Lauderdale Marine Center (LMC) has announced that it has received ‘production authority’ to supplement its existing Foreign Trade Zone (FTZ), which allows work to be performed on vessels while they are within the FTZ.
LMC became the first marine FTZ in the US when it received confirmation of its status on 7 June 2017, allowing foreign-flagged yachts to be made available for sale to US citizens while in US waters. The ‘production authority’, according to LMC president, Doug West, is the “second component” of the FTZ.
It allows owners and contractors of foreign-flagged yachts entered into the FTZ to import parts into the zone without paying duty. Furthermore, as these parts are entering into a territory that is not considered as being within the US jurisdiction, they do not have to clear US Customs procedures before arriving in the FTZ.
“A foreign-flagged vessel being refitted in the FTZ can make savings of up to 12 per cent duty on parts,” explains West. “Large refits will certainly see immense savings, and smaller projects will see cost savings as well when conducting work within the FTZ.”
West offers an example to illustrate the benefits: “We had a boat that came to LMC about a year-and-a-half ago and replaced all the engines, generators and electronics, and all those goods were foreign. If we’d had the 'production authority' back then, they wouldn’t have had to pay duty on the new parts.”
The vessels utilising the 'production authority' will still retain the benefits of the standard FTZ entry, so they can be showcased for sale to US citizens, and travel for exhibitions or sea trials within US waters, for up to 120 days. Therefore, vessels that complete repairs can remain in the FTZ for sale, eliminating the need for boat show bonds.
Since the FTZ was introduced, the motoryachts, Cheers 46, Ninkasi and Clorinda, among others, have been exhibited to US citizens both in and out of shows. West says that the yard is already in discussion with one yacht about a refit in the FTZ, which will more than likely go into the 'production authority' in the next 30 days, and he expects the yard to see an increase in the number of refits, as a result of this development, long-term.
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