Foreign Trade Zone (FTZ)
Created in the 1930’s by the U.S government, a FTZ is an area within the United States, in or near a U.S. Customs port of entry, where foreign and domestic merchandise is considered to be outside the country. Certain types of merchandise can be imported into a Zone without paying import duties. Customs duties and excise taxes are due when the merchandise is transferred from the FTZ for U.S. consumption. If the merchandise is re-exported, then no duties or taxes are paid on those items.
The Port of South Louisiana serves as grantee of Foreign Trade Zone 124, which is ranked #1 according to the FTZ Board’s Annual (2018) Report to Congress in the category of merchandise received (warehouse/distribution) into the zone and seventh in the category of merchandise exported (warehouse/distribution). Foreign Trade Zone 124 currently consists of companies such as Valero Refinery, Marathon Oil, Shell Oil Products U.S., Louisiana Offshore Oil Port (LOOP), Bollinger Shipyards, North American Shipbuilders, M-I, LLC, Baker Hughes, Excalibar Minerals, Halliburton Energy Services, Franks International, Kongsberg Maritime, and Offshore Energy Services, Inc. These companies, thanks to the FTZ program, are all able to compete on a level playing field with companies around the world due to the duty savings realized through this program. This, in turn, helps the local economies in terms of jobs, creating new ones and retaining the jobs already in place, as well as supporting the local vendors with supplies and services.
Part of our Alternative Site Framework (ASF) is Globalplex Intermodal Terminal, a port-owned site which encompasses 335 acres and located at Mississippi River Mile 138.5. Globalplex, a public facility, boasts two docks which allow for panamax-size vessels for bulk, break-bulk and container loading and off-loading; a 177,000 square foot paved open storage pad and an additional nine acres of paved open storage; over 240,000 square feet of warehouse space from seven warehouses onsite and 100,000 tons of cement storage in two cement domes. This site is approved and ready for FTZ use. Another ASF site is Castleton Commodities International, LLC.
Merchandise in a zone may be assembled, exhibited, cleaned, manipulated, manufactured, mixed, processed, relabeled, repackaged, repaired, salvaged, sampled, stored, tested, displayed and destroyed.
Production activity must be specifically authorized by the FTZ Board. (Production activity is defined as an activity involving the substantial transformation of a foreign article or activity involving a change in the condition of the article which results in a change in the customs classification of the article or in its eligibility for entry for consumption.)
U.S. Foreign Trade Zones received $793 billion in goods in 2017 and supported 440,000 U.S. jobs. Warehouse/distribution operations received nearly $290 billion in merchandise and exports amounted to over $112 billion. For more information, contact Lisa Braud, visit www.enforcement.trade.gov, or click on the links below.
- The Impact of Foreign Trade Zones on the 50 States and Puerto Rico – National Association of Foreign Trade Zones
- Why Foreign Trade Zones are Important to the Oil Refining Business in the U.S. – National Association of Foreign Trade Zones.
- Advantages of Foreign Trade Zones – Miller & Company, P.C.
- Foreign Trade Zone Service Providers
- Foreign Trade Zone Savings Analysis Worksheet for Manufaturing / Warehousing / Distribution – Miller & Company P.C.
- Foreign Trade Zone Costs
- Foreign Trade Zone #124 Zone Schedule