Question

Which of the following is true regarding foreign trade zones?

a.Goods that enter a foreign trade zone are not subject to tariff until they leave the zone for destinations in the United States.

b.They are pieces of land physically located in foreign countries that are subject to the laws of the United States.

c.They must be located near seaports.

d.Goods sold in a foreign trade zone are not subject to U.S. income taxes.

e.All of these.

Answer 1

A Foreign Trade Zone (FTZ) is a special economic zone in the United States where imported goods can be stored, distributed, processed and used without being subject to customs duty fee. FTZs were created in 1934 under the Foreign Trade Zone Act. Its purpose was to create and retain employment and capital investment in the US and to increase the global competitiveness.

It has one of the advanstage of Customs duties and federal excise tax are deferred on imports until they leave the zone and enter the U.S. Customs territory. (Zone merchandise may move in-bond, Zone-to-Zone transfers without payment of duty.) Unlike bonded warehouses or temporary importing under bond programs, there is no limit on the length of time that merchandise may remain within the Zone.

Foreign-Trade Zones (FTZ) are secure areas under U.S. Customs and Border Protection (CBP) supervision that are generally considered outside CBP territory upon activation. Located in or near CBP ports of entry, they are the United States' version of what are known internationally as free-trade zones.They are pieces of land physically located in foreign countries that are subject to the laws of the United States

Option E all the above are true Statements