FTZ vs Bonded Warehouse

Formal Customs Entry

Bonded Warehouse

A bonded warehouse is within U.S. Customs territory. Thus, Customs entry must be filed before goods enter a warehouse.

Foreign Trade Zone

A foreign Trade Zone is not considered within U.S. Customs territory. Thus, Customs entry is filed just prior to removal of goods from the Zone and only for amount of goods to be removed.

Customs Bond

Bonded Warehouse

Required for all warehouse entries.

Foreign Trade Zone

No bond required! All admissions to a Zone are covered under FTZ operators Customs Bond. No additional bond is required.

Payment of Duty

Bonded Warehouse

Merchandise is dutiable at the rate in effect at time of withdraw.

Foreign Trade Zone

Duties are due only upon entry for U.S. consumption. The rate can be that which is in effect at time of admission or withdraw.

State & Local Inventory Tax

Bonded Warehouse

Tax is levied on January 1st of each year on all merchandise.

Foreign Trade Zone

Foreign merchandise is not taxed. Domestic merchandise to be exported is not taxed.

Permitted Activity

Bonded Warehouse

Merchandise may only be cleaned, repackaged & sorted under Customs supervision.

Foreign Trade Zone

Merchandise may be stored, inspected, repackaged, repaired, tested, cleaned, sampled, displayed, manipulated, mixed, processed, assembled, salvaged, destroyed or re-exported.

Waste & Damaged Goods

Bonded Warehouse

Duty owed on entire shipment entering a bonded warehouse.

Foreign Trade Zone

No duty paid on waste, damaged or otherwise non-usable merchandise that is destroyed in the Zone.

Goods with Documentation Labeling Defects

Bonded Warehouse

May not be admitted.

Foreign Trade Zone

May be admitted and problems corrected.

Domestic Merchandise

Bonded Warehouse

May not be admitted.

Foreign Trade Zone

May be admitted without Customs Permit and comingled with foreign merchandise.

Drawback of Customs Duties or Federal Excise Tax

Bonded Warehouse

Does not apply.

Foreign Trade Zone

May apply to goods admitted to the Zone if approved by Customs.

Storage Period

Bonded Warehouse

Not to exceed five years.

Foreign Trade Zone

Unlimited.