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Georgia Foreign-Trade Zone, Inc.
Media Kit
Georgia Foreign-Trade Zone, Inc.
2014 Media Kit
Georgia Foreign-Trade Zone, Inc.
Media Kit
About Us
WHAT
The Georgia Foreign-Trade Zone (GFTZ) establishes and maintains
federally approved Foreign-Trade Zones (FTZs) in Georgia; enabling
companies to save money on imported merchandise by diminishing
import duties, as well as streamline formal customs entry procedures.
WHY
FTZs facilitate trade and increase the global competitiveness of
companies doing business in Georgia by reducing operating costs
associated with international trade.
HOW GFTZ
WORKS
GFTZ provides foreign-trade zone incentives to companies and facilitates
the application process and program involvement. This non-profit
organization offers technical assistance and support with federal
authorities.
APPROVED
ACTIVITIES
Foreign and domestic merchandise can include raw materials,
components and finished goods. Merchandise admitted into an FTZ may
be:
Stored indefinitely
Assembled
Manufactured*
Repackaged
Sampled
Relabeled
Salvaged
Destroyed
Tested
Manipulated
Processed
Repaired
Displayed
Distributed
*Approval Required
BENEFITS TO
USERS
Businesses lower costs by deferring or reducing customs duties on
imported goods. Other advantages may include distribution savings,
streamlined processing of goods and elimination of quota restrictions. As
a result, Georgia companies are better able to compete with foreign
manufacturers.
BENEFITS TO
COMMUNITY
GFTZ stimulates economic growth and development through retention
and creation of jobs, as well as an expanded tax base. The program
nurtures a positive business environment by removing trade barriers and
providing incentives for existing and prospective companies to establish
or expand operations in Georgia.
Georgia Foreign-Trade Zone, Inc.
GFTZ
ADVANTAGES
Media Kit
GFTZ participants enjoy advantages inherent to the metro Atlanta market,
including:
• 80% of the U.S. population is within a 2-hour flight of HartsfieldJackson Atlanta International Airport
• Excellent interstate access
• Lower labor costs
• The significant size of the U.S. Customs Service in Atlanta
streamlines activities once a company establishes FTZ operations.
ESTABLISHED
GFTZ received its grant of authority from the U.S. Foreign-Trade Zones
Board, Department of Commerce, in 1977.
CONTACT
Georgia Foreign-Trade Zone, Inc.
270 Peachtree Street, NW, Suite 2200
Atlanta, Georgia 30303
404-223-2297
www.georgiaftz.com
Georgia Foreign-Trade Zone, Inc.
Media Kit
FTZ Program Frequently Asked Questions
1. What is a foreign-trade zone?
A federally approved site treated as being outside the territory of U.S. Customs and
Border Protection (CBP) for the purposes of the tariff laws and CBP entry procedures.
Therefore, foreign and domestic merchandise may be admitted to a FTZ for operations
such as storage, exhibition, assembly, manufacture and processing, without being
subject to formal U.S. CBP entry procedures, the payment of duties or the payment of
federal excise taxes. When merchandise is removed from a FTZ, duties may be
eliminated if the goods are then exported from the United States. If the merchandise is
formally entered into U.S. commerce, duties and excise taxes are due at the time of
removal from the FTZ, often at a lower rate.
2. What are free zones, export processing zones & enterprise zones?
Free zones allow merchandise to enter an area for storage and be exported or entered
into the host country. Export processing zones (EPZs) are duty-free zones dedicated
to manufacturing for export. No duties are charged for entry of raw materials,
components, machinery, equipment, and supplies used to produce manufactured goods
provided these are then exported. Enterprise zones encourage new industrial and
commercial activity in economically depressed areas by removing most zoning,
taxation, and federal and local business regulations from carefully defined districts.
3. What savings/benefits does a foreign-trade zone offer?
Improved Cash Flow: Payment of U.S. Customs duties is deferred until the goods are
removed from the zone for entry into the commerce of the U.S.
