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Question 112 - CSCP discussion

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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
Answers
A.
Public warehouse
B.
Value-added territory
Answers
B.
Value-added territory
C.
Free trade zone
Answers
C.
Free trade zone
D.
Customs clearing houseU S. Customs and Border Protection. (2020). 'What are the Benefits of a Foreign-Trade Zone?' World Bank. (2011). 'Customs Modernization Handbook.'
Answers
D.
Customs clearing houseU S. Customs and Border Protection. (2020). 'What are the Benefits of a Foreign-Trade Zone?' World Bank. (2011). 'Customs Modernization Handbook.'
Suggested 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.

asked 16/09/2024
Michael Geary
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