Foreign-Trade Zone No. 196

9,600 acres at Alliance are designated as Foreign-Trade Zone (FTZ)  No. 196.  The designation provides benefits to global companies that simply are not available through any other legal mechanism. Hillwood guides companies throughout the FTZ process, from education to implementation to operation. The following are the ten most significant FTZ benefits:

Improve Cash Flow
Hold merchandise in inventory; transfer it to another FTZ; export or destroy it without paying U.S. Customs duties until the imported merchandise is shipped into U.S. Customs territory.

Reduce Inventory Tax
Tangible personal property held in FTZ status is not subject to state and local ad valorem taxes

Weekly Customs Entries (Manufacturing and Distribution)
Reduce paperwork and expense.  Companies may consolidate multiple customs entries into one per week, reducing customs brokerage fees and merchandise processing fees

Exports
Exporting from an FTZ eliminates U.S. Customs duties on exported merchandise.

Inverted U.S. Customs Duty Savings
Elect to pay the duty rate applicable to either component materials or the finished product produced from the component material, whichever is lower.  The reduction or elimination of U.S. Customs duties is significant.

Waste / Scrap / Damage / Obsolescence
Reduce or eliminate U.S. Customs duties on merchandise subject to these accountable losses.

Non-Dutiable Labor, Overhead and Profit 
Eliminate delays related to U.S. Customs duties on labor, overhead and profit for production in an FTZ.  If the same production operation occurred outside the United States, the value of the labor, overhead and profit would be subject to U.S. Customs duty.

Reduce Supply Chain Time
Eliminate delays related to U.S. Customs clearances.  Special direct delivery procedures expedite the receipt of merchandise in company facilities, reducing inventory cycle time.

U.S. Quota Management 
Most merchandise may be held in an FTZ, even if it is subject  to U.S. quota restriction.  When the quota opens, the merchandise may be immediately shipped into U.S. Customs territory.  Voluntary restraint and orderly marketing agreements are not impacted by FTZ use.

Insurance Costs
The insurance value of merchandise held in an FTZ need not include the U.S. Customs duty payable on the merchandise.  Cargo insurance rates should be reduced.