June 19, 2025 • 46 mins
Dive into the fascinating world of Foreign Trade Zones with Michelle Terorotua, Director of Marine and Aviation at Compass Logistics and Marine, as she reveals how these specialized marinas revolutionized South Florida's yacht industry.
South Florida pioneered the concept of Foreign Trade Zone marinas about seven years ago, creating a game-changing solution for luxury yacht sales. These zones allow foreign-flagged vessels to enter U.S. waters without immediately paying import duties—critical when those duties can reach millions of dollars on high-value yachts. Michelle explains how the program has expanded from its Fort Lauderdale origins to locations throughout Florida and is now being replicated in Georgia and Rhode Island.
The economic impact is staggering. With the marine industry generating $24.6 billion in Florida and supporting 149,000 jobs across the tri-county area, Foreign Trade Zones help maintain this economic engine by attracting international vessels that require services, maintenance, and refits during their stay. Michelle walks us through the process of becoming an FTZ operator, detailing the application process, compliance requirements, and potential benefits for businesses serving the marine sector.
We also explore the differences between FTZs, boat show bonds, and temporary imports, learning why vessels valued over $16.5 million essentially require FTZ status due to bonding limitations. Michelle shares insider knowledge about zone transfers between facilities, streamlined activation processes, and navigating new challenges like the Lacey Act's wood reporting requirements for imported vessels.
Whether you're a yacht broker, marina operator, maritime attorney, or service provider in the marine industry, this episode delivers practical insights into maximizing opportunities within South Florida's thriving marine economy. Subscribe now and join us for more legislative updates affecting the marine industry throughout Season 3.
Wards Marine Electric
https://www.wardsmarine.com/
Wards Way YouTube Channel
https://www.youtube.com/@WardsWay75
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Kristina Hebert (00:00):
Welcome to the Season 3 Wards Way podcast,
where we're covering the hotlegislative topics of 2025.
From tariffs to tunnels andbridges, from foreign trade
zones to workers' compensation,to the Fort Lauderdale
International Boat Show, to theMarine Research Hub, industry
(00:22):
experts and clarification on theB1, b2 visas.
Join us as we celebrate 75years in business and we're just
getting started.
Welcome everybody to seasonthree, today's episode.
I'm with Michelle Tarortua andshe is the director of Marine
and Aviation with CouplesLogistics and Marine, and we are
(00:43):
here today to talk aboutforeign trade zones amongst many
of the new legislative issuesaffecting our marine industry.
So welcome, michelle, thank youfor being here.
Thank you for having meAbsolutely.
Michelle Terorotua (00:54):
I'm happy to be here.
Kristina Hebert (00:55):
So talk to us about a foreign trade zone and
what that means to this industry, and especially here in South
Florida.
Michelle Terorotua (01:02):
Well, in South Florida we have something
called a foreign trade zonemarina, which was a brand new
concept that started here maybeseven, eight years ago in South
Florida.
We were the first in the nationto actually activate and test
that program.
The program works quite well.
We have expanded those marinasfrom the first couple or handful
(01:27):
into, I think, here in FortLauderdale we have seven now.
There's one in Miami, one inPalm Beach, one in Fort Pierce
and there's some on the westcoast of the US and currently I
am working on activating some inGeorgia.
Currently I am working onactivating some in Georgia,
rhode Island.
Kristina Hebert (01:45):
Wow, yes.
So now, what makes these unique?
Because my understanding,obviously before being in this
industry, is that foreign tradezones were a port item.
It's something that really onlyoccurred into the ports.
What made South Florida have itgo beyond kind of those borders
, so to speak?
Michelle Terorotua (02:05):
Well, foreign trade zones
traditionally were located inports, but those ports allowed
you to expand outside the portparameters and do subzones or
usage-driven facilities.
There are quite a number offoreign trade zone warehouses
here in South Florida that areoutside of the ports is here in
South Florida that are outsideof the ports Okay.
So, and with the Foreign TradeZone marinas we are actually
(02:28):
usage-driven.
What is it?
Alternate framework from theFort Lauderdale Executive
Airport Okay, foreign Trade Zone241.
All right.
So here in Florida it is abenefit because we are the
yachting capital of the world.
Absolutely, we have yachts thatwant to come here for sale and
(02:51):
try paying the duty, or considerpaying the duty on a 20, 30, 40
and up million dollar yacht.
Just isn't really somethingmost people want to do.
So the foreign trade zonemarinas allow you to put your
yacht into that foreign tradezone without benefit of duty.
So it allows you to offer itfor sale to all residents, all
US residents, foreign entitiesas well, and it also allows you
(03:16):
to show the boat.
You can temporarily withdraw itto go into a boat show and
still offer the boat for saleunder the foreign trade zone.
It allows you to go on seatrials, go into a boat show,
okay, and still offer the boatfor sale under the foreign trade
zone.
It allows you to go on seatrials.
You can go into the yard andhave work done temporarily.
You can go to brokers, openhouses and still offer your boat
for sale, all while it's underforeign trade zone, okay and who
(03:39):
?
Kristina Hebert (03:39):
what are the?
Who else benefits from havingthis foreign trade zone?
So we talked about marinas, butthere are brick and mortar
buildings and businesses thatbenefit from it too.
Michelle Terorotua (03:48):
What are some other?
I would think that there aresome.
It also allows you to put yourforeign manufactured goods onto
the vessels without benefit ofduty.
If there are companies likeyourselves that do provide
services to these super yachts,you are still allowed to go on
(04:10):
board that vessel and do certainmaintenance on the vessels.
They can come out and go intoshipyards and get up to 120 days
and have work done there aswell, so your company may
provide a service to that vesselwhile it's in that shipyard.
So that does benefit companieswithin the marine industry that
do provide those services andthey can still provide that
(04:33):
service when the vessel is outtemporarily in a shipyard to
have some work done.
Kristina Hebert (04:38):
And that's an incentive for commerce for the
United States.
Because some people will saywell, why should we give rich
yacht owners a break, and ifthey're coming here it should be
imported to duty.
Michelle Terorotua (04:50):
But it's all of the economic impact it is,
it's the jobs it absolutely isand I think, if memory serves me
, your industry, the marineindustry, provides.
I think it's 138,000 jobs inthe Tri-County area.
Yeah, I think it's almost $2billion in revenue, if memory
serves me as well, to oureconomy $2 billion, consider
(05:11):
that Right, that is a lot ofmoney, so we want to incentivize
that as much as possible,absolutely.
Producer.
Kristina Hebert (05:16):
Jordan, can you fact check us on our?
She's going to go to the MarineIndustries Association.
I think they have that there.
They do and so on, the inaddition, the $2 billion or the
jobs Either one, Okay, see whichone.
And so the foreign trade zone.
So how does a company, if I'mlistening to this, and say I'd
(05:40):
really be interested in that Iobviously deal with a lot of
yachts that come in and howwould I be able to be a part of
the foreign trade zone?
Can I be it?
How does Wards become a part ofthe foreign trade zone?
Michelle Terorotua (05:52):
Yes, it's absolutely possible for you.
What we would do initially isarrange a site visit.
Kristina Hebert (05:57):
And your company could help me with that.
Michelle Terorotua (05:59):
Yes, we arrange that for you.
We act as a consultant betweenthe FGC, grantee and customs, so
we would arrange a preliminarysite visit for the viability of
the facility.
Customs would come out, they'lltell you if you need to add
cameras, if you need to add moresecurity.
(06:19):
They'll ask about yourinventory system, they'll ask
about staff and things of thatnature and then they'll say yes,
I think this will be a greatsite.
Please proceed with yourapplication.
At that point we would submitthe application to the grantee
first and then, once the granteeauthorizes or says yes, the FTZ
(06:43):
board concurs.
Then we submit the actualapplication to Customs and they
in turn start their process ofvalidating the information we've
provided to them and usuallywithin 30 to 60 days it can come
to fruition.
Okay.
Kristina Hebert (07:00):
And then, how long do these applications last,
if I get accepted?
Michelle Terorotua (07:04):
And then how long do these applications last
?
If I get accepted, you have asunset date, and it's usually
three years from the applicationor from the approval date, and
if you do not do any businesswithin that three years, then it
will sunset or close down.
If you continue to conductbusiness as an FTZ, then your
sunset date is extended.
Kristina Hebert (07:26):
Okay, and then how long does that status last?
So I'm approved, I'm authorized, I become a foreign trade zone.
What do you call it?
A foreign trade?
Michelle Terorotua (07:35):
zone business.
Kristina Hebert (07:36):
Yeah, so you're a usage driven foreign trade
zone facility, and so I wouldhow long does that?
Michelle Terorotua (07:41):
status last.
That lasts as long as you're ingood standing and you pay your
annual fees to the grantee andpay for your bond.
Kristina Hebert (07:49):
There's enough incentive that it's not like.
This is something that's goingto last a year or two.
And some people have to investin maybe their computer software
, you're saying, or cameras.
Michelle Terorotua (07:58):
It is an investment and it's in your best
interest to make sure that youcomply with all the regulations
and that you don't get in thecrosshairs of customs.
Absolutely not, because they'rethe ones that can prevent you
from continuing on as a foreigntrade zone.
Kristina Hebert (08:13):
But it is nice to know that once you do invest
in it and you develop this andit's working for your business,
that it can continue as long asit's a successful venture and
you're compliant Exactly.
Excellent.
Compliant is the big part of itNow you're planning to go to
Washington too to talk about FTZand meet with an FTZ board?
Tell me about that.
Michelle Terorotua (08:33):
Yes, I am.
So I'll be joining the MIASFMarine Industries Association of
South Florida in DC again thisyear, so it's a privilege to be
asked to go.
Kristina Hebert (08:45):
So I'm really quite honored to be going.
Yes, it is.
Michelle Teroro (08:47):
Congratulations and we will be meeting with
Coast Guard specifically withemissions compliance issues for
the large engines on these bigyachts.
We meet with Customs, we meet.
Who are we meeting with?
We will be meeting with FTZ.
We're going to be meeting withthe USDA PPQ people as well for
(09:07):
the new Lacey Act that wasimplemented that affects yacht
importations as of December oflast year.
Kristina Hebert (09:14):
Do you want to talk about that?
Do any of these things?
You want to go into detail?
You're welcome to.
I do have your numbers, oh okay, producer, what do we have so?
Speaker 3 (09:23):
for our region we have 149,000 jobs in our region,
but specifically in Broward wehave 121,000.
Kristina Hebert (09:31):
So of the 149,000 in the tri-county area,
Broward is 121.
Speaker 3 (09:42):
And then Florida generated $24.6 billion in
output but specifically $9.7billion of that came out of
Broward.
Wow, okay, yeah, so the numbersare even more impactful.
Thank you, this was an MISFreport okay specifically.
