Fact Pattern 22-1
Naida Baronowski is an American fashion designer who has a design firm in Chicago. Naida has been successful in the U.S. and wants to expand her operation overseas. She hopes to open shops in Paris, Milan, Madrid, Rome, Vienna, and Moscow in the next several years.
Naida is unfamiliar with foreign operations. She comes to you, her attorney, for advice about how she should pursue her goal of becoming an international fashion company.
-Refer to Fact Pattern 22-1. Naida opens a shop in Madrid, and has incomplete pieces of her clothes sent to Spain from her Joliet plant. The materials go to an area where they are assembled into completed clothing. The finished products are shipped to Madrid. The Spanish government taxes the finished clothes once they leave the area. This is known as:

Question

Quizplus · Accepted Answer

The situation described in the fact pattern is an example of a foreign-trade zone, which is a designated area within a country that is considered outside of the customs area for the purposes of tariff and duty assessment. In this case, Naida's incomplete clothing pieces are being shipped to a foreign-trade zone in Spain where they are assembled and then shipped out to be sold. The finished products are subject to taxes once they leave the foreign-trade zone.

Fact Pattern 22-1 Naida Baronowski Is an American Fashion Designer Who Has a Who