Foreign-trade zones, what the heck are they?

You've likely seen the signs around town and wondered what they are. Foreign trade zones peppered across the country near ports to (generally) make it easier for companies that do a large amount of importing and exporting to avoid paying duties until a product is completed. In some cases some duties can be avoided all together.

BMWs at Charleston's port
Read more stories on this subject in our foreign-trade zone topic page.For example, the foreign-trade zones (FTZs) area great for the BMW factory in Greenville. It allows the company to avoid paying a duty when importing a part to use in building a car. Instead the company only pays the duty once the car is completed and shipped to the domestic market. And, sometimes, the part in a completed car no longer qualifies for a duty. The FTZ can streamline business and often save money.

In other cases, it allows companies to import otherwise illegal items, the Charleston Regional Business Journal points out the case of a company called Southern Ammunition:
The status allows the company to import restricted ammunition from countries around the globe. It is torn apart, sorted, cleaned and repackaged as nonrestricted ammunition, and then is exported domestically and internationally.

“It is the only way we could do what we do,” company manager John Herrington said. “When we get done with it, it’s the same stuff you could buy at Wal-Mart for rifle ammunition.”

South Carolina has several FTZs which are big business here, ranking 10th in the nation (but, we covered that earlier).

If you're intrigued keep reading their article.

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