FTZ Benefits of WRO Storage

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Goods made with forced labor are not entitled to entry or importation into the United States. When information reasonably—but not conclusively—indicates that merchandise involving forced labor is being imported into the United States, Customs and Border Protection (CBP) may issue a Withhold Release Order (WRO), or formal findings, to enforce this prohibition.

The WRO applies to goods entered from a Foreign Trade Zones (FTZ) or warehouse on or after January 13, 2021, the date the WRO was issued. A Foreign Trade Zone is a zone authorized as exempt from many regular US Customs rules and regulations. There are many benefits that importers can take advantage of to improve cash flow, increase global logistics efficiency, reduce redundant or unnecessary logistics costs, and retain flexibility.

What can ITC do to help?

ITC-Diligence Inc. is an international trade and FTZ consultant, national corporate Customs Broker and the largest independent General-Purpose Zone Operator of Foreign Trade Zones in Southern California. ITC-Diligence Inc. provides a unique blend of international trade related services to importers, exporters, manufacturers, distributors, and local government, focusing on Customs & Border Protection issues and a niche Foreign Trade Zone business.

FTZs may now be permitted to admit and store merchandise subject to a WRO pending a CBP finding whether it was produced using forced labor in contravention of U.S. law.

FTZs storing WRO merchandise will be subject to the same rules as bonded warehouses – that the merchandise be physically segregated, physically identifiable, and accounted for in the inventory control and recordkeeping system should an audit be required. A bonded warehouse is a building or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty for up to 5 years from the date of importation.

ITC is here to help navigate your cargo through an FTZ, which is used as a staging location, for goods suspected of forced labor allegations. Once cleared the goods can enter the commerce. Prior to this change goods suspected of forced labor was seized, exported, or destroyed. The FTZ Program becomes a safe haven while the investigation is underway.

FTZ operator/users must determine if CBP has made an affirmative forced labor finding before exporting WRO merchandise. It could take six to nine months to secure written approval on handling WRO merchandise from CBP. The length of time is based on the conclusion of the investigation that I would assume varies based on the circumstances of the shipment.

ITC will provide consulting services and brokerage services to assist the importers involved. This also offers more opportunity to 3PL FTZs.