Kristina Hebert (09:55):
Thank you, thank you yeah, so it is uh so
the economic impact is ismassive, massive for sure it.
Michelle Terorotua (10:01):
You know, you.
I don't know how you can be inthis county and not realize what
runs this county or runs SouthFlorida.
The economic impact is immense.
Kristina Hebert (10:13):
Well, you know you mentioned the Marine
Industries Association of SouthFlorida and I know I've gone on
a couple of these tours and I'msure you have too where they do
a great job of taking out city,commission and county
commissioners and notnecessarily those city
commissioners that are in thecity of Fort Lauderdale because
they have access and know theirlovely city, but sometimes just
(10:35):
a neighboring city or aneighboring county and being
able to go.
And I witness every time on awater taxi tour that they say
you know, I've driven down 95and I just never noticed this
marina or I never noticed thatfacility, and so once you open
people's eyes to it, people aredefinitely very aware and very
(10:55):
supportive of our industry.
So I do give kudos to MISF forthat.
So you're going to.
Washington you're talking about.
You said you're meeting withthe Foreign Trade Zone Board.
Yes, is that just to kind ofhere's how the program's going?
Yes, this is the okay.
Michelle Terorotua (11:09):
That's exactly it Just to reiterate how
successful this program is andthere is really a fraction of a
percentage of issues that mightarise.
You know, with anything you'regoing to have an issue.
Kristina Hebert (11:22):
Of course.
Michelle Terorotua (11:23):
But it's so minute that it really is not
impactful on the program.
Overall, it's a great programand that's why it's being for
lack of a better word it's whyit's being copied in other
states and other parts of thecountry.
Kristina Hebert (11:38):
Isn't they say, the greatest form of flattery
is imitation Exactly.
Michelle Terorotua (11:42):
Exactly so, it is a great program.
Is imitation?
Exactly exactly so, it is agreat program.
I thoroughly enjoy the program.
You know being administrating,I should say the marinas that I
do, you know.
I make sure they're on theirtoes, we're all on our toes.
I do quarterly reviews, youknow, continuing education to
(12:03):
make sure any changes that comedown from headquarters that
we're all aware of them and thatthe vessels for the really the
vessels are complying with thoseregulations as well and that
they are fully aware of whatthey're, what they can and can't
.
Do we call it the no fun zone?
To be honest with you, can't dowe call it the no fun zone to
(12:28):
be honest with you that was aphrase that came from Megan
Lagasse at Pier 66.
The no fun zone, because reallyyou have no leisurely use of
your vessel.
The purpose is to offer yourvessel for sale honestly and no
owners can come on board andhave lunch or bring their
friends for a party.
You can't go out of the slipand go down to Miami for dinner
and then come back.
That's just not things that youcan do.
(12:48):
But you can sell your boat andthat's the most important thing.
Kristina Hebert (12:52):
Well, and I do think you know I mean we talk
about this all the time in ourindustry and where we confuse
the lifestyle with having anindustry.
And so when we think of boatingand we think of yachting and we
think of boat shows, and we dowant to think about the fun,
because it's on the water andthere's no greater experience.
But at the end this is aboutbusiness and it's about.
(13:14):
It is about I'm trying to thinkof the proper verbiage, but
it's really making sure thatbusiness transactions and
commerce can trade hands withinthe laws of the United States,
but also giving incentives tosay you don't have to pay 1.5%,
or now, what would the 10%tariff?
Do you want to comment on that?
What would that be now?
Michelle Terorotua (13:36):
So the 10% tariff is the universal tariff
and honestly I don't see a timein the very near future that
that is going to go away.
I think it's something we haveto learn to live with for the
time being.
So if you have, you know, let'sjust say you have a $20 million
yacht, 11.5% duty is quitesubstantial and you may not
(13:59):
actually end up selling yourboat.
So when you do put it in theforeign trade zone, you can
offer it for sale, you can putit in a boat show and if you
don't sell it you haven't lostthat 11.5%.
You export your boat back out,pop over to Bimini, close out
the FTZ bond and the entry andthen you can use your boat and
(14:19):
have as much fun as you wantwith it.
Kristina Hebert (14:22):
That's right.
You're outside of the foreigntrade zone, so the fun zone
begins.
Yes, exactly, so fun zone doesnot equal foreign trade zone.
Michelle Terorotua (14:29):
No, it does not.
Sadly it does not, but again,the purpose is to be able to
offer you both.
Kristina Hebert (14:34):
Sure is for business, and so what are the
other topics?
So you mentioned the Lacey Act,which I know that in and of
itself can be a big topic, butdo you want to cover that?
Yeah, I can very briefly touchon that.
Michelle Terorotua (14:46):
So the Lacey Act is part of the USDA program
, the PPQ Plant Protection inQuarantine Okay, thank you.
It has phases that have evolved, I think, since I'm going to
say 2008.
I could be wrong, and one ofthe last phases was, I believe,
december 4th of 2024, where theystarted paying attention to the
(15:10):
wood and wood products inyachts.
So what that means is you needto provide on this LACI form,
ppq, form 505, the genus, thespecies, the country of harvest,
the cubic meters and the valueof that component.
(15:30):
Okay, so is there wood in theshaping of the hull before you
put your composite on it?
Okay, is there wood cabinets?
Is there wood bases to yourchairs or your tables, or is
there wood paneling on the wallswithin the boat?
Those are all the things theywant to know about.
(15:51):
But those are all answers tothose questions are, yes, there
is, but you got to know that thebuilder has to provide you with
all of the pertinentinformation for that document,
which again is genus, species,country of harvest.
One of the things they look atvery closely is teak,
specifically Myanmar or Burmesewhichever term you want to use
(16:17):
which is illegal.
You can't have that on yourboat, you can't import it.
So that is one thing thatthey're looking closely at again
is teak products so theresponsibility is falling onto
the builder.
Kristina Hebert (16:31):
It is, what about the suppliers of of the
teak I?
I can imagine a builder sayingI've I've had the same teak
supplier for for 10 years.
Bob comes by, bob didn't tellme I had a new form.
Am I supposed to have a newform?
But the builder bears theresponsibility which they should
know the goods going in tobuild their product Well exactly
(16:54):
.
Michelle Terorotua (16:54):
They have to know where their supplier is
sourcing the goods, and actually, I believe, in Europe.
This has been in effect since2013.
So they've had more time itshouldn't be new news for them,
but they still balked at it.
A lot of them balked.
They pushed back really hard onit, but I think we currently
have pretty much everybodyaligned.
There is always going to be ananomaly, but the most difficult
(17:16):
part of the LASI act is the usedboats.
Sure, buying a used boat.
Kristina Hebert (17:21):
Where's the history of that?
What if the builder is notaround?
Michelle Terorotua (17:24):
Right, exactly.
So if it was built after, Inever thought about that.
Yeah, yeah.
So if it was built afterDecember 31st 2007, it is
required to have lease the actinformation.
Prior to that, you are exempted.
Okay, so that is the issue withused boats.
A lot of this is often thesecond and third buyer.
(17:45):
Sure, where are they going toget that information?
So if we know who the builderis and we have some sort of
history or rapport with them, wewill reach out to them and say,
hey, could you possibly provideus with whatever information
you can for this?
You know 2011 project.
You know lagoon 42, whatever itmay.
Be sure, um, sometimes we're,you know we're able to get
(18:08):
information.
Sometimes we're not, but whatum usda ppq has said is to do it
to the best of your ability, doas much research as you can and
prove that you've done yourresearch.
Okay, enter into there what youknow or what you're able to
obtain.
And basically, that is duringour call with them.
(18:30):
We had a Zoom call with themseveral months back.
That was their advice toeverybody Do the best you can,
do your research and prove thatyou've done your research and
present whatever information youcan to the best of your ability
.
Kristina Hebert (18:41):
When there's a violation, what's the
consequence?
Michelle Terorotua (18:45):
Well, it's a monetary violation.
Kristina Hebert (18:50):
Percentage of price of vessel of vessel?
Michelle Terorotua (18:52):
yeah, most likely a percentage.
Um, I personally do not recallif there was a specific monetary
amount said to it, but that'sone of the things I can ask when
I'm in dc next exactly.
Kristina Hebert (19:04):
And then, um, you know, yeah, let's say we go
back to prior 2007,.
Were people reporting thespecies and any of that?
So, even if you do have arelationship, was that being
reported?
Michelle Terorotua (19:17):
No, so it's really hard to come by.
None of it was being reported.
September of last year is whenthe notice came out that the
final part of this phase wasgoing to be implemented on
December 4th.
So I sent an email out to quitea few people.
Patients from MIASF was one ofthem.
I sent it out to all of thebuilders I deal with in Europe
(19:40):
that I import for them, so Itried to give everybody as much
of a heads up as I possiblycould.
Some people didn't really takeit seriously, unfortunately, but
I think we're in a good placenow.
Okay good.
I think we're in a good placefor the majority of what we're
working on.
Kristina Hebert (19:59):
And it's just probably getting it out to the
builders and making sure they'reaware.
And then, on the used boatmarket, is this something that a
Marine Max has to go lookingthrough all of their inventory
and say they may well?
Michelle Terorotua (20:12):
Okay, they may well, I do some work for a
couple of lenders as well, andwe've run into the issue where I
simply cannot import the boat,so they can't finance the boat.
I can't import the boat becauseI cannot get the lacy
information interesting yeahbecause we have to have that
(20:32):
documentation too as brokers,whereas we don't have to upload
it with our entry like we do theepa portion.
Okay, customs, we have to haveit in our hand, we must have it
in our file and we have to sendit to usda.
Interesting.
So if I cannot get thatinformation, I have
unfortunately had to tell peopleI cannot import your boat.
Kristina Hebert (20:52):
Is that something that you're going to
talk to them about?
That that maybe is there.
If the information's notavailable, and now we're harming
that commerce that we're tryingto.
Is there a fix in there?
I'm not sure that there's a fix.
Michelle Terorotua (21:05):
We did.
There was a question.
We sent out our questions orour concerns to them.
Kristina Hebert (21:13):
Like a comment period.
Michelle Terorotua (21:14):
Yes, okay, so we're hoping that when we're
in DC this next week thatpossibly they may have some
responses for us.
Kristina Hebert (21:22):
Okay, and what was one of the other topics?
So you, you talked, you met,you mentioned meeting with CBP
and I know that.
Um, I sat with you at the lastCBP meeting, um, looking for
some clarification.
I don't know if you want totalk about that.
We, we are hopefully having CBPas a special guest on season
three, um, but we're goingthrough the um, we're going
(21:44):
through the uh vetting process,so to speak.
Michelle Terorotua (21:46):
And.
Kristina Hebert (21:46):
I get it.
They want to make sure thatwe're a, especially after what
happened.
They want to make sure that I'mnot this rogue media person
that's going to try to.