Reduction in Duties: If the duty rate on imported goods used in the production of a
finished product is higher than the duty rate of the finished product, then the lower rate
is applied to the imported merchandise. The “inverted tariff” benefit results in lower duty
payments to U.S. Customs. For example, if an imported part used in the production of a
finished product has a duty rate of 6%, but the duty rate on the same finished product is
only 3%, then FTZ procedures allow the imported part to be classified at 3%. The U.S.
government allows the reduction in duty because it levels the playing field for U.S.
manufacturers competing internationally.
Georgia Foreign-Trade Zone, Inc.
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Elimination of Duties: No duties are paid on merchandise exported from a FTZ. This
includes the elimination of duty on imported finished products or imported materials
used in the production of a finished product that is exported from the FTZ.
Faster, Streamlined Movement of Goods & Lower Processing Fess: Many FTZ
users are eligible to take advantage of special Customs procedures such as direct
delivery and weekly entry. These procedures expedite the movement of cargo, thereby
supporting just-in-time inventory methodologies. The weekly entry benefit might also
result in reduced Merchandise Processing Fees (MPF) and brokerage fees.
3. How many foreign-trade zones are in Georgia?
The 3 international ports of entry in Georgia each have FTZ projects associated with
them: (Atlanta, Savannah, Brunswick) Within these zone projects, there are multiple
zone sites including industrial parks and individual companies with FTZ status.
4. How does a company obtain foreign-trade zone status?
Applications for FTZ designation are submitted to the Foreign-Trade Zones Board, U.S.
Department of Commerce. Depending on the type of application, processing and
approval time is from 1 to 6 months on average.
5. Are any items restricted from entering an FTZ?
Any item that can be legally imported into the United States is eligible for FTZ status.
Goods cannot be admitted into an FTZ as a way to circumvent trade laws. Products
related to sensitive US industries such as textiles and agriculture have some
restrictions.
6. Where can I find duty rates for specific products?
Duty rates are listed by product and country of origin in the U.S. Customs Tariff
Schedule available online at www.customs.ustreas.gov. Because product categories
are very specific, a licensed customs broker should be contacted for assistance.
Georgia Foreign-Trade Zone, Inc.
Media Kit
20 Ways the FTZ Program Can Save Your Company Time and Money
1. Duty Deferral: Imports may enter the FTZ and be held in inventory indefinitely
without payment of Customs duty.
2. Re-exports: Customs duties are not paid on merchandise exported from the FTZ
3. Defects, Damage, Waste, Scrap: Customs duties are reduced or eliminated on
merchandise subject to defect, damage, obsolescence, waste and scrap in the
FTZ.
4. Inverted Customs Duty Savings: FTZ occupants may elect to pay the duty rate
on component material or merchandise produced from the component materialwhichever is lower.
5. Labor, Overhead and Profit Not Dutiable: Customs duties are not owed on labor,
overhead and profit attributed to FTZ production operations.
6. U.S. Quotas: Most merchandise may be held in a FTZ until quotas open.
7. International Returns: Duties are not paid on merchandise that is repaired in a
zone and re-exported.
8. Quicker Delivery: Delays in Customs clearances and duty drawback procedures
are eliminated. Delivery times are reduced by direct shipments to the FTZ.
9. Quality Control: The FTZ may be used for quality control inspections to ensure
that only products that meet specifications are imported. Sub-standard goods can
be destroyed or returned before duty is paid.
10. Country of Origin Marking and Labeling: No country-of-origin labels are required
on merchandise admitted to the FTZ. If needed, the labels can be applied in the
FTZ.
11. Cargo Insurance: Reduction in cargo insurance is possible because imported
merchandise is shipped directly to the FTZ, avoiding potential pilferage at ports.
12. Reduction of Merchandise Processing Fee (MPF): The importer may file one
estimated entry per week reducing the MPF.
