Canoo FTZ comes into force

The US Customs and Border Protection (CBP) federal agency has officially approved final activation of the Oklahoma City operations of US commercial EV maker Canoo as a foreign-trade Zone (FTZ).

The activation status qualifies Canoo to take advantage of FTZ benefits, effective immediately. This final designation “will allow Canoo to significantly streamline its operations, offering financial and logistical benefits as the company aims to scale production of its modular commercial EVs for customers in the US, UK, Europe and the Middle East”.

Initial approval for the FTZ was received in March last year. FTZs are secure areas under CBP supervision that are generally considered outside CBP territory upon activation. Located in or near CBP ports of entry, they are the US version of what are known internationally as free-trade zones.

Under zone procedures, the usual formal CBP entry procedures and payments of duties are not required on foreign merchandise unless and until it enters CBP territory for domestic consumption, at which point the importer generally has the choice of paying duties at the rate of either the original foreign materials or the finished product. Domestic goods moved into the zone for export may be considered exported upon admission to the zone for purposes of excise tax rebates and drawback.

Among the advantages of an FTZ, the CBP highlights:

— CBP duty and federal excise tax, if applicable, are paid when the merchandise is transferred from the zone for consumption;

— While in the zone, merchandise is not subject to US duty or excise tax. Certain tangible personal property is generally exempt from state and local ad valorem taxes;

— Goods may be exported from the zone free of duty and excise tax;

— CBP security requirements provide protection against theft;

— Merchandise may remain in a zone indefinitely, whether or not subject to duty.

“We thank Oklahoma City Customs Port Director Pequano and the Dallas US CBP Area Port office for the work, support and direction for the activation approval. It is great to get this milestone completed as it is part of a larger strategy with more to come,” says Canoo CEO Tony Aquila.

Canoo has been speeding up relocation of its operations to Oklahoma City in anticipation of the FTZ certification. It saw record revenues in Q2 and is hoping that new customers may announce agreements to purchase more of its vehicles as early as before the end of this month.

Its growth ambitions include large existing and new US fleet customers, as well as wins internationally.