I don't know if that's whatthey're trying to do, but I do
think that they need to makesure we're credible, we're
presenting them with thequestions, and that my goal and
I let them know that my goal wasto create a session that I
(22:09):
could send out to captains, Ican send out to you, that you
could say here's a one-on-one umwith CBP on a podcast.
It lives in YouTube forever.
Here's the do's, here's thedon'ts.
This is what we said, this iswhat we didn't say, not on a big
panel, but but but.
Cbp was very helpful inoffering a clarification on
something that was they were.
Michelle Terorotua (22:31):
If you want to go into that please,
Immigration isn't really mypurview but, I, do get asked a
lot of questions about it andafter what happened in Palm
Beach it was really good to seethat CBP was willing to sit down
at the table with us and answerour questions.
(22:51):
They were so very receptivehere in Fort Lauderdale and they
did have some people come upfrom Miami and they had
headquarters on with us.
Yes, so they could hear ourconcerns and possibly come up
with some solutions.
And I think at the end of thatday we did come up with some
answers and some solutions andsome solutions.
And I think at the end of thatday we did come up with some
answers and some solutions.
Kristina Hebert (23:10):
And some clarification.
Michelle Terorotua (23:12):
Yes, and there were some others that
headquarters was going to checkfurther into, so hopefully we
will have, and they issued astatement.
Kristina Hebert (23:20):
They did issue a statement Clarifying, which is
like putting it in writing yes,so just to give the listeners,
listeners or the viewers forthose of you on youtube uh,
wardsway, by the way um they.
There was a panel that was doneduring the um palm beach boat
show.
Various questions were askedand cbp is very good about doing
these um community outreachpanels at boat shows that they
(23:44):
know they're going to have avery specific audience of
captains, crew, yacht managementcompanies such as yourself that
really know, you know, kind ofknow the industry and have very
specific stick your hand in thewhat-if bag.
A question was asked.
A person answered it.
It had a little bit ofvagueness to it and it sent the
doc rumors spiraling but we wereable to through the
(24:06):
relationships I'll give MarineIndustries Association of South
Florida and yourself for havingthose relationships with CBP.
They had a meeting.
There must have been 25 peopleat this table.
We ran out of chairs.
There were lawyers, there wasmedia I was there the lobbyists
were there and they couldn'thave been more hospitable, more
(24:28):
open communication, like yousaid, than the person from
Washington.
And then, ultimately, we said,hey, could you issue a
clarification letter?
And I think some people thought, well, I don't know if they're
going to do that.
And they did.
And so I really just wanted togive a shout out to them that I
do feel like there's been a lotof reciprocity in the
communication and workingtogether.
(24:48):
I think they trust us as anindustry.
Oh, I think so.
I think that we've proven to beyes.
Michelle Terorotua (24:54):
Through the Marine Industries Association of
South Florida.
They are such an advocate forthe industry as a whole, agreed,
and they have a very goodrelationship with CBP Fort
Lauderdale, miami, palm Beach,as well as the Coast Guard, and
(25:14):
I think that through them,through them being like the
intermediary, has been a greatbenefit for us and I think,
through them, arranging thismeeting was most beneficial.
But I think, through them again, that we're going to see a lot
more clarification because ofthat relationship and because it
(25:37):
is a very good relationship andI think it's really important.
I mean my entire career, whichis 38 years long, my
relationship with customs is oneof the most important
relationships I can have.
And knowing who your portdirector is, knowing who the
chief and the soup are of tradeand knowing who's in charge of
(25:57):
immigration, and having theseconversations and reaching out
to them and them being receptiveBecause there was a time here
in Port Everglades where we didnot have that.
It went from a good receptiverelationship to a quite I don't
want to say toxic, but I did saythat and a bit of a
(26:18):
antagonistic relationship for avery brief period because of
specific individuals.
But we have really moved pastthat.
Kristina Hebert (26:28):
Good.
Michelle Terorotua (26:29):
We have a great relationship with customs.
Again, they're very receptivehere in Port Everglades, same in
Miami.
I don't deal too too much withPalm Beach, just on occasion and
I can't say I've had any issuesthere.
But those relationships arevery important.
It's not just in the yachting,it's in in general, because we
(26:49):
don't do just yachts, sure, I doairplanes.
I was gonna say, we do allgeneral commodities, we do
everything.
So having that a goodrelationship is very important.
Kristina Hebert (26:59):
And South Florida is very unique too.
I think that as far as a region, even the officers that were
sitting at the table that dayand even the people up in DC,
they recognize that variousregions of the country are very
different and that we are verydriven.
We push CBP to the limits asfar as our planes, our yachts
(27:23):
and the amount of goods comingand going, and so I think it is
helpful to have that nicerelationship, but also that they
can rely on us, and we've hadto make corrective measures in
our industry as well.
We have sent out clarificationto captains and crew of the do's
and don'ts.
Don't do this, be prepared,have your information.
I can't tell you and, speakingwith one of your colleagues
(27:45):
earlier today, people have ontheir websites just different
checklists and recommendationsfor crew to work together to be
in compliance with CBP.
So I think they sense that, andso we have the Lacey Act, we
have CBP, we have the foreigntrade zone.
What else was on here?
Michelle Terorotua (28:04):
That's quite the legislative agenda.
Coast Guard for EPA, for EPAOkay, yes.
One thing I did want to touchon, though what else was on your
?
That's quite the legislativeagenda.
Coast Guard for EPA compliance,okay, yes.
So one thing I did want totouch on, though, and it has to
do with the need for foreigntrade zone, is boat show bonds,
oh please.
Kristina Hebert (28:19):
Yes, that's a big one, so start from the
beginning on that one for sure.
Michelle Terorotua (28:23):
So boat show bonds started many years ago
with Steel Reader and I'm notsure who else was in that with
him, some attorneys to get a wayfor boats to be shown in a boat
show without having to pay theduty.
Why do I pay the duty to put myboat in a boat show that I
might not sell and then I'mgoing to leave again.
(28:44):
So the Boat Show Bond allowedyou to come in, put your boat in
a boat show without paying theduty.
But to do that you had to posta bond and the bond was for two
times the possible duty of theboat and it was a six month term
.
It would cover you all the wayfrom Flibbs to Miami to Palm
Beach and then you leave you.
If you don't sell the boatwithin that time frame and
(29:05):
import the boat and pay the duty, you would need to depart
within that six month time frameand time out from there.
Kristina Hebert (29:11):
And if people have gone through a boat show
and seen the sign that says notfor sale to in us waters, to us,
is that what that's about?
No, oh, so tell me about that,completely separate okay, okay,
yes.
Michelle Terorotua (29:26):
So with the boat show bond, the reason I
mention it is, and how FTZs tieinto it is the more expensive
your boat gets, the moredifficult it is to get a boat
show bond.
So once the duty reaches$500,000, so two times the duty
once you get to that $500,000threshold we cannot just write
(29:49):
that bond.
We have to have a dossier onthe beneficial owner.
Oftentimes they want financialsand, as we know, the only asset
of the owning entity is thevessel and it is a money pit.
There's no financials, there'sno money being made, unless you
have a big charter operationpossibly.
So once you reach that $500,000threshold you need to go FTZ.
(30:17):
Okay, because we can write theFTZ $500,000.
So every boat that goes into anFTZ has to have a subrogation
bond between them and the FTZmarina.
We can write, and the maximumamount of bond that we can write
is up to whatever the FTZ'sbond is.
So most FTZ marinas carry a$500,000 bond.
(30:38):
So we can write a $500,000 bondevery day of the week, without
financials, without knowing whothe beneficial owner is.
We do have to have anapplication that has to be
submitted to the surety withcertain information and up to
(30:58):
$500,000, we can write them allday, every day, gotcha.
So an FTZ is very beneficial,especially when it comes to the
value of the boat.
If you have a $100 million boat, ftz is where you're going to
go.
You will never well, let me notsay never, but I would say
there's a greater chance thatyou will not get a boat show
(31:20):
bond written.
Kristina Hebert (31:22):
So you need to go FTZ.
So in doing the math, do youknow what that value of the boat
is?
To get to the 500?
Well, now it's a much lowervalued boat because you're
paying 11.5%.
Michelle Terorotua (31:34):
It's $16.5 million.
Okay, you write a $495,000 bond.
So really, once you reach the$16.5 million threshold, a boat
show bond is not for you.
Once you get over that, it'snot for you because that's a
$495,000 bond.
So you need to go FTZ to makeit easier on yourselves but also
(31:59):
cost-wise, the cost is notexorbitant to do the subrogation
bond for a foreign trade zone.
Kristina Hebert (32:05):
So how do we get that message out?
Michelle Terorotua (32:15):
Well, I actually give presentations to
yacht brokers and dealers.
I've done it numerous times andI explain the difference
between a boat show bond andforeign trade zone and the
difference between a TIB, whichis temporary import under bond.
So I give those presentationspretty regularly.
Kristina Hebert (32:27):
Okay so.
Michelle Terorotua (32:28):
I'm trying to get the word out there, okay,
as much as I possibly can.
Kristina Hebert (32:31):
Is that?
Michelle Terorotua (32:32):
on your website.
It should be on our website.
And your website isCompassLogisticsMarinecom.
Kristina Hebert (32:38):
Okay, compasslogisticsmarinecom, and
then you will have that andyou'll explain out the three
different bonds.
Michelle Terorotua (32:43):
Yes, Okay, I have a PowerPoint presentation
on that.
Explain out the three differentbonds.
Yes, okay, I have a PowerPointpresentation on that.
And actually in June I amspeaking at the Southeastern
Admiralty Law Seminar, seals,sealy it's called Okay, their
annual maritime law convention,I guess it is so I've been asked
(33:06):
to speak at that.
It's in san antonio in june, soI will be giving that
presentation at that um event.
Um, so it's supposed to beabout 400 maritime attorneys,
which is a bit daunting for me Iam not a public speaker, so
we'll see how well this actuallygoes.
Kristina Hebert (33:23):
Great, though, you're speaking to well more
than 400 people now, so you'redoing a great job.
Michelle Terorotua (33:29):
So I'm really excited about that.
That will be my biggestpresentation yet.
Usually it's well.
I think the most I've done asfar as broker-dealers has been
165 people, but on Zoom, fromaround the world, a company that
has international offices aswell.
But again, I do it on a regularbasis.
(33:50):
I'm trying to get the word outthere.
I'm trying to make my lifeeasier.
The more people that know, theeasier it is for me.
Kristina Hebert (33:57):
So I have a question, and you strike me as
the person who's going to havethis answer Do you know how many
foreign trade zone slips thereare?
Michelle Terorotua (34:06):
locally.
Well, the marina, how do I saythis?
So the marina is um a foreigntrade zone, but only the slips
that we activate.
