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Question 264 - CSCP discussion

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Which of the following activities is forbidden in a free trade zone (FTZ)?

A.
Cross-docking goods
Answers
A.
Cross-docking goods
B.
Reconfiguring product
Answers
B.
Reconfiguring product
C.
Re-exporting goods
Answers
C.
Re-exporting goods
D.
Conducting retail trade
Answers
D.
Conducting retail trade
Suggested answer: D

Explanation:

Free trade zones (FTZs) are special economic areas where goods can be imported, stored, and processed with reduced customs regulations and duties. Here's why conducting retail trade is forbidden in FTZs:

Purpose of FTZs: FTZs are designed to facilitate international trade and improve logistics efficiency by allowing goods to be stored, processed, and re-exported with minimal customs intervention.

Regulatory Restrictions: Retail trade within FTZs is typically prohibited to prevent market distortions and ensure that FTZs are used primarily for manufacturing, assembly, and distribution activities.

Focus on Export and Re-export: The primary activities allowed in FTZs include cross-docking, reconfiguring products, and preparing goods for re-export, which align with their goal of promoting global trade.

Tax and Duty Benefits: Retail sales in FTZs could complicate tax and duty arrangements, undermining the benefits provided to businesses operating in these zones.

United States Customs and Border Protection (CBP). (2020). What is a Foreign-Trade Zone (FTZ)?

World Bank Group. (2008). Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development.

asked 16/09/2024
Juned Kazi
41 questions
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