13. Inventory Control: FTZ operations require careful accounting on receipt,
processing and shipment of merchandise, improving overall systems.
Georgia Foreign-Trade Zone, Inc.
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14. Consumed Merchandise: Merchandise consumed in processing in the FTZ is
generally not subject to duties.
15. Inventory Taxes: Tangible personal property imported from outside the U.S. and
held in a zone, as well as that produced in the U.S. and held in a zone for
exportation, are not subject to State and local ad valorem taxes.
16. Exhibition: Merchandise and machinery may be held for exhibition or displayed in
a FTZ without duty payments.
17. Reduced Insurance Costs: Insurance costs may be reduced due to increased
security and a lower insurable value (duty does not need to be included in figuring
rate.)
18. Zone-to-Zone Transfer: Merchandise may be transferred in-bond from one zone
to another.
19. Transfer of Title: Title to merchandise may be transferred in the FTZ, as long as
there is not “retail” sale. The global supplier can own it until it is shipped just-intime to local manufacturers.
20. Foreign Production Machinery: Duty may be deferred on foreign production
equipment imported into a designated zone area for plant construction until
equipment is assembled, installed, tested, and used in production for which it was
admitted to zone.
Georgia Foreign-Trade Zone, Inc.
Media Kit
Industry Case Studies
Case studies reprinted with the permission of the National Association of Foreign Trade Zones.
Manufacturing Vehicles in an FTZ
By Donnie Barnes
BMW Manufacturing Co., LLC
Manufacturing vehicles in a foreign-trade zone is the same as manufacturing vehicles
anywhere– but with some very distinct advantages. I state this to emphasize that a company
does not have to radically change the way it does business in order to use an FTZ.
Direct delivery is reason enough for a company operating under a just-in-time inventory basis to
be in an FTZ. If a shipment arrives at midnight and is needed on the assembly line, that
shipment can be received into the inventory control system, taken straight to the line for use,
and then be reported to Customs and Border Protection the next day. The cost of a line-down
situation far exceeds any duty savings to be realized.
If the company exports, manufacturing in an FTZ can put the company in a much better cash
flow situation. Instead of paying duty on imported parts, going through the manufacturing
process, exporting the vehicles, gathering documentation, and waiting for CBP to refund the
duties paid under its drawback program, the vehicle manufacturer simply never pays the duty on
the parts that are used in the exported vehicles. Remember that only 99 percent of the duty paid
is eligible for drawback. The merchandise processing fee is not eligible for drawback. And, if the
manufacturer has not yet localized the purchase of parts subject to anti-dumping duties, it
should remember that those “penalty” duties are also not eligible for drawback. Additionally,
most drawback recipients use a specialized drawback broker to file the claims – which can cost
10 to 25 percent of the refund.
As much as a vehicle manufacturer hates to admit it, scrap is one of the products of the
manufacturing process. Duty is never paid on the scrapped material.
The ability to file a weekly entry allows the vehicle manufacturer to reduce brokerage fees and
merchandise processing fees. This is in addition to the administrative efficiencies that allow
shipping to occur 24 hours per day – even when Customs is not available.
The security requirements for an FTZ closely mirror the C-TPAT security requirements. This
should facilitate the vehicle manufacturer’s C-TPAT validation so that it can enjoy additional
benefits – such as qualification to participate in the Importer Self-Assessment program.
The reasons go on and on . . . but the information contained in this short article should
encourage non-zone companies to investigate the use of an FTZ!
Ms. Barnes is the Customs Manager for BMW Manufacturing Co. and Rolls-Royce Motor Cars
NA. She is also a past president of the National Association of Foreign-Trade Zones.
Georgia Foreign-Trade Zone, Inc.