Kristina Hebert (34:17):
Correct are okay, trade zones, so you have
seven marinas activated, whichis how many slips do you know?
Michelle Terorotua (34:24):
um how many slips they have in total.
No, I'm so sorry.
I sorry, I don't know how manyslips.
Kristina Hebert (34:27):
That's okay.
I didn't ask you ahead of time.
We didn't rehearse this.
This is just us.
Michelle Terorotua (34:31):
I don't know how many slips are at each
marina?
Well, because I'm thinkingCurrently I probably have.
I'm going to guess that I haveabout 20 FTZ boats and slips
right now is my best guess.
Kristina Hebert (34:42):
But let's say you have seven marinas, would it
be a high number to say 10slips per?
Michelle Terorotua (34:48):
marina.
Oh no, they can have everysingle slip in that marina.
Be FTZ they could, but do youknow?
Kristina Hebert (34:53):
that but like, for example, I know in going to
local marinas, you see the slipsare very clearly marked FTZ.
Michelle Terorotua (35:01):
Yes, that means that slip is already
activated and there's a boat init.
Okay, even if there's not aboat in it it's still activated
yes, that means that the boat istemporarily out for sea trial,
yard work, brokers, open houseor a boat show.
But as long as that sign isthere, that okay, okay, so wait
a minute, so maybe I've had thiswrong.
Kristina Hebert (35:19):
I thought I'm marina, a um and I am um.
I'm gonna tell you up front Iwant to activate 10 slips.
Or can I activate 10 slips andsay, oh Michelle, I had three
more boats come in and they wantto do this.
Can I activate three more?
Can they do that at any point?
Or do they have to do it kindof up front these are activated,
(35:42):
these are not.
Michelle Terorotua (35:42):
They can do that if they want to, but based
on most marinas' business model,they don't do that because an
empty slip is money down thedrain Right.
So they do not activate a slipuntil they know they have a boat
that needs to go in it.
So once that boat signs thecontract, and then I go ahead
and I activate that slip andthen I proceed to put the boat
(36:05):
into the FTZ and post the bondfor it.
Okay, so again, and then oncethe boat leaves, it departs
permanently from the FTZ, wedeactivate that slip, because
once that slip is activated youcannot put another boat in it,
even if the boat that issupposed to be in.
Kristina Hebert (36:21):
That slip is out of it.
It was going to be that it'sactivated per boat.
Per boat.
It's not a slip that'sactivated.
It's activated per boat, butthen the slip becomes
deactivated when the boat leavespermanently.
Michelle Terorotua (36:34):
So the slip gets activated.
A boat goes into it.
Okay, all right.
And one of the conversationsI've been having today with
somebody is they want to go upthe coast, let's say, and into a
yard to have some work done.
Yep, so that's a temporarywithdrawal.
I have to request that.
You have to tell me whereyou're going, how long you're
going to be there and whatyou're having done.
Okay, and then I request thetemporary withdrawal for you to
(36:55):
go up there, and if you want tosee trial while you're up there,
I'll put that in my request.
But once you're done up there,you have to come back to your
slip and go back into it beforeyou can depart the US
permanently.
So that's one of the issuesthat we talk about most often
with people is that you cannotdepart from the marina or the
(37:19):
shipyard that you're temporarilyat.
You have to come back to yourFTZ slip, gotcha, and then I
will request again, requestagain from custom for permission
to leave.
But while that boat is out ofthe slip up up the coast in a
shipyard getting some work done,that slip belongs to that boat.
They have to continue to payfor it, even though they're not
sitting in it because the Marinacannot put another boat in
(37:41):
there.
Gotcha yeah.
Kristina Hebert (37:43):
Now I have a question.
I had my fingers over herebecause I have two things that I
want to ask One would itbenefit?
A and I don't know if I'mgiving away trade secrets and
you don't have to answer, or youcan say yes or no.
Would it benefit?
Let me go back to my previousquestion.
Can you go from forward tradezone to forward trade zone?
Michelle Terorotua (38:03):
You can.
You can do a zone transfer.
Kristina Hebert (38:06):
Okay.
Michelle Terorotua (38:07):
So say, you have somebody sitting at Bahia
Mar and they want to go to LMC.
Okay, so two differentcompanies, two different foreign
trade zones.
Yep.
So the receiving foreign tradezone has to do the transfer so
that boat can transfer fromBahia Mar to LMC.
Okay, lmc receives the boatFrom Bahia Mar to LMC.
Okay, lmc receives the boat,lmc activates their slip, then
(38:27):
receives the boat and they enterthem into their inventory.
They do the 214 to enter theminto the zone.
You can do that.
But one thing that tends tobecome a continued question is
the subrogation bond.
So a continued question is thesubrogation bond.
Once you write your subrogationbond between Bahiamar and the
(38:48):
boat owner, you cannot transferthat bond to.
Kristina Hebert (38:50):
LMC, so you would have to write a new bond.
You have to write a new bond.
Is that because they're twoseparate companies?
Yes, Okay so what about SafeHarbor?
This is my second question.
If Safe Harbor has a boat goingfrom LMC to Savannah, to
Rybovich and back, let's say LMCto Savannah to Rybovich and
back, let's say LMC to Rybovich,to Newport, to Savannah,
they're hitting the circuit Allthe same company.
(39:13):
Each of them have foreign tradezone slip.
Wouldn't it benefit them tohave foreign trade zone slips in
all of their facilities andtherefore they could transfer
boat to boat to boat?
They could keep the samesubrogation bond under your
example.
Michelle Terorotua (39:27):
That would be up to Safe Harbor to
determine if that is acceptableto them, because each facility
has its own legal name.
Kristina Hebert (39:36):
You're right, they do.
Michelle Terorotua (39:37):
So if you wrote a bond for LMC under LMC's
legal entity name, would SafeHarbor agree to use that same
bond in Savannah?
I'm going to say probably not.
You're right.
Because if the boat went rogue,as I call it, and they have to
claim that bond, Savannah can'tclaim for.
Kristina Hebert (39:58):
Lauderdale's bond Right.
Michelle Terorotua (39:59):
So that again, that would be a business
decision they would have to make, but I would think they would
want a new boat, but they couldcreate a network that these
boats could transfer fromforeign zone.
Kristina Hebert (40:11):
What did you call the term?
To go from one zone?
Michelle Terorotua (40:14):
Oh zone transfer.
Zone transfer.
Kristina Hebert (40:15):
They could do zone transfers throughout their
network.
Michelle Terorotua (40:19):
They absolutely could, yeah, could.
You would have to do a zonetransfer because, again, each
entity has its own legal nameand it's under a different FTZ
grantee basically.
So every area has their own FTZgrantee.
Kristina Hebert (40:35):
It would be a paperwork issue, but this boat
could stay and go through arefit, be for sale, go in and
out of these foreign trade zonesand visit multiple areas
throughout the country, as longas they were going.
Michelle Terorotua (40:49):
As long as a zone transfer and it's accepted
, they can remain for sale everytime they transfer.
Okay.
Kristina Hebert (40:58):
It's a very interesting concept, but I do
think it's one that more peopleshould learn about, and I do
like, and where I was going with.
The other point was, if youhave you.
You mentioned you had sevenfacilities and right now you
have 20 boats.
I guess where I was coming from, let's say, the Fort Lauderdale
boat show is coming up and youknow there's this many boats
over 16 million could be a nicenumber to say all of you that
(41:21):
are foreign flag.
You need to be in the foreigntrade zone, exactly, and do we
have enough slips in?
Advance of the show.
So then we need to get morecompanies involved in this
foreign trade zone deal.
Michelle Terorotua (41:31):
That is the issue, and one of the things I
say in my presentation that Igive to dealers and builders and
whatnot, is planning ahead.
I know, Concept Plan aheadbecause space is at a premium,
just before the boat show Startin August.
Yes, start in July, if you needto and reserve your space.
Don't wait until the lastminute, because that happens a
(41:53):
lot, and then I try to do mybest to help them.
Sure, and do you have space forthis boat, do you?
have space for that boat.
I handle the foreign trade zonefor Director Fort Pierce and we
sent some boats up therebecause they were huge boats and
(42:14):
they needed the space and theycould accommodate them.
So it's important again planahead.
Do not wait till the lastminute.
Kristina Hebert (42:20):
But we need to get more of them online here.
I would say so, okay, okay.
Michelle Terorotua (42:25):
Because during season season is
transient boats Right, you can'tturn those boats away because
that's business, that's moneyand some boats come back every
single year or have annualcontracts.
Kristina Hebert (42:36):
What's the activation?
I'm so sorry, I'm likebombarding you with all these
questions.
No, that's okay.
What's the activationdeactivation time?
Is that like a one week, or canthat be done same?
Michelle Terorotua (42:45):
day.
We do it through teams.
Kristina Hebert (42:47):
Now we do not have to wait, get out.
Michelle Terorotua (42:49):
Wow, no, we do not have to wait for customs
to come out anymore.
Okay, because sometimes it wouldtake two to three days Because
customs only has so many people.
The marinas would become upsetbecause they have an empty slip
and they're losing money everytime, every day that slip is
empty.
Upset because they have anempty slip and they're losing
money every time, every day thatslip is empty.
So we had a what do they callthem?
(43:09):
A workshop.
We had a workshop with ourgrantee, which is FTZ 241 again,
and CBP was there.
A lot of the FTZ operators werethere and one of the things
that was asked by the granteewas how can we streamline this
process?
How can we streamline thisprocess?
How can we make this better?
So I was sitting across fromSupervisor Harris at the time
(43:31):
and I'm like can we do like aZoom?
Call Sure and Crystal, who wasthe FGC person at FGC 241 at the
time.
She says, because she actuallymentioned it previously, is this
something we can do?
And he says, well, we can't doZoom, but we can do Teams.
(43:51):
So let's try it.
So we tried it and it worked.
And so what we do is the marinasends us photos of the empty
slip.
We send it to customs.
We say can we?
What time are you availabletoday or tomorrow to do a Teams
call, and then we schedule it.
We get on there on Teams,somebody runs out to the slip
with their laptop or their phoneand shows them here's the slip
(44:13):
empty, here's the signs Right,and they're like okay, and then
we get a letter like 30 minuteslater saying the slip's
deactivated.
Kristina Hebert (44:20):
So it's a really fast process.
Michelle Terorotua (44:22):
It's very fast.
It works very well.
We're very grateful to PortEverglades for being open.
Kristina Hebert (44:28):
Yeah, absolutely.
Yeah, so it really works quitewell.
So I also see another revenuestream could be an app that just
shows the slips, like goingaway because they're all getting
, you know, leased and theforeign trade zones are all are
all gone and then there aren'tany slips.
I I feel like, is there areason a marina wouldn't do it?
Is it just cost prohibitive?
Michelle Terorotua (44:49):
I think it depends, honestly.
