HomeMy WebLinkAbout5/11/2005 - STAFF REPORTS (9) PALM SPRINGS
FOREIGN-TRADE ZONE #236
YOUR OPPORTUNITY
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Save Money, Defer Duties and Improve Cash Flow
Geographic area considered outside U.S. Customs
Territory, adjacent to Customs Ports of Entry.
Foreign and domestic merchandise can be
admitted to the FTZ without the payment of
Customs duties, related fees and federal excise
taxes.
C,5111 I zones
FTZ Airport Boundaries 877 acres
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9 � s
T
FTZ Site
14-acres at the
Train Station
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To stimulate economic growth and development in
the United States.
The FTZ program was designed to promote
American competitiveness by encouraging
companies to maintain and expand their operations
in the U.S.
Removes certain disincentives associated with
manufacturing in the U.S.
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+Foreign Trade Zones Board (FTZB)
Issues licenses (grants) and regulates the FTZ
Program under Department of Commerce
National Association of FTZ (NAFTZ)
mu Non profit organization representing Grantees,
Operators and Users of the Zone
PUS Customs & Border Protection
Handles day to day monitoring of zone activity
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Grantee
The recipient of a grant of authority.
Operator
s Corporation,partnership or person that operates a zone
or subzone under the terms of an agreement with the
zone Grantee.
User
E; The party using a zone under agreement with the zone
Grantee or Operator.
Subzone Operator/User
Special purpose zones for operation by individual firms
that cannot be accommodated within an existing zone.
General Purpose Zones
Usually located at ports or industrial parks
�E3 Must be open to multiple zone users
Most common use warehouse and distribution
Subzones
3 Are special purpose zones usually at a manufacturing
plant
La Generally approved for use by one company for a
specific activity
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Deferral of Duties
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Duties are paid only when and if merchandise is
transferred in to U.S. Customs Territory. Equates to
cash flow savings.
Elimination of Duties
u No Customs duties are paid on merchandise exported
from an FTZ.
Reduction of Duties - Inverted Tariff
Users are allowed to elect the lower duty rate of either
foreign inputs or the finished product manufactured in
a zone.
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Quotas —U.S. quota restrictions do not apply to merchandise
admitted to zones,but will apply if and when the merchandise is
subsequently entered into the U.S. Commerce.
Zone to Zone Transfers—No duty is paid because
merchandise is transported in-bond, and duty may be deferred until the
product is removed from the final zone for entry into U.S. Customs
territory.
Intangible Benefits—inventory control system run more
efficiently; streamlined reporting qualifies for eligibility to take
advantage of special Customs procedures such as direct delivery and
weekly entries,facilitating timely movement of cargo in and out of the
country.
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1-9 t r
-Merchandise entering a zone may be:
Assembled Salvaged Relabeled
Displayed Stored Mixed
Tested Destroyed Repaired
Repackaged Cleaned Sampled
Processed Manipulated
Economic Development Tool
Promote and Facilitate International Trade
Job creation and retention
Promote Investment
KEEP JOBS AND INVESETMENTS IN THE
UNITED STATES
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250 zones in all 50 States and Puerto Rico
450subzones
$247 Billion combined value of shipments into
general purpose zones and subzones
Approximately 330,000 people employed in zones.
Industries accounting for most zone manufacturing
activities are: oil refining, automotive,
pharmaceutical and electronic products
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FTZ Application prepared and submitted by the
PS Airport staff in 1997
Grant of Authority issued February 3, 1999
2000 FTZ Assigned to the Economic
Development Department
Customs issued approval to activate zone site on
March 9, 2005
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September 22, 2000— Seminar held to educate the
Community about the Zone. 89 attendees
2000—Develop Operator Agreement and Tariff Schedule
2002—Completed a minor boundary modification
2001 —Hosted lunch/tour for Mexicali delegation
2000—2005 -Press releases, articles, FTZ included in all
promotional materials,tradeshows and conferences
2003-2006—Contracted with Consultant to activate and
promote the FTZ
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Conference explains foreign trade zone
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OUR VOICE
Foreign trade zone:
a job-creation catalyst
Newly activated status WHAT ARE THE BENEFITS
makes region competitive OF THE ZONE PROGRAM?
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2000-01 $39,000
2001-02 $41,233
2002-03 $15,000
:> 2003-04 $14,544
2004-05 $ 6,723
+D Airport Industrial Land
Sept. 11 tragedy affected our ability to market land for warehouse
and distribution operations.
No multi-purpose or bonded warehouses
o There are no existing warehouses operating in the Coachella
Valley that serve multiple users.
Feasibility analysis of existing businesses
0 Consultants have met with numerous prospective users but have
not found one that would benefit from the FTZ Program.
ai Time and Money
City budget challenges have reduced staff s ability to devote time
to the FTZ program. Marketing budget has been cut considerably.
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