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Industry Case Study
FTZs are Valued as Vehicle Processing Centers
By David Ostheimer,
Lamb & Lerch
A number of motor vehicle importers have their Vehicle Processing Centers (VPC) located
within General Purpose FTZ sites. The FTZ designation for the VPC provides the motor vehicle
importer with two major benefits. The primary benefit is duty deferral -- the postponement of the
payment of customs duties until the motor vehicle has been processed and been shipped from
the VPC to the dealer. This can generate substantial savings particularly when inventory levels
rise. For example, an imported motor vehicle with a dutiable value of $20,000 is subject to a
payment of $500 in customs duties (2.5% X $20,000). Utilizing a 7.5% rate of return on the
company’s money, each day the motor vehicle remains within the FTZ results in a savings $.10
per vehicle ($500 X 7.5% ÷ 365). The greater the number of vehicles that are processed
through the VPC and the longer the vehicles remain in inventory, the greater the FTZ savings.
A second major benefit is the potential reduction in the dutiable value of the imported vehicle. At
the VPC the imported motor vehicle is oft times accessorized with either domestic status or
foreign status components. For example, an AM/FM radio may be installed at the VPC located
within a FTZ. If the AM/FM radio is a U.S. produced radio, the cost of the radio is not added to
the value of the imported vehicle when entered into the customs territory, thereby resulting in a
lower dutiable value for the motor vehicle.
Parts Distribution Centers
A number of motor vehicle parts importers have been studying and some have estab- lished
their Parts Distribution Centers
(PDC) within General Purpose FTZ sites. Due to extended warranties, motor vehicle companies
must maintain a large inventory of parts within the United States for a lengthy period of time,
which makes the FTZ program extremely attractive from a duty deferral perspective. In addition,
a large number of the imported parts become obsolete and have to be destroyed. By obtaining
FTZ designation on their PDCs, the motor vehicle companies are able to avoid the payment of
customs duties on those parts that become obsolete and are destroyed.
From a logistics perspective, FTZ utilization provides the benefits of direct delivery and the
consolidation of import paperwork. Through direct delivery, the parts are moved directly to the
PDC from the port of unloading with much of the in-bond paperwork now being handled
electronically. This results in an expedited movement of the parts to the PDC. Utilization of a
cumulative C.F. 214 enables a company to file a single admission document for all parts
received on a given day rather than filing multiple customs entries covering each shipment. This
results in substantially less paperwork for both Customs and the company and reduces the
company’s costs with regard to brokerage fees and merchandise processing fee.
There may be additional benefits that a PDC can realize through FTZ designation. If the PDC
serves as a North American distribution center and services Canadian or Mexican dealerships,
no customs duties will ever be paid on those components that are shipped from the PDC to
Mexico or Canada. Furthermore, if the PDC is located in a state in which state or local ad
valorem taxes are imposed on inventory, the FTZ will provide additional tax savings.
Georgia Foreign-Trade Zone, Inc.
Media Kit
How the FTZ Program Can Improve Logistics
By Curtis Spencer
IMS Worldwide, Inc.
Congress
passed
the
Trade
and
Development Act of 2000, which included a
provision authorizing the foreign-trade zone
industry to utilize weekly entry processing
for entries of goods coming out of a foreigntrade zone warehouse or distribution
centers in addition to previously authorized
manufacturing operations. The growth in
General Purpose Foreign-Trade Zones
(those that are not specifically established
for a single company, usually involved in
manufacturing) has risen dramatically since
then, driven in large part by the growth in
trans-Pacific imports from Asia. Dozens of
new, import gateway-driven sites have been
added to the foreign-trade zone program
nationwide, including industrial parks owned
and developed by the nation’s largest real
estate developers.
Developers of big-box industrial parks,
including
ProLogis,
IDI,
Centerpoint
Properties,
AMB
Properties,
Duke,
Keystone, Opus and DP Partners, whose
properties house the nation’s largest import
distribution centers, are establishing FTZ
sites at gateway locations where they can
be fed by the trans-Pacific logistics system.