It depends on the marina andtheir business model, and some
people find it very beneficial.
Others that do not have a lotof foreign trade zone boats
either it's a access issue donot find it as beneficial, okay.
Kristina Hebert (45:07):
But probably if they had a foreign trade zone
customer and they had it workone time, forever, it would do
it.
Is it mainly just a?
I don't want to give up a bigslip and make that, but it's not
activated until the boat's init.
Correct, Right, so we?
Michelle Terorotua (45:22):
activate it just before the boat goes in.
Say the boat's going to go intomorrow, okay, I can activate
the slip today with customs,obviously, if they're available.
Once the slip is activated, Igo ahead and do the entry, the
214 zone entry, send it to themarina and the boat can just
slide into their slip tomorrowand that's.
Kristina Hebert (45:40):
So it's not like they're having to give up
these slips or valuable realestate in hopes of attracting a
foreign trade zone vessel.
You only have to activate itwhen the best.
So it would benefit you to beprepared to have the software to
have all of that.
Well, when they're ready,they're going to go to Compass
Logistics and Marine Correct andthey're going to reach out to
Michelle and thank you.
(46:02):
Thank you for teaching all ofthis today, and I learned I had
no idea, and so if you own aboat over 16 and a half million,
you need to go into foreigntrade zone.
Don't do the boat show bond.
Start making your reservationsin August and the trip to DC is
next week and so that's wherewe'll.
We're going to have to do afollow-up to this, because I
(46:23):
learned a lot and it was such apleasure speaking with you.
Michelle Terorotua (46:26):
Well, thank you so much for having me.
I was quite nervous at first.
Kristina Hebert (46:28):
Oh, absolutely not, and you're going to be
great and I look forward tohearing all about your
presentation in.
Michelle Terorotua (46:33):
San Antonio?
Absolutely, I will be happy totell you about it.
Okay, thank you guys.
Thank you, thank you for beinghere.
Kristina Hebert (46:39):
Michelle, Thank you for joining us this season
on season three of the wardswaypodcast.
Be sure you subscribe becausethere's much more to come.
Welcome to the Season 3 Wards Way podcast,
where we're covering the hotlegislative topics of 2025.
From tariffs to tunnels andbridges, from foreign trade
zones to workers' compensation,to the Fort Lauderdale
International Boat Show, to theMarine Research Hub, industry
(00:22):
experts and clarification on theB1, b2 visas.
Join us as we celebrate 75years in business and we're just
getting started.
Welcome everybody to seasonthree, today's episode.
I'm with Michelle Tarortua andshe is the director of Marine
and Aviation with CouplesLogistics and Marine, and we are
(00:43):
here today to talk aboutforeign trade zones amongst many
of the new legislative issuesaffecting our marine industry.
So welcome, michelle, thank youfor being here.
Thank you for having meAbsolutely.
Michelle Terorotua (00:54):
I'm happy to be here.
Kristina Hebert (00:55):
So talk to us about a foreign trade zone and
what that means to this industry, and especially here in South
Florida.
Michelle Terorotua (01:02):
Well, in South Florida we have something
called a foreign trade zonemarina, which was a brand new
concept that started here maybeseven, eight years ago in South
Florida.
We were the first in the nationto actually activate and test
that program.
The program works quite well.
We have expanded those marinasfrom the first couple or handful
(01:27):
into, I think, here in FortLauderdale we have seven now.
There's one in Miami, one inPalm Beach, one in Fort Pierce
and there's some on the westcoast of the US and currently I
am working on activating some inGeorgia.
Currently I am working onactivating some in Georgia,
rhode Island.
Kristina Hebert (01:45):
Wow, yes.
So now, what makes these unique?
Because my understanding,obviously before being in this
industry, is that foreign tradezones were a port item.
It's something that really onlyoccurred into the ports.
What made South Florida have itgo beyond kind of those borders
, so to speak?
Michelle Terorotua (02:05):
Well, foreign trade zones
traditionally were located inports, but those ports allowed
you to expand outside the portparameters and do subzones or
usage-driven facilities.
There are quite a number offoreign trade zone warehouses
here in South Florida that areoutside of the ports is here in
South Florida that are outsideof the ports Okay.
So, and with the Foreign TradeZone marinas we are actually
(02:28):
usage-driven.
What is it?
Alternate framework from theFort Lauderdale Executive
Airport Okay, foreign Trade Zone241.
All right.
So here in Florida it is abenefit because we are the
yachting capital of the world.
Absolutely, we have yachts thatwant to come here for sale and
(02:51):
try paying the duty, or considerpaying the duty on a 20, 30, 40
and up million dollar yacht.
Just isn't really somethingmost people want to do.
So the foreign trade zonemarinas allow you to put your
yacht into that foreign tradezone without benefit of duty.
So it allows you to offer itfor sale to all residents, all
US residents, foreign entitiesas well, and it also allows you
(03:16):
to show the boat.
You can temporarily withdraw itto go into a boat show and
still offer the boat for saleunder the foreign trade zone.
It allows you to go on seatrials, go into a boat show,
okay, and still offer the boatfor sale under the foreign trade
zone.
It allows you to go on seatrials.
You can go into the yard andhave work done temporarily.
You can go to brokers, openhouses and still offer your boat
for sale, all while it's underforeign trade zone, okay and who
(03:39):
?
Kristina Hebert (03:39):
what are the?
Who else benefits from havingthis foreign trade zone?
So we talked about marinas, butthere are brick and mortar
buildings and businesses thatbenefit from it too.
Michelle Terorotua (03:48):
What are some other?
I would think that there aresome.
It also allows you to put yourforeign manufactured goods onto
the vessels without benefit ofduty.
If there are companies likeyourselves that do provide
services to these super yachts,you are still allowed to go on
(04:10):
board that vessel and do certainmaintenance on the vessels.
They can come out and go intoshipyards and get up to 120 days
and have work done there aswell, so your company may
provide a service to that vesselwhile it's in that shipyard.
So that does benefit companieswithin the marine industry that
do provide those services andthey can still provide that
(04:33):
service when the vessel is outtemporarily in a shipyard to
have some work done.
Kristina Hebert (04:38):
And that's an incentive for commerce for the
United States.
Because some people will saywell, why should we give rich
yacht owners a break, and ifthey're coming here it should be
imported to duty.
Michelle Terorotua (04:50):
But it's all of the economic impact it is,
it's the jobs it absolutely isand I think, if memory serves me
, your industry, the marineindustry, provides.
I think it's 138,000 jobs inthe Tri-County area.
Yeah, I think it's almost $2billion in revenue, if memory
serves me as well, to oureconomy $2 billion, consider
(05:11):
that Right, that is a lot ofmoney, so we want to incentivize
that as much as possible,absolutely.
Producer.
Kristina Hebert (05:16):
Jordan, can you fact check us on our?
She's going to go to the MarineIndustries Association.
I think they have that there.
They do and so on, the inaddition, the $2 billion or the
jobs Either one, Okay, see whichone.
And so the foreign trade zone.
So how does a company, if I'mlistening to this, and say I'd
(05:40):
really be interested in that Iobviously deal with a lot of
yachts that come in and howwould I be able to be a part of
the foreign trade zone?
Can I be it?
How does Wards become a part ofthe foreign trade zone?
Michelle Terorotua (05:52):
Yes, it's absolutely possible for you.
What we would do initially isarrange a site visit.
Kristina Hebert (05:57):
And your company could help me with that.
Michelle Terorotua (05:59):
Yes, we arrange that for you.
We act as a consultant betweenthe FGC, grantee and customs, so
we would arrange a preliminarysite visit for the viability of
the facility.
Customs would come out, they'lltell you if you need to add
cameras, if you need to add moresecurity.
(06:19):
They'll ask about yourinventory system, they'll ask
about staff and things of thatnature and then they'll say yes,
I think this will be a greatsite.
Please proceed with yourapplication.
At that point we would submitthe application to the grantee
first and then, once the granteeauthorizes or says yes, the FTZ
(06:43):
board concurs.
Then we submit the actualapplication to Customs and they
in turn start their process ofvalidating the information we've
provided to them and usuallywithin 30 to 60 days it can come
to fruition.
Okay.
Kristina Hebert (07:00):
And then, how long do these applications last,
if I get accepted?
Michelle Terorotua (07:04):
And then how long do these applications last
?
If I get accepted, you have asunset date, and it's usually
three years from the applicationor from the approval date, and
if you do not do any businesswithin that three years, then it
will sunset or close down.
If you continue to conductbusiness as an FTZ, then your
sunset date is extended.
Kristina Hebert (07:26):
Okay, and then how long does that status last?
So I'm approved, I'm authorized, I become a foreign trade zone.
What do you call it?
A foreign trade?
Michelle Terorotua (07:35):
zone business.
Kristina Hebert (07:36):
Yeah, so you're a usage driven foreign trade
zone facility, and so I wouldhow long does that?
Michelle Terorotua (07:41):
status last.
That lasts as long as you're ingood standing and you pay your
annual fees to the grantee andpay for your bond.
Kristina Hebert (07:49):
There's enough incentive that it's not like.
This is something that's goingto last a year or two.
And some people have to investin maybe their computer software
, you're saying, or cameras.
Michelle Terorotua (07:58):
It is an investment and it's in your best
interest to make sure that youcomply with all the regulations
and that you don't get in thecrosshairs of customs.
Absolutely not, because they'rethe ones that can prevent you
from continuing on as a foreigntrade zone.
Kristina Hebert (08:13):
But it is nice to know that once you do invest
in it and you develop this andit's working for your business,
that it can continue as long asit's a successful venture and
you're compliant Exactly.
Excellent.
Compliant is the big part of itNow you're planning to go to
Washington too to talk about FTZand meet with an FTZ board?
Tell me about that.
Michelle Terorotua (08:33):
Yes, I am.
So I'll be joining the MIASFMarine Industries Association of
South Florida in DC again thisyear, so it's a privilege to be
asked to go.
Kristina Hebert (08:45):
So I'm really quite honored to be going.
Yes, it is.
Michelle Teroro (08:47):
Congratulations and we will be meeting with
Coast Guard specifically withemissions compliance issues for
the large engines on these bigyachts.
We meet with Customs, we meet.
Who are we meeting with?
We will be meeting with FTZ.
We're going to be meeting withthe USDA PPQ people as well for
(09:07):
the new Lacey Act that wasimplemented that affects yacht
importations as of December oflast year.
Kristina Hebert (09:14):
Do you want to talk about that?
Do any of these things?
You want to go into detail?
You're welcome to.
I do have your numbers, oh okay, producer, what do we have so?
Speaker 3 (09:23):
for our region we have 149,000 jobs in our region,
but specifically in Broward wehave 121,000.
Kristina Hebert (09:31):
So of the 149,000 in the tri-county area,
Broward is 121.
