Foreign-Trade Zones (FTZ) and bonded warehouses both let companies store imported goods in the United States without paying duties right away. They work differently, and the right choice depends on what you plan to do with the goods and for how long.
What is a Foreign-Trade Zone?
A Foreign-Trade Zone is a designated site in the United States, authorized by the Foreign-Trade Zones Board and supervised by U.S. Customs and Border Protection (CBP). For customs duty purposes, goods admitted to a zone are treated as if they were outside U.S. customs territory.
Main benefits:
- Duty deferral: duties are paid only when goods leave the zone for the U.S. market.
- No duties on re-exports: goods shipped from the zone to another country do not pay U.S. duties.
- Flexibility: goods can be stored, inspected, repackaged, assembled and, with approval, used in production.
- No time limit on storage.
What is a bonded warehouse?
A bonded warehouse is a facility authorized and bonded by CBP to store imported goods without paying duties until they are withdrawn.
Main characteristics:
- Goods can remain in the warehouse for up to five years from the date of importation.
- Duties are paid when the goods are withdrawn for consumption in the United States.
- Goods exported from the warehouse do not pay U.S. duties.
- Only limited handling is allowed, such as cleaning, sorting or repacking, under CBP supervision. Manufacturing is not allowed in most warehouse classes.
Side by side
| Foreign-Trade Zone | Bonded warehouse | |
|---|---|---|
| Authorized by | FTZ Board, supervised by CBP | CBP |
| Storage time | No limit | Up to 5 years |
| Duties | Paid when goods enter U.S. commerce | Paid when goods are withdrawn for consumption |
| Re-exports | No U.S. duties | No U.S. duties |
| Processing | Storage, handling, assembly and, with approval, production | Limited handling only |
Which one makes sense?
- Re-export or regional distribution: both can work. An FTZ offers more flexibility if the goods need to be handled or assembled.
- Long or uncertain storage: an FTZ has no time limit.
- Simple storage while waiting for a buyer: a bonded warehouse can be a practical option.
- Production or assembly: an FTZ with the corresponding approval.
The financial impact depends on the goods, their tariff classification and the operation. Review it with your customs broker and advisers before deciding.
How OEG Internacional can help
OEG Internacional does not operate its own FTZ or bonded warehouse. We coordinate the transportation, documentation and storage of your cargo with authorized FTZ operators and bonded facilities when the operation requires it.