The demand by retail and consumer goods
importers for FTZ space is at an all-time
high. In the greater Los Angeles area,
where five different General Purpose Zones
have been established, the growth rate in
new general purpose FTZ sites and active
operations has been in double digits. Other
areas that are seeing significant growth in
GPFTZ operations include Houston,
Atlanta, central Pennsylvania, Chicago
(near the major intermodal ramps), Dallas
and New York-New Jersey. The growth is
not just in niche-specific FTZ subzones as
was the case in the 1980s and 1990s.
Instead, it’s in new, large-sized distribution
centers for the import distribution of finished
goods.
Leading retail and consumer goods
importers are realizing that use of an FTZ
for trans-Pacific and other imports is a
functional and viable strategy to cut logistics
and import-processing costs from the supply
chain. The addition of the weekly entry
process means that the importers are
allowed to consolidate entries into a single
Customs entry filing of one per week, 52 per
year. For a large importer that has multiple
entries per day, going to a one-a-week
process provides a direct financial benefit. A
recent Journal of Commerce Trans-Pacific
Maritime Conference illustrated the case of
Huffy Bicycles. The firm’s import manager,
Pat Volkman, said recently, “We have
continued to see a marked improvement in
our supply chain velocity while saving
substantially with the weekly entry program.
Make no mistake, it does require constant
vigilance, but what is there about the
program after 9-11 that doesn’t anymore?”
Importers of electronics, footwear, high-end
consumer goods and apparel, are becoming
increasingly interested in the opportunities
afforded by FTZs.
“If we can keep earning our clients the
additional profits that this cost-cutting
allows, our customers are going to be
thrilled with the development of our
revitalized FTZ program,” said Ted
Henderson, vice president of customs
compliance for EGL Global Logistics. “We
have found quite an audience willing to
listen as we have begun to roll out our ‘newgeneration’ FTZ program. Once they
Georgia Foreign-Trade Zone, Inc.
understand that their cost-cutting affects
their brokerage and supply chain logistics
expenses and does not delay the process,
they are eager to become involved.” EGL,
Exel, NYK Line, Nippon Express and other
international 3PLs have added the FTZ
program to their menu of services.
How does the FTZ program fit into the new
24-Hour Rule and the Customs-Trade
Partnership Against Terrorism? Ever since
the 1930s, when the foreign-trade zone
program was first created in the U.S.,
operators of FTZs have been required to
provide more security than other importers.
Since an FTZ is a “secure Custom’s
controlled facility” by definition, enhanced
physical, procedural and personnel security
has been the norm, indeed a requirement to
become activated. U.S. Customs and
Border
Protection has made it clear to the FTZ
industry that security is imperative. In fact
CBP C-TPAT Program executives note that
receiving
and
admitting
imported
merchandise into a FTZ is considered a CTPAT “Best Practice”.
In addition, the recent automation of the
FTZ admission process brings FTZ’s into a
fully automated import supply chain
environment.
Because an FTZ operates “in-between” the
normal flow of importing, from the first point
of contact with the U.S. to distribution points
in between, FTZ operations have historically
been advised in advance of incoming
shipments so that paperwork (now almost
fully electronic) could be managed properly.
The extension of advanced manifest rules
modeled on the original 24-hour rule for
ocean imports to all modes have dovetailed
with FTZ operations. Most FTZ inventory
management systems are geared to accept
web-based and EDI information in advance
of shipments so that proper notifications can
be made to bring the freight into the zones.
Media Kit
The 24-hour rule, for the most part, will not
impact a FTZ distribution center any more
than it does a sophisticated and fully
integrated supply-chain importer today.
When it comes to exporting from an FTZ
(which will be impacted by the 24-hour rule
for exporting, coming into play sometime in
the near future), advanced notification is
required anyway, as the zone operator must
prepare all export documents in advance.
No delay should occur to a zone operator in
implementing the export 24-hour rule at all.
