Participation in a Foreign Trade Zone (FTZ) can help North Dakota exporters gain two major benefits: Duty minimization and Ease of Distribution. Foreign Trade Zones can save companies time and money because foreign goods within the FTZ are considered to be in international commerce and not subject to customs duties unless or until they enter the U.S. In addition, raw materials, parts and components can enter duty-free. Goods can then be assembled, manufactured or processed – and the final product exported – without paying custom duties.
The Fargo Airport Authority is an authorized grantee for FTZ #267 and can manage Subzones – or Single Purpose Zones – anywhere in the State of North Dakota. These Subzones allow individual companies that import and/or re-export products to take advantage of FTZ benefits without having to physically relocate within the FTZ General Purpose Sites.
As noted above, companies manufacturing products in FTZ subzones can realize a number of important benefits. These include the following:
- Duty savings resulting from “inverted tariff” benefits
- Deferral of payment of Customs duties until after imported materials have been used in manufacture, and finished goods are ready to be withdrawn for consumption
- Elimination of need for duty drawback programs with respect to exported merchandise. (The cash flow from FTZ operations is superior to that realized in drawback, since the importer need not make an “up front” payment of Customs duties)
- Exemption from, or deferral of, many additional taxes and fees
There is some added expense associated with operating a company’s facilities as an FTZ subzone; however, many companies have found that these added costs are more than offset by the long-term tariff benefits available.
North Dakota’s general-purpose FTZ’s are located in Fargo and Grand Forks. The Grand Forks FTZ consists of 48 acres located at the Grand Forks International Airport and in the Grand Forks Industrial Park. The Fargo zone is adjacent to a U.S. Customs and Border Protection port of entry at Hector International Airport, and covers six sites on 1,026 acres of land.
Companies interested in learning about Subzone status can contact the Fargo Airport Authority at (701)241-1501
More Information
Other sources of information for Foreign Trade Zones include:
- U.S. Department of Commerce, Foreign Trade Zones Board – http://ia.ita.doc.gov/ftzpage/
- National Association of Foreign Trade Zones – http://www.naftz.org/