A new development, with an exciting element has been announced in the State of Utah. On May 14, Salt Lake City announced the new Foreign-Trade Zone (FTZ), which will be developed by The Rockefeller Group. Sitting on approximately 55 acres adjacent to the Intermodal Hub in the Northwest Quadrant of Salt Lake City, The Rockefeller Group has planned an industrial/business park.
What is an FTZ?
“A Foreign-Trade Zone is a restricted-access site, in or adjacent to a Customs port of entry, operated pursuant to public utility principles under the sponsorship of a corporation granted authority by the board and under supervision of the Customs service.”
Source: Regulations of the Foreign-Trade Zones Board (19 CFR Part 400)
What is significant about this business park?
Owned, managed and developed by The Rockefeller Group, this is the only active FTZ in the State of Utah. Designed in a flexible manner, this business park will accommodate all build to suit opportunities in the marketplace. The site is planned for development of 1.2 million square feet of warehouse distribution and/or light manufacturing facilities. In addition, all properties will have “state of the art” LEED certified buildings.
What does this mean for local, national and international businesses?
- Duty Deferral: Imported products admitted to the FTZ are not entered into the Customs territory until their withdrawal from the FTZ. Therefore, users obtain a cash flow savings by deferring Customs duties until the merchandise leaves the FTZ for consumption in the U.S.
- Duty Elimination: Imported products admitted to the FTZ and subsequently destroyed in the FTZ or exported from the FTZ are not subject to Customs duties.
- Duty Reduction: Imported products admitted to the FTZ can be placed in a special status that allows the merchandise to be classified and appraised in its condition as withdrawn from the FTZ. For manufacturers this means that an imported component with higher rate of duty can be classified and appraised in its finished product form, with a potentially lower rate of duty, thereby reducing the amount of duty owed.
- Zone-to-Zone Transfer: If the company utilizes more than one FTZ, merchandise may be transferred from zone to zone in order to extend the deferral benefits further. This benefit can be implemented up and down the supply chain by incorporating the activities of suppliers and customers.
- Direct Delivery and Weekly Entry/Export: From a just-in-time inventory perspective, the FTZ program offers significant benefits. Users may obtain permission from Customs to move merchandise directly from the port of arrival to the FTZ avoiding delays at congested ports and minimizing exams. On the outgoing side, users may obtain permission to ship unrestricted weekly (24 hours per day, 7 days per week) based on an estimate approved by Customs before the start of the business week. Broker fees and merchandise processing fees paid to Customs may be significantly reduced by filing one entry per week versus daily entries or one per shipment. Goods move in and out of the facility on an expedited basis allowing for a seamless supply chain from vendor to customer without maintaining unnecessarily high levels of inventory.
- Production Equipment: Certain duty deferral and reduction benefits also apply on production equipment admitted to the FTZ for assembly and testing prior to use in production.
Source: The Rockefeller Group Foreign-Trade Zone Benefits Overview
This is an exciting development in our state and represents a unique and outstanding opportunity to accommodate your international needs in The Rockefeller Group Foreign-Trade Zone in Salt Lake City.
William D’Evelyn is the Principal Broker and Managing Partner at Commerce CRG.
Reproduced with permission of The Enterprise, Utah’s business journal, www.slenterprise.com.