Speaker 3 (09:42):
And then Florida generated $24.6 billion in
output but specifically $9.7billion of that came out of
Broward.
Wow, okay, yeah, so the numbersare even more impactful.
Thank you, this was an MISFreport okay specifically.
Kristina Hebert (09:55):
Thank you, thank you yeah, so it is uh so
the economic impact is ismassive, massive for sure it.
Michelle Terorotua (10:01):
You know, you.
I don't know how you can be inthis county and not realize what
runs this county or runs SouthFlorida.
The economic impact is immense.
Kristina Hebert (10:13):
Well, you know you mentioned the Marine
Industries Association of SouthFlorida and I know I've gone on
a couple of these tours and I'msure you have too where they do
a great job of taking out city,commission and county
commissioners and notnecessarily those city
commissioners that are in thecity of Fort Lauderdale because
they have access and know theirlovely city, but sometimes just
(10:35):
a neighboring city or aneighboring county and being
able to go.
And I witness every time on awater taxi tour that they say
you know, I've driven down 95and I just never noticed this
marina or I never noticed thatfacility, and so once you open
people's eyes to it, people aredefinitely very aware and very
(10:55):
supportive of our industry.
So I do give kudos to MISF forthat.
So you're going to.
Washington you're talking about.
You said you're meeting withthe Foreign Trade Zone Board.
Yes, is that just to kind ofhere's how the program's going?
Yes, this is the okay.
Michelle Terorotua (11:09):
That's exactly it Just to reiterate how
successful this program is andthere is really a fraction of a
percentage of issues that mightarise.
You know, with anything you'regoing to have an issue.
Kristina Hebert (11:22):
Of course.
Michelle Terorotua (11:23):
But it's so minute that it really is not
impactful on the program.
Overall, it's a great programand that's why it's being for
lack of a better word it's whyit's being copied in other
states and other parts of thecountry.
Kristina Hebert (11:38):
Isn't they say, the greatest form of flattery
is imitation Exactly.
Michelle Terorotua (11:42):
Exactly so, it is a great program.
Is imitation?
Exactly exactly so, it is agreat program.
I thoroughly enjoy the program.
You know being administrating,I should say the marinas that I
do, you know.
I make sure they're on theirtoes, we're all on our toes.
I do quarterly reviews, youknow, continuing education to
(12:03):
make sure any changes that comedown from headquarters that
we're all aware of them and thatthe vessels for the really the
vessels are complying with thoseregulations as well and that
they are fully aware of whatthey're, what they can and can't
.
Do we call it the no fun zone?
To be honest with you, can't dowe call it the no fun zone to
(12:28):
be honest with you that was aphrase that came from Megan
Lagasse at Pier 66.
The no fun zone, because reallyyou have no leisurely use of
your vessel.
The purpose is to offer yourvessel for sale honestly and no
owners can come on board andhave lunch or bring their
friends for a party.
You can't go out of the slipand go down to Miami for dinner
and then come back.
That's just not things that youcan do.
(12:48):
But you can sell your boat andthat's the most important thing.
Kristina Hebert (12:52):
Well, and I do think you know I mean we talk
about this all the time in ourindustry and where we confuse
the lifestyle with having anindustry.
And so when we think of boatingand we think of yachting and we
think of boat shows, and we dowant to think about the fun,
because it's on the water andthere's no greater experience.
But at the end this is aboutbusiness and it's about.
(13:14):
It is about I'm trying to thinkof the proper verbiage, but
it's really making sure thatbusiness transactions and
commerce can trade hands withinthe laws of the United States,
but also giving incentives tosay you don't have to pay 1.5%,
or now, what would the 10%tariff?
Do you want to comment on that?
What would that be now?
Michelle Terorotua (13:36):
So the 10% tariff is the universal tariff
and honestly I don't see a timein the very near future that
that is going to go away.
I think it's something we haveto learn to live with for the
time being.
So if you have, you know, let'sjust say you have a $20 million
yacht, 11.5% duty is quitesubstantial and you may not
(13:59):
actually end up selling yourboat.
So when you do put it in theforeign trade zone, you can
offer it for sale, you can putit in a boat show and if you
don't sell it you haven't lostthat 11.5%.
You export your boat back out,pop over to Bimini, close out
the FTZ bond and the entry andthen you can use your boat and
(14:19):
have as much fun as you wantwith it.
Kristina Hebert (14:22):
That's right.
You're outside of the foreigntrade zone, so the fun zone
begins.
Yes, exactly, so fun zone doesnot equal foreign trade zone.
Michelle Terorotua (14:29):
No, it does not.
Sadly it does not, but again,the purpose is to be able to
offer you both.
Kristina Hebert (14:34):
Sure is for business, and so what are the
other topics?
So you mentioned the Lacey Act,which I know that in and of
itself can be a big topic, butdo you want to cover that?
Yeah, I can very briefly touchon that.
Michelle Terorotua (14:46):
So the Lacey Act is part of the USDA program
, the PPQ Plant Protection inQuarantine Okay, thank you.
It has phases that have evolved, I think, since I'm going to
say 2008.
I could be wrong, and one ofthe last phases was, I believe,
december 4th of 2024, where theystarted paying attention to the
(15:10):
wood and wood products inyachts.
So what that means is you needto provide on this LACI form,
ppq, form 505, the genus, thespecies, the country of harvest,
the cubic meters and the valueof that component.
(15:30):
Okay, so is there wood in theshaping of the hull before you
put your composite on it?
Okay, is there wood cabinets?
Is there wood bases to yourchairs or your tables, or is
there wood paneling on the wallswithin the boat?
Those are all the things theywant to know about.
(15:51):
But those are all answers tothose questions are, yes, there
is, but you got to know that thebuilder has to provide you with
all of the pertinentinformation for that document,
which again is genus, species,country of harvest.
One of the things they look atvery closely is teak,
specifically Myanmar or Burmesewhichever term you want to use
(16:17):
which is illegal.
You can't have that on yourboat, you can't import it.
So that is one thing thatthey're looking closely at again
is teak products so theresponsibility is falling onto
the builder.
Kristina Hebert (16:31):
It is, what about the suppliers of of the
teak I?
I can imagine a builder sayingI've I've had the same teak
supplier for for 10 years.
Bob comes by, bob didn't tellme I had a new form.
Am I supposed to have a newform?
But the builder bears theresponsibility which they should
know the goods going in tobuild their product Well exactly
(16:54):
.
Michelle Terorotua (16:54):
They have to know where their supplier is
sourcing the goods, and actually, I believe, in Europe.
This has been in effect since2013.
So they've had more time itshouldn't be new news for them,
but they still balked at it.
A lot of them balked.
They pushed back really hard onit, but I think we currently
have pretty much everybodyaligned.
There is always going to be ananomaly, but the most difficult
(17:16):
part of the LASI act is the usedboats.
Sure, buying a used boat.
Kristina Hebert (17:21):
Where's the history of that?
What if the builder is notaround?
Michelle Terorotua (17:24):
Right, exactly.
So if it was built after, Inever thought about that.
Yeah, yeah.
So if it was built afterDecember 31st 2007, it is
required to have lease the actinformation.
Prior to that, you are exempted.
Okay, so that is the issue withused boats.
A lot of this is often thesecond and third buyer.
(17:45):
Sure, where are they going toget that information?
So if we know who the builderis and we have some sort of
history or rapport with them, wewill reach out to them and say,
hey, could you possibly provideus with whatever information
you can for this?
You know 2011 project.
You know lagoon 42, whatever itmay.
Be sure, um, sometimes we're,you know we're able to get
(18:08):
information.
Sometimes we're not, but whatum usda ppq has said is to do it
to the best of your ability, doas much research as you can and
prove that you've done yourresearch.
Okay, enter into there what youknow or what you're able to
obtain.
And basically, that is duringour call with them.
(18:30):
We had a Zoom call with themseveral months back.
That was their advice toeverybody Do the best you can,
do your research and prove thatyou've done your research and
present whatever information youcan to the best of your ability
.
Kristina Hebert (18:41):
When there's a violation, what's the
consequence?
Michelle Terorotua (18:45):
Well, it's a monetary violation.
Kristina Hebert (18:50):
Percentage of price of vessel of vessel?
Michelle Terorotua (18:52):
yeah, most likely a percentage.
Um, I personally do not recallif there was a specific monetary
amount said to it, but that'sone of the things I can ask when
I'm in dc next exactly.
Kristina Hebert (19:04):
And then, um, you know, yeah, let's say we go
back to prior 2007,.
Were people reporting thespecies and any of that?
So, even if you do have arelationship, was that being
reported?
Michelle Terorotua (19:17):
No, so it's really hard to come by.
None of it was being reported.
September of last year is whenthe notice came out that the
final part of this phase wasgoing to be implemented on
December 4th.
So I sent an email out to quitea few people.
Patients from MIASF was one ofthem.
I sent it out to all of thebuilders I deal with in Europe
(19:40):
that I import for them, so Itried to give everybody as much
of a heads up as I possiblycould.
Some people didn't really takeit seriously, unfortunately, but
I think we're in a good placenow.
Okay good.
I think we're in a good placefor the majority of what we're
working on.
Kristina Hebert (19:59):
And it's just probably getting it out to the
builders and making sure they'reaware.
And then, on the used boatmarket, is this something that a
Marine Max has to go lookingthrough all of their inventory
and say they may well?
Michelle Terorotua (20:12):
Okay, they may well, I do some work for a
couple of lenders as well, andwe've run into the issue where I
simply cannot import the boat,so they can't finance the boat.
I can't import the boat becauseI cannot get the lacy
information interesting yeahbecause we have to have that
(20:32):
documentation too as brokers,whereas we don't have to upload
it with our entry like we do theepa portion.
Okay, customs, we have to haveit in our hand, we must have it
in our file and we have to sendit to usda.
Interesting.
So if I cannot get thatinformation, I have
unfortunately had to tell peopleI cannot import your boat.
Kristina Hebert (20:52):
Is that something that you're going to
talk to them about?
That that maybe is there.
If the information's notavailable, and now we're harming
that commerce that we're tryingto.
Is there a fix in there?
I'm not sure that there's a fix.
Michelle Terorotua (21:05):
We did.
There was a question.
We sent out our questions orour concerns to them.
Kristina Hebert (21:13):
Like a comment period.
Michelle Terorotua (21:14):
Yes, okay, so we're hoping that when we're
in DC this next week thatpossibly they may have some
responses for us.
Kristina Hebert (21:22):
Okay, and what was one of the other topics?
So you, you talked, you met,you mentioned meeting with CBP
and I know that.
Um, I sat with you at the lastCBP meeting, um, looking for
some clarification.
I don't know if you want totalk about that.
We, we are hopefully having CBPas a special guest on season
three, um, but we're goingthrough the um, we're going
(21:44):
through the uh vetting process,so to speak.
