Foreign-Trade Zone #135
The Port of Palm Beach is a full-service, diversified landlord port that provides economic development within Palm Beach, Martin and St Lucie Counties through its Foreign-Trade Zone (FTZ) #135.
The Port of Palm Beach, as the backbone and Grantee to FTZ #135, has offered companies millions of dollars in savings through duty relief or duty deferment since 1987.
Contact us to find out how the Port of Palm Beach’s Foreign-Trade Zone can seamlessly accommodate your company’s needs, either inside the Port, or throughout Palm Beach, Martin and St. Lucie Counties.
WHAT IS AN FTZ?
- A secure area located in or near a Customs Port of Entry.
- Legally outside the US Customs territory. (Upon activation)
HOW CAN YOU BENEFIT FROM THE ZONE?
- Duty Exemption. No duties on or quota charges on re-exports.
- Duty Deferral. Customs duties and federal excise tax deferred on imports.
- Inverted Tariff. In situations where zone production results in a finished product that has a lower duty rate than the rates on foreign inputs (inverted tariff), the finished products may be entered at the duty rate that applies to its condition as it leaves the zone (requires prior authorization).
- Logistical Benefits. Companies using FTZ procedures may have access to streamlined customs procedures (e.g. "weekly entry" or "direct delivery").
- Other Benefits. Foreign goods and domestic goods held for export are exempt from state/local inventory taxes. FTZ status may also make a site eligible for state/local benefits which are unrelated to the FTZ Act.
WHAT ARE THE TYPES OF FOREIGN-TRADE ZONES?
Foreign-trade zones must be organized under one of two separate frameworks, known as;
- Traditional Site Framework (TSF)
- Alternative Site Framework (ASF).
Both frameworks provide flexibility for companies of all sizes to access the benefits of operating in an FTZ.
FTZ No.135 at the Port of Palm Beach is organized under Alternative Site Framework (ASF), which allows zones to use quicker and less complex procedures to obtain FTZ designation for eligible facilities within the zone's service area.
ASF and the new regulations together have dramatically reduced the timing and cost constraints that conspired in the past to make it unwieldy for small and medium sized companies to enter the program. The new regulations have opened up the application process significantly by offering companies a more streamlined site designation process under the ASF structure.
WHAT ACTIVITY IS PERMITTED IN A FTZ ZONE?
- Merchandise in a zone may be assembled, exhibited, cleaned, manipulated, manufactured, mixed, processed, relabeled, repackaged, repaired, salvaged, sampled, stored, tested, displayed and destroyed.
- Production activity must be specifically authorized by the FTZ Board. (Production activity is defined as activity involved in the manufacturing or processing of a foreign article or activity involving a change in the condition of the article which results in a change in the customs classification of the article or in its eligibility for entry for consumption.).
- Retail trade is prohibited in zones.
ARE YOU IN THE ZONE?
- Zone sites must be within or adjacent to a U.S. Customs and Border Protection (CBP) port of entry.
- The adjacency requirement can be satisfied if one of the following factors is met:
- The zone or subzone site is within the limits of a CBP port of entry.
- The zone or subzone site is within 60 statute miles of the outer limits of a CBP port of entry.
- The zone or subzone site is within 90 minutes’ driving time from the outer limits of a CBP port of entry as verified by the CBP Service Port Director.
- For subzones only: subzone sites that are outside the 60 miles/90 minutes driving time from the outer limits of the CBP port of entry may alternatively qualify to be considered adjacent if they work with the CBP Port Director to ensure that proper oversight measures are in place.
WHAT ARE THE TYPES OF FTZ APPLICATIONS?
There are several types of U.S. Foreign Trade Zones Board (FTZB) applications:
- Minor Boundary Modification – ASF Usage Driven Site or Subzone Designation
- Expansion (New Magnet Site or Expanded Magnet Site)
- Subzone – Traditional Site Framework (TSF)/Outside ASF Service Area
- Production Authority (Notification or Application)
HOW LONG DOES THE APPROVAL PROCESS TAKE?
A company seeking to establish and activate a site under an existing FTZ can submit a request and receive approval in as little as 30 days. If the company then requires approval of its operation under a Production Authority request, they will complete the streamlined application and can receive approval within 120 Days.
HOW DO I APPLY?
Current application formats and specific information on each application type can be found on the U.S. Foreign Trade Zones Board website
WHAT INFORMATION DO I NEED TO APPLY?
- Site address/acreage
- Company/brief summary of activity
- Right to use site
- Concurrence from CBP
- Letters regarding local tax impact (if applicable)
Additional information on the requirements for each type of application may be found on the U.S. Foreign Trade Zones website.
HOW MUCH IS THE APPLICATION FEE?
Port of Palm Beach charges an application fee to cover the costs of reviewing and processing the necessary grantee documentation or FTZ applications. Fees are as noted below:
- Minor Boundary Modification Fee $2,500
Fee for a new ASF Usage-Driven Site or ASF Subzone
2. Subzone Application Fee $10,000
Fee for a TSF Subzone outside the ASF Service area
3. Expansion Application Fee $10,000
Fee for a new Magnet Site or expansion of an existing Magnet Site
4. Production Authority Application $5,000
Fee is applicable for full production authority applications only
All fees are payable in advance of application requests, with the exception of TSF Subzone Applications, which require $5,000 payable in advance and the remaining $5,000 payable upon U.S. Foreign Trade Zones Board (FTZB) approval.
WHAT HAPPENS AFTER YOU ARE APPROVED?
The zone must undergo a second process called activation. Activation takes place locally under the supervision of the Customs Port Director, U.S. Customs and Border Protection, and involves a review of zone procedures, inventory control and recordkeeping systems, and site security. Once the FTZ is activated, users may begin admitting merchandise under zone status.
HOW MUCH IS THE ACTIVIATION FEE?
Each operator shall pay to Port of Palm Beach an activation fee for the activation of its FTZ #135 site to cover Port of Palm Beach expenses for preparation and processing of the operator agreement, providing grantee concurrence letter to CBP and reviewing the activation application. The fee does not include preparation of the activation request, procedures manual or any other documents required for activation under the Customs Regulations.
- Manufacturing Site – Subzone/Usage-Driven/Magnet $5,000
- Distribution Site – Subzone/Usage-Driven/Magnet $3,000
Upon receipt of the activation fee, the grantee will issue the grantee concurrence letter required for activation.
ARE THERE ANNUAL FEES ASSOCIATED WITH THE OPERATION OF A SITE?
Annual fees shall be applied to all property with FTZ designation within FTZ #135. Annual fees cover the administration of FTZ #135 by Port of Palm Beach, preparation of the annual report to the FTZB, marketing and promotion of FTZ #135 and other services provided by Port of Palm Beach.
The property owner shall be responsible for payment of the annual fee for magnet sites that are not activated. For non-activated usage-driven sites or subzone sites, the company that received the grant of authority shall be responsible for the fee. The annual fee will be payable on the anniversary date of either the operator or property owner agreement, whichever is applicable.
- Magnet Site* $1,000
- Usage-Driven Site or Subzone Site $2,500
*Property owners with no activated users that were included in the original grant of authority for FTZ #135 or FTZ #209 are exempt from this fee.
- Manufacturing Site – Subzone/Usage-Driven/Magnet $6,000
- Distribution Site – Subzone/Usage-Driven/Magnet $4,000