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The City of New Bedford’s Foreign Trade Zone Corporation,
working with the NBEDC, offers a unique “tax abatement”
opportunity that is recommended to any company* that currently
imports or plans to import, directly or indirectly, through
purchases from importers.
New Bedford is a designated Foreign Trade Zone grantee. This
means it can sponsor applicable companies and developers to
realize unique financial benefits specifically offered to
Foreign Trade Zones. These benefits include, but are not limited
to:
Duty Deferral: A firm can move its current inventory of
domestic or duty-paid merchandise into a Zone (or may develop a
Zone around its existing facilities) and duty is paid on
imported material only after it has remained in the Zone during
its normal inventory cycle (versus paying duties once it
arrives in the U.S. before it is delivered to the site.)
Imported items may be held in a foreign trade zone
indefinitely, without paying U.S. Customs duties.
 Duty Elimination: Tariffs are never paid on goods that
are exported from the FTZ. Unlike a drawback program which
refunds previously paid tariffs, Zones allow a company to avoid
payment altogether.
Goods may be destroyed in the FTZ, and all tariffs do not have
to be paid, and waste or scraps are never assessed any duty.
Duty Reduction (a.k.a. Inverted Tariffs): Unique to
manufacturing operations, imported components that undergo a
“substantial transformation” into a final product with a
different Customs classification for duty assessment, may
benefit from inverted tariffs. The inverted tariff occurs on a
final product that would have had a lower duty rate if it had
been imported as a finished product, rather than the duty rate
that is assessed on all its imported components separately. For
example, the final product is manufactured from the imported
components within the FTZ, and then, entry is made on the final
product into the U.S. Duty is assessed at the finished-product
rate, but only applies to the foreign component of that finished
product. Duties are never paid on U.S. value-added. If some
components have duty rates lower than the rate of the final
product, the importer may “fix” those rates at their current
levels.
Activities: In a Foreign Trade Zone, merchandise may be
assembled, relabeled, manipulated, manufactured, mixed, stored,
salvaged, processed, tested, cleaned and/or sampled.
*Company activities must meet qualification standards set by 15
CFR Part 400 and the U.S. Customs regulations. Application for
FTZ status must be made to the federal Foreign Trade Zones Board
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