Michelle Terorotua (21:46):
And.
Kristina Hebert (21:46):
I get it.
They want to make sure thatwe're a, especially after what
happened.
They want to make sure that I'mnot this rogue media person
that's going to try to.
I don't know if that's whatthey're trying to do, but I do
think that they need to makesure we're credible, we're
presenting them with thequestions, and that my goal and
I let them know that my goal wasto create a session that I
(22:09):
could send out to captains, Ican send out to you, that you
could say here's a one-on-one umwith CBP on a podcast.
It lives in YouTube forever.
Here's the do's, here's thedon'ts.
This is what we said, this iswhat we didn't say, not on a big
panel, but but but.
Cbp was very helpful inoffering a clarification on
something that was they were.
Michelle Terorotua (22:31):
If you want to go into that please,
Immigration isn't really mypurview but, I, do get asked a
lot of questions about it andafter what happened in Palm
Beach it was really good to seethat CBP was willing to sit down
at the table with us and answerour questions.
(22:51):
They were so very receptivehere in Fort Lauderdale and they
did have some people come upfrom Miami and they had
headquarters on with us.
Yes, so they could hear ourconcerns and possibly come up
with some solutions.
And I think at the end of thatday we did come up with some
answers and some solutions andsome solutions.
And I think at the end of thatday we did come up with some
answers and some solutions.
Kristina Hebert (23:10):
And some clarification.
Michelle Terorotua (23:12):
Yes, and there were some others that
headquarters was going to checkfurther into, so hopefully we
will have, and they issued astatement.
Kristina Hebert (23:20):
They did issue a statement Clarifying, which is
like putting it in writing yes,so just to give the listeners,
listeners or the viewers forthose of you on youtube uh,
wardsway, by the way um they.
There was a panel that was doneduring the um palm beach boat
show.
Various questions were askedand cbp is very good about doing
these um community outreachpanels at boat shows that they
(23:44):
know they're going to have avery specific audience of
captains, crew, yacht managementcompanies such as yourself that
really know, you know, kind ofknow the industry and have very
specific stick your hand in thewhat-if bag.
A question was asked.
A person answered it.
It had a little bit ofvagueness to it and it sent the
doc rumors spiraling but we wereable to through the
(24:06):
relationships I'll give MarineIndustries Association of South
Florida and yourself for havingthose relationships with CBP.
They had a meeting.
There must have been 25 peopleat this table.
We ran out of chairs.
There were lawyers, there wasmedia I was there the lobbyists
were there and they couldn'thave been more hospitable, more
(24:28):
open communication, like yousaid, than the person from
Washington.
And then, ultimately, we said,hey, could you issue a
clarification letter?
And I think some people thought, well, I don't know if they're
going to do that.
And they did.
And so I really just wanted togive a shout out to them that I
do feel like there's been a lotof reciprocity in the
communication and workingtogether.
(24:48):
I think they trust us as anindustry.
Oh, I think so.
I think that we've proven to beyes.
Michelle Terorotua (24:54):
Through the Marine Industries Association of
South Florida.
They are such an advocate forthe industry as a whole, agreed,
and they have a very goodrelationship with CBP Fort
Lauderdale, miami, palm Beach,as well as the Coast Guard, and
(25:14):
I think that through them,through them being like the
intermediary, has been a greatbenefit for us and I think,
through them, arranging thismeeting was most beneficial.
But I think, through them again, that we're going to see a lot
more clarification because ofthat relationship and because it
(25:37):
is a very good relationship andI think it's really important.
I mean my entire career, whichis 38 years long, my
relationship with customs is oneof the most important
relationships I can have.
And knowing who your portdirector is, knowing who the
chief and the soup are of tradeand knowing who's in charge of
(25:57):
immigration, and having theseconversations and reaching out
to them and them being receptiveBecause there was a time here
in Port Everglades where we didnot have that.
It went from a good receptiverelationship to a quite I don't
want to say toxic, but I did saythat and a bit of a
(26:18):
antagonistic relationship for avery brief period because of
specific individuals.
But we have really moved pastthat.
Kristina Hebert (26:28):
Good.
Michelle Terorotua (26:29):
We have a great relationship with customs.
Again, they're very receptivehere in Port Everglades, same in
Miami.
I don't deal too too much withPalm Beach, just on occasion and
I can't say I've had any issuesthere.
But those relationships arevery important.
It's not just in the yachting,it's in in general, because we
(26:49):
don't do just yachts, sure, I doairplanes.
I was gonna say, we do allgeneral commodities, we do
everything.
So having that a goodrelationship is very important.
Kristina Hebert (26:59):
And South Florida is very unique too.
I think that as far as a region, even the officers that were
sitting at the table that dayand even the people up in DC,
they recognize that variousregions of the country are very
different and that we are verydriven.
We push CBP to the limits asfar as our planes, our yachts
(27:23):
and the amount of goods comingand going, and so I think it is
helpful to have that nicerelationship, but also that they
can rely on us, and we've hadto make corrective measures in
our industry as well.
We have sent out clarificationto captains and crew of the do's
and don'ts.
Don't do this, be prepared,have your information.
I can't tell you and, speakingwith one of your colleagues
(27:45):
earlier today, people have ontheir websites just different
checklists and recommendationsfor crew to work together to be
in compliance with CBP.
So I think they sense that, andso we have the Lacey Act, we
have CBP, we have the foreigntrade zone.
What else was on here?
Michelle Terorotua (28:04):
That's quite the legislative agenda.
Coast Guard for EPA, for EPAOkay, yes.
One thing I did want to touchon, though what else was on your
?
That's quite the legislativeagenda.
Coast Guard for EPA compliance,okay, yes.
So one thing I did want totouch on, though, and it has to
do with the need for foreigntrade zone, is boat show bonds,
oh please.
Kristina Hebert (28:19):
Yes, that's a big one, so start from the
beginning on that one for sure.
Michelle Terorotua (28:23):
So boat show bonds started many years ago
with Steel Reader and I'm notsure who else was in that with
him, some attorneys to get a wayfor boats to be shown in a boat
show without having to pay theduty.
Why do I pay the duty to put myboat in a boat show that I
might not sell and then I'mgoing to leave again.
(28:44):
So the Boat Show Bond allowedyou to come in, put your boat in
a boat show without paying theduty.
But to do that you had to posta bond and the bond was for two
times the possible duty of theboat and it was a six month term
.
It would cover you all the wayfrom Flibbs to Miami to Palm
Beach and then you leave you.
If you don't sell the boatwithin that time frame and
(29:05):
import the boat and pay the duty, you would need to depart
within that six month time frameand time out from there.
Kristina Hebert (29:11):
And if people have gone through a boat show
and seen the sign that says notfor sale to in us waters, to us,
is that what that's about?
No, oh, so tell me about that,completely separate okay, okay,
yes.
Michelle Terorotua (29:26):
So with the boat show bond, the reason I
mention it is, and how FTZs tieinto it is the more expensive
your boat gets, the moredifficult it is to get a boat
show bond.
So once the duty reaches$500,000, so two times the duty
once you get to that $500,000threshold we cannot just write
(29:49):
that bond.
We have to have a dossier onthe beneficial owner.
Oftentimes they want financialsand, as we know, the only asset
of the owning entity is thevessel and it is a money pit.
There's no financials, there'sno money being made, unless you
have a big charter operationpossibly.
So once you reach that $500,000threshold you need to go FTZ.
(30:17):
Okay, because we can write theFTZ $500,000.
So every boat that goes into anFTZ has to have a subrogation
bond between them and the FTZmarina.
We can write, and the maximumamount of bond that we can write
is up to whatever the FTZ'sbond is.
So most FTZ marinas carry a$500,000 bond.
(30:38):
So we can write a $500,000 bondevery day of the week, without
financials, without knowing whothe beneficial owner is.
We do have to have anapplication that has to be
submitted to the surety withcertain information and up to
(30:58):
$500,000, we can write them allday, every day, gotcha.
So an FTZ is very beneficial,especially when it comes to the
value of the boat.
If you have a $100 million boat, ftz is where you're going to
go.
You will never well, let me notsay never, but I would say
there's a greater chance thatyou will not get a boat show
(31:20):
bond written.
Kristina Hebert (31:22):
So you need to go FTZ.
So in doing the math, do youknow what that value of the boat
is?
To get to the 500?
Well, now it's a much lowervalued boat because you're
paying 11.5%.
Michelle Terorotua (31:34):
It's $16.5 million.
Okay, you write a $495,000 bond.
So really, once you reach the$16.5 million threshold, a boat
show bond is not for you.
Once you get over that, it'snot for you because that's a
$495,000 bond.
So you need to go FTZ to makeit easier on yourselves but also
(31:59):
cost-wise, the cost is notexorbitant to do the subrogation
bond for a foreign trade zone.
Kristina Hebert (32:05):
So how do we get that message out?
Michelle Terorotua (32:15):
Well, I actually give presentations to
yacht brokers and dealers.
I've done it numerous times andI explain the difference
between a boat show bond andforeign trade zone and the
difference between a TIB, whichis temporary import under bond.
So I give those presentationspretty regularly.
Kristina Hebert (32:27):
Okay so.
Michelle Terorotua (32:28):
I'm trying to get the word out there, okay,
as much as I possibly can.
Kristina Hebert (32:31):
Is that?
Michelle Terorotua (32:32):
on your website.
It should be on our website.
And your website isCompassLogisticsMarinecom.
Kristina Hebert (32:38):
Okay, compasslogisticsmarinecom, and
then you will have that andyou'll explain out the three
different bonds.
Michelle Terorotua (32:43):
Yes, Okay, I have a PowerPoint presentation
on that.
Explain out the three differentbonds.
Yes, okay, I have a PowerPointpresentation on that.
And actually in June I amspeaking at the Southeastern
Admiralty Law Seminar, seals,sealy it's called Okay, their
annual maritime law convention,I guess it is so I've been asked
(33:06):
to speak at that.
It's in san antonio in june, soI will be giving that
presentation at that um event.
Um, so it's supposed to beabout 400 maritime attorneys,
which is a bit daunting for me Iam not a public speaker, so
we'll see how well this actuallygoes.
Kristina Hebert (33:23):
Great, though, you're speaking to well more
than 400 people now, so you'redoing a great job.
Michelle Terorotua (33:29):
So I'm really excited about that.
That will be my biggestpresentation yet.
Usually it's well.
I think the most I've done asfar as broker-dealers has been
165 people, but on Zoom, fromaround the world, a company that
has international offices aswell.
But again, I do it on a regularbasis.
(33:50):
I'm trying to get the word outthere.
I'm trying to make my lifeeasier.
The more people that know, theeasier it is for me.
