The Port of Virginia and many of its users stand to benefit from a modification to the regional foreign trade zone that streamlines process for companies applying for FTZ status.
“This is a very real tool that can be used to attract business to The Port of Virginia, Hampton Roads and the Commonwealth,” said John F. Reinhart, CEO and executive director of the Virginia Port Authority. “The benefits of the FTZ are significant and this decision allows those benefits to become available in an expedited process.
“This has the potential to encourage expansion of existing businesses in FTZ 20, many of which are already port users. Further, this will give companies considering coming to Virginia another reason to implement their decision.”
The governor’s office announced the news on Monday, acknowledging the benefits of the ASF designation.
“This new development at The Port of Virginia will encourage companies – current and potential port users – to choose to do business and create jobs within the Foreign Trade Zone that is primarily served by our port,” Gov. Terry McAuliffe said. “The Port of Virginia is one of the Commonwealth’s strongest economic assets, and this new approval to expedite Free Trade Zone designation will greatly improve our ability to bring more business to the port and create more jobs along the way.”
The FTZ 20 service area consists of the Counties of Accomack (partial), Gloucester, Isle of Wight, James City, Mathews, Northampton, Southampton, Sussex, Surry and York, and the Cities of Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach and Williamsburg.
Foreign-Trade Zones are secure areas under US Customs and Border Protection (CBP) supervision that are generally considered outside CBP territory. Companies that operate in foreign-trade zones can defer, reduce, or eliminate Customs duties on imported products.
Once in a zone, imported components can be stored, distributed, assembled, manufactured, repackaged, tested, etc. Customs duties are not paid on products exported outside of the US, rather duty is only paid on products entering US Customs territory.
Manufacturing operations receive the most benefit from the FTZ when the duty rate on the raw materials is higher than the duty rate on the finished product and when the volume of imported shipments is high.
Port of Virginia, March 26, 2014