FTZ) can be utilized. An FTZ is a specific geographic area designated by the U.S. Government where goods can be imported without formal entry and the payment of customs duties or excise taxes. Once the items are in the zone, they can be used for manufacturing, processing, assembly, or even testing. Companies operating within an FTZ can reduce costs and improve competitiveness by deferring, reducing, or even eliminating the customs duties and taxes that would otherwise be owed on imported components. Additionally, if the final product is then exported, there is no duty payable on the US-made portion of the product, further enhancing the benefits of the FTZ program.

A Firm Wanting to Import Items Duty Free and Then