The U.S. Commerce Department has approved the Port of San Francisco’s request to reorganize its Foreign Trade Zone (FTZ) #3 under the Alternative Site Framework (ASF) program, a process that requires less paperwork and modernizes the process for businesses to apply for the zone.
The ASF is part of a new rule that allows companies to secure FTZ status in about 30 days after the acceptance of their application. The rule applies to new and existing companies operating in ASF zones, such as those in San Francisco and San Mateo counties.
For companies not operating in an FTZ that uses the alternate site framework, the process takes three to five months – this is down from a previous timeframe of 10 to 12 months.
A foreign trade zone is a specified location in a customs port of entry. Goods brought into FTZs don’t require a formal customs entry at arrival and companies can use these goods for manufacturing, testing, assembly, processing, storage, and distribution. Reduced duties are paid on goods imported into the United States from these zones while re-exported goods pay no duty.
One of the main goals of FTZs, according to Andrew McGilvray, the executive secretary and staff director of the Foreign Trade Zones Board, is to bring manufacturing and higher paying jobs to the United States by providing an economic incentive for the final production and packaging of goods to happen domestically.
“The new expedient (ASF) process gives San Francisco and San Mateo companies a competitive advantage, especially when competing on a global scale,” said Peter Dailey, maritime director for the Port of San Francisco. “Foreign trade zones are one tool to reduce logistics costs, which translates into savings to a company’s bottom line.”
The port’s FTZ #3 was established in 1948. — Geoff Whiting
SF reorganizes FTZ under new rule
