Foreign-Trade Zone (FTZ) No. 2 is administered by the Board of Commissioners of the Port of New Orleans pursuant to a grant of authority issued by the Foreign-Trade Zones Board, Washington, DC, on July 16, 1946. There are over 50 designated usage-driven sites throughout Greater New Orleans.
The Foreign-Trade Zone program was created by Congress in 1934 to stimulate growth for U.S. companies competing on the international stage by allowing delayed or reduced duty payments. A Foreign-Trade Zone is a secure area located at or near an international port of entry that is legally outside of U.S. Customs Territory. Without incurring duties, merchandise located in the zone may be stored, sampled, tested, assembled, manufactured, manipulated, mixed, processed, tested, repackaged, relabeled, repaired, cleaned, salvaged, exhibited, displayed and destroyed. Retail trade is prohibited in a Foreign-Trade Zone.
Duties are eliminated when you assemble or manufacture a product in a zone and then export it. Duties are eliminated on waste, scrap and rejected or defective parts.
Duties can be lowered when you assemble or manufacture a finished product for consumption in the United States that has a lower duty rate than the individual imported components.
Until merchandise moves out of a Foreign-Trade Zone and into U.S. commerce, duties are deferred, resulting in a cash flow advantage for the owner of the merchandise.
Reduced Merchandise Processing Fees
Instead of making customs entries and paying merchandise processing fees on each shipment, zone users may be able to consolidate those shipments into a weekly entry and pay a single merchandise processing fee. Brokerage costs may also be reduced with fewer entries.
Merchandise that is subject to quotas can be held in a Foreign-Trade Zone in anticipation of a change of the quota that would allow the product to enter U.S. commerce.
Flexibility: Shippers can increase flexibility with just-in-time delivery and reduced customs delays.
- Louisiana ranks second in merchandise received in production activity for a U.S. Foreign-Trade Zone.
- Louisiana ranks second among the states for the value of me
- Louisiana ranks fourth among the states for the value of merchandise exported from a U.S. Foreign-Trade Zone.
- About $2.4 billion worth of merchandise was received in the New Orleans Foreign-Trade Zone in 2016.
- Some $500 million in merchandise was exported from New Orleans Foreign-Trade Zone sites.
- 21,000 people were employed in Louisiana’s six Foreign-Trade Zones in 2016.
SOURCE: NAFTZ 2016 STATE BY STATE STUDY
If you are wondering whether your company can benefit from being in FTZ 2, please click here to use the Department of Commerce’s Duty Savings Estimator.
Useful Federal Links
National Association of Foreign-Trade Zones The National Association of Foreign-Trade Zones, an association of public and private members, is the collective voice of the Foreign-Trade Zones program. The NAFTZ is the principal educator and the leader in demonstrating the FTZ program’s value and role in the changing environment of international trade.
Foreign-Trade Zone Resource Center The Foreign-Trade Zone Resource Center is a site that was designed to provide information to virtually anyone involved in the Foreign-Trade Zone (FTZ) program.
Greater New Orleans, Inc. Greater New Orleans, Inc. is a regional economic development alliance whose mission is to serve as the catalyst for wealth creation in the 10-parish region of Southeastern Louisiana. GNO, Inc. will accomplish this by pursuing an aggressive agenda of business development — marketing the region and product development — improving regional business conditions through policy, workforce and research initiatives.
New Orleans Business Alliance The New Orleans Business Alliance (NOLA BA) is the official nonprofit organization tasked with leading economic development initiatives for the City of New Orleans. NOLA BA is a public-private partnership between the City of New Orleans and private investors from the local community.
World Trade Center New Orleans The World Trade Center’s mission is to facilitate the addition of wealth and jobs in Louisiana through international trade, economic development and allied activities by supporting a prosperous international business climate in Louisiana with advocacy, information, education, and stakeholder programs and services.
Louisiana Economic Development Louisiana Economic Development is responsible for strengthening the State’s business environment and creating a more vibrant Louisiana economy.
Small Business Administration The SBA’s Office of International Trade’s mission is to enhance the ability of small businesses to compete in the global marketplace.