The opportunity for lowering costs of
importer processing through utilization of
the automated admission process and
weekly entry, is only available within a FTZ
environment. Third-party logistics providers
are adding it to their service mix because it
is being demanded by more importers. Real
estate developers are making sure their
industrial parks at import gateway locations
are included into foreign-trade zone
programs. As the use of FTZs for import
distribution becomes more common,
Customs should start to reap some of the
processing
benefits
associated
with
automated admission and weekly entries
while experiencing a sense of confidence
that such supply chains have the layered
security of both C-TPAT and FTZ fully
employed. Lastly, by bringing additional
value to the international supply chain here
in the U.S., we all benefit by keeping logistic
jobs in our own country rather than having
them migrate to our neighbors.
Curtis Spencer is president of IMS
Worldwide, Inc., an international trade
advisory firm. He is a member of the best
practices committee of the Container
Working Group, and is subcomittee chair of
the COAC Technology Task Force.
Georgia Foreign-Trade Zone, Inc.
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GFTZ Leadership
BETTY McINTOSH, CHAIR
Betty McIntosh serves as the Chairman of the Board of the Georgia Foreign-Trade Zones and
as Managing Director of Business Incentive Practice, Global Business Consulting at Cushman &
Wakefield.
Betty has represented clients in telecom, consumer markets, industrial products, soft-ware
related businesses, and financial services on incentive matters. She has conducted site location
analyses for numerous industries and has also been involved with projects for various economic
development organizations related to investment attraction.
Betty obtained her BBA in Accounting from the University of Mississippi (cum laude) and her
Masters in Taxation from the University of Memphis. She is a CPA. Betty is nationally
recognized as an expert on economic development issues and frequently lectures to economic
development organizations across the country.
JULIE BROWN, PRESIDENT and CEO
Julie Brown is President & CEO of Georgia Foreign-Trade Zone, Inc., a private, non-profit
organization formed by business and government leaders in 1976 to promote, support and
stimulate economic growth for the State of Georgia.
Georgia Foreign-Trade Zone is the Grantee of Foreign-Trade Zone (FTZ) #26 and is based in
Atlanta, GA, home of the world’s most-traveled airport, and ranked 3rd in the nation for
FORTUNE 500 companies and Global 500 headquarters. In 2013, companies within FTZ #26
received nearly $4.5 billion worth of merchandise, and exported more than $1 billion.
Employment in FTZ #26 sites topped 5,600 in 2013, representing a 35% increase since 2011.
Ms. Brown serves on the board of directors and as an officer for the National Association of
Foreign-Trade Zones. She also serves as a founding member, and one of only two from the
U.S., on the board of directors for the World Free Zones Organization, formed in 2014 to
promote and improve free zone operations around the world.
Prior to joining Georgia Foreign-Trade Zone, Ms. Brown helped lead marketing and economic
development initiatives in the Atlanta area through positions with the Atlanta Committee for the
Olympic Games, the Atlanta Regional Commission and The Ritz-Carlton Hotel Company.
Ms. Brown is a native of Atlanta and a graduate of the University of Georgia.
Georgia Foreign-Trade Zone, Inc.
2014 Board of Directors
Betty McIntosh, Chair
Managing Director, Business Incentive Practice, Global Business Consulting
Cushman & Wakefield
Jose Ignacio Gonzalez, Immediate Past Chair
President
MAPA Group
Brian McGowan, Vice Chair
Executive Vice President & COO
Metro Atlanta Chamber of Commerce
John “Trip” Martin, Treasurer
Partner
Georgia Link Public Affairs Group
Patrick J. “Pat” Topping, CEcD, Secretary
Senior Vice President
Macon Economic Development Commission
Joseph R. “Joe” Bankoff
Chair, Sam Nunn School of International Affairs
Georgia Institute of Technology
Richard Sargent
President & CEO
Peach State Labs
Charlie Gatlin
Senior Projects Consultant
Georgia Department of Economic Development
David Luckie
Executive Director
Griffin-Spalding Development Authority
Cliff Pyron
Chief Commercial Officer
Georgia Ports Authority
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