Distribution from which of the following types of sites enables goods to enter a country, undergo further modification, and then be exported without paying customs duties?

Distribution from which of the following types of sites enables goods to enter a country, undergo further modification, and then be exported without paying customs duties?
A . Public warehouse
B . Value-added territory
C . Free trade zone
D . Customs clearing house

View Answer

Answer: C

Explanation:

Distribution from a free trade zone (FTZ) enables goods to enter a country, undergo further modification, and then be exported without paying customs duties. FTZs are designated areas where businesses can conduct manufacturing, assembly, and other processes on imported goods without being subject to customs duties until the goods leave the zone for domestic consumption. This allows companies to add value to products and re-export them cost-effectively.

Public warehouse is a facility for storing goods but does not offer customs duty advantages.

Value-added territory is not a standard term in international trade.

Customs clearing house assists with customs paperwork but does not provide duty-free processing.

Reference: U.S. Customs and Border Protection. (2020). "What are the Benefits of a Foreign-Trade Zone?"

World Bank. (2011). "Customs Modernization Handbook."