A firm wanting to import items duty free and then use the component for local production of a product that is then exported would most likely utilize a Foreign trade zone
What do you mean by foreign trade zone?
- When activated, Foreign-Trade Zones (FTZs), which are controlled by U.S. Customs and Border Protection (CBP), are typically seen as being beyond CBP territory.
- They are the American equivalent of what are referred to as free-trade zones overseas, and are situated in or close to CBP ports of entry.
- In general, any item that is not restricted from entering the United States may be permitted into a Zone. The FTZ Board must expressly approve any manufacturing, processing, or other activity that changes the tariff classification before it can take place in a zone.
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