SCM 413 Final - FTZs, Incoterms,
Compliance Questions and Answers Graded
A+
how do FTZ's lower duty rates? need to make substantial change of HTS to receive lower
duty rates
attractive if host country has an inverted tariff structure
i.e. tariff on parts > tariff on foreign goods
FTZ cost reduction non-FTZ: $200 per shipment
FTZ: max of $485 per week
1800 entries / year:
non-FTZ: $360,000 + duties
FTZ: $25,220
annual savings: $334,780
, HTS digit meanings first 2 digits - chapter
first 4 digits - heading
first 6 digits - harmonized international subheading
first 8 digits - US subheading
last 2 digits - statistical suffix
what is the harmonized tariff system (HTS)? divided into 21 sections by type of product
and material
sections divided into 97 chapters
what is a duty? a tax paid, based on the tariff schedule, by the importer that allows goods
into a country
what are the 3 criteria to determine duty? classification: what it is
valuation: how much is it worth
country of origin: where it came from
Compliance Questions and Answers Graded
A+
how do FTZ's lower duty rates? need to make substantial change of HTS to receive lower
duty rates
attractive if host country has an inverted tariff structure
i.e. tariff on parts > tariff on foreign goods
FTZ cost reduction non-FTZ: $200 per shipment
FTZ: max of $485 per week
1800 entries / year:
non-FTZ: $360,000 + duties
FTZ: $25,220
annual savings: $334,780
, HTS digit meanings first 2 digits - chapter
first 4 digits - heading
first 6 digits - harmonized international subheading
first 8 digits - US subheading
last 2 digits - statistical suffix
what is the harmonized tariff system (HTS)? divided into 21 sections by type of product
and material
sections divided into 97 chapters
what is a duty? a tax paid, based on the tariff schedule, by the importer that allows goods
into a country
what are the 3 criteria to determine duty? classification: what it is
valuation: how much is it worth
country of origin: where it came from