Kristina Hebert (33:57):
So I have a question, and you strike me as
the person who's going to havethis answer Do you know how many
foreign trade zone slips thereare?
Michelle Terorotua (34:06):
locally.
Well, the marina, how do I saythis?
So the marina is um a foreigntrade zone, but only the slips
that we activate.
Kristina Hebert (34:17):
Correct are okay, trade zones, so you have
seven marinas activated, whichis how many slips do you know?
Michelle Terorotua (34:24):
um how many slips they have in total.
No, I'm so sorry.
I sorry, I don't know how manyslips.
Kristina Hebert (34:27):
That's okay.
I didn't ask you ahead of time.
We didn't rehearse this.
This is just us.
Michelle Terorotua (34:31):
I don't know how many slips are at each
marina?
Well, because I'm thinkingCurrently I probably have.
I'm going to guess that I haveabout 20 FTZ boats and slips
right now is my best guess.
Kristina Hebert (34:42):
But let's say you have seven marinas, would it
be a high number to say 10slips per?
Michelle Terorotua (34:48):
marina.
Oh no, they can have everysingle slip in that marina.
Be FTZ they could, but do youknow?
Kristina Hebert (34:53):
that but like, for example, I know in going to
local marinas, you see the slipsare very clearly marked FTZ.
Michelle Terorotua (35:01):
Yes, that means that slip is already
activated and there's a boat init.
Okay, even if there's not aboat in it it's still activated
yes, that means that the boat istemporarily out for sea trial,
yard work, brokers, open houseor a boat show.
But as long as that sign isthere, that okay, okay, so wait
a minute, so maybe I've had thiswrong.
Kristina Hebert (35:19):
I thought I'm marina, a um and I am um.
I'm gonna tell you up front Iwant to activate 10 slips.
Or can I activate 10 slips andsay, oh Michelle, I had three
more boats come in and they wantto do this.
Can I activate three more?
Can they do that at any point?
Or do they have to do it kindof up front these are activated,
(35:42):
these are not.
Michelle Terorotua (35:42):
They can do that if they want to, but based
on most marinas' business model,they don't do that because an
empty slip is money down thedrain Right.
So they do not activate a slipuntil they know they have a boat
that needs to go in it.
So once that boat signs thecontract, and then I go ahead
and I activate that slip andthen I proceed to put the boat
(36:05):
into the FTZ and post the bondfor it.
Okay, so again, and then oncethe boat leaves, it departs
permanently from the FTZ, wedeactivate that slip, because
once that slip is activated youcannot put another boat in it,
even if the boat that issupposed to be in.
Kristina Hebert (36:21):
That slip is out of it.
It was going to be that it'sactivated per boat.
Per boat.
It's not a slip that'sactivated.
It's activated per boat, butthen the slip becomes
deactivated when the boat leavespermanently.
Michelle Terorotua (36:34):
So the slip gets activated.
A boat goes into it.
Okay, all right.
And one of the conversationsI've been having today with
somebody is they want to go upthe coast, let's say, and into a
yard to have some work done.
Yep, so that's a temporarywithdrawal.
I have to request that.
You have to tell me whereyou're going, how long you're
going to be there and whatyou're having done.
Okay, and then I request thetemporary withdrawal for you to
(36:55):
go up there, and if you want tosee trial while you're up there,
I'll put that in my request.
But once you're done up there,you have to come back to your
slip and go back into it beforeyou can depart the US
permanently.
So that's one of the issuesthat we talk about most often
with people is that you cannotdepart from the marina or the
(37:19):
shipyard that you're temporarilyat.
You have to come back to yourFTZ slip, gotcha, and then I
will request again, requestagain from custom for permission
to leave.
But while that boat is out ofthe slip up up the coast in a
shipyard getting some work done,that slip belongs to that boat.
They have to continue to payfor it, even though they're not
sitting in it because the Marinacannot put another boat in
(37:41):
there.
Gotcha yeah.
Kristina Hebert (37:43):
Now I have a question.
I had my fingers over herebecause I have two things that I
want to ask One would itbenefit?
A and I don't know if I'mgiving away trade secrets and
you don't have to answer, or youcan say yes or no.
Would it benefit?
Let me go back to my previousquestion.
Can you go from forward tradezone to forward trade zone?
Michelle Terorotua (38:03):
You can.
You can do a zone transfer.
Kristina Hebert (38:06):
Okay.
Michelle Terorotua (38:07):
So say, you have somebody sitting at Bahia
Mar and they want to go to LMC.
Okay, so two differentcompanies, two different foreign
trade zones.
Yep.
So the receiving foreign tradezone has to do the transfer so
that boat can transfer fromBahia Mar to LMC.
Okay, lmc receives the boatFrom Bahia Mar to LMC.
Okay, lmc receives the boat,lmc activates their slip, then
(38:27):
receives the boat and they enterthem into their inventory.
They do the 214 to enter theminto the zone.
You can do that.
But one thing that tends tobecome a continued question is
the subrogation bond.
So a continued question is thesubrogation bond.
Once you write your subrogationbond between Bahiamar and the
(38:48):
boat owner, you cannot transferthat bond to.
Kristina Hebert (38:50):
LMC, so you would have to write a new bond.
You have to write a new bond.
Is that because they're twoseparate companies?
Yes, Okay so what about SafeHarbor?
This is my second question.
If Safe Harbor has a boat goingfrom LMC to Savannah, to
Rybovich and back, let's say LMCto Savannah to Rybovich and
back, let's say LMC to Rybovich,to Newport, to Savannah,
they're hitting the circuit Allthe same company.
(39:13):
Each of them have foreign tradezone slip.
Wouldn't it benefit them tohave foreign trade zone slips in
all of their facilities andtherefore they could transfer
boat to boat to boat?
They could keep the samesubrogation bond under your
example.
Michelle Terorotua (39:27):
That would be up to Safe Harbor to
determine if that is acceptableto them, because each facility
has its own legal name.
Kristina Hebert (39:36):
You're right, they do.
Michelle Terorotua (39:37):
So if you wrote a bond for LMC under LMC's
legal entity name, would SafeHarbor agree to use that same
bond in Savannah?
I'm going to say probably not.
You're right.
Because if the boat went rogue,as I call it, and they have to
claim that bond, Savannah can'tclaim for.
Kristina Hebert (39:58):
Lauderdale's bond Right.
Michelle Terorotua (39:59):
So that again, that would be a business
decision they would have to make, but I would think they would
want a new boat, but they couldcreate a network that these
boats could transfer fromforeign zone.
Kristina Hebert (40:11):
What did you call the term?
To go from one zone?
Michelle Terorotua (40:14):
Oh zone transfer.
Zone transfer.
Kristina Hebert (40:15):
They could do zone transfers throughout their
network.
Michelle Terorotua (40:19):
They absolutely could, yeah, could.
You would have to do a zonetransfer because, again, each
entity has its own legal nameand it's under a different FTZ
grantee basically.
So every area has their own FTZgrantee.
Kristina Hebert (40:35):
It would be a paperwork issue, but this boat
could stay and go through arefit, be for sale, go in and
out of these foreign trade zonesand visit multiple areas
throughout the country, as longas they were going.
Michelle Terorotua (40:49):
As long as a zone transfer and it's accepted
, they can remain for sale everytime they transfer.
Okay.
Kristina Hebert (40:58):
It's a very interesting concept, but I do
think it's one that more peopleshould learn about, and I do
like, and where I was going with.
The other point was, if youhave you.
You mentioned you had sevenfacilities and right now you
have 20 boats.
I guess where I was coming from, let's say, the Fort Lauderdale
boat show is coming up and youknow there's this many boats
over 16 million could be a nicenumber to say all of you that
(41:21):
are foreign flag.
You need to be in the foreigntrade zone, exactly, and do we
have enough slips in?
Advance of the show.
So then we need to get morecompanies involved in this
foreign trade zone deal.
Michelle Terorotua (41:31):
That is the issue, and one of the things I
say in my presentation that Igive to dealers and builders and
whatnot, is planning ahead.
I know, Concept Plan aheadbecause space is at a premium,
just before the boat show Startin August.
Yes, start in July, if you needto and reserve your space.
Don't wait until the lastminute, because that happens a
(41:53):
lot, and then I try to do mybest to help them.
Sure, and do you have space forthis boat, do you?
have space for that boat.
I handle the foreign trade zonefor Director Fort Pierce and we
sent some boats up therebecause they were huge boats and
(42:14):
they needed the space and theycould accommodate them.
So it's important again planahead.
Do not wait till the lastminute.
Kristina Hebert (42:20):
But we need to get more of them online here.
I would say so, okay, okay.
Michelle Terorotua (42:25):
Because during season season is
transient boats Right, you can'tturn those boats away because
that's business, that's moneyand some boats come back every
single year or have annualcontracts.
Kristina Hebert (42:36):
What's the activation?
I'm so sorry, I'm likebombarding you with all these
questions.
No, that's okay.
What's the activationdeactivation time?
Is that like a one week, or canthat be done same?
Michelle Terorotua (42:45):
day.
We do it through teams.
Kristina Hebert (42:47):
Now we do not have to wait, get out.
Michelle Terorotua (42:49):
Wow, no, we do not have to wait for customs
to come out anymore.
Okay, because sometimes it wouldtake two to three days Because
customs only has so many people.
The marinas would become upsetbecause they have an empty slip
and they're losing money everytime, every day that slip is
empty.
Upset because they have anempty slip and they're losing
money every time, every day thatslip is empty.
So we had a what do they callthem?
(43:09):
A workshop.
We had a workshop with ourgrantee, which is FTZ 241 again,
and CBP was there.
A lot of the FTZ operators werethere and one of the things
that was asked by the granteewas how can we streamline this
process?
How can we streamline thisprocess?
How can we make this better?
So I was sitting across fromSupervisor Harris at the time
(43:31):
and I'm like can we do like aZoom?
Call Sure and Crystal, who wasthe FGC person at FGC 241 at the
time.
She says, because she actuallymentioned it previously, is this
something we can do?
And he says, well, we can't doZoom, but we can do Teams.
(43:51):
So let's try it.
So we tried it and it worked.
And so what we do is the marinasends us photos of the empty
slip.
We send it to customs.
We say can we?
What time are you availabletoday or tomorrow to do a Teams
call, and then we schedule it.
We get on there on Teams,somebody runs out to the slip
with their laptop or their phoneand shows them here's the slip
(44:13):
empty, here's the signs Right,and they're like okay, and then
we get a letter like 30 minuteslater saying the slip's
deactivated.
Kristina Hebert (44:20):
So it's a really fast process.
Michelle Terorotua (44:22):
It's very fast.
It works very well.
We're very grateful to PortEverglades for being open.
Kristina Hebert (44:28):
Yeah, absolutely.
Yeah, so it really works quitewell.
So I also see another revenuestream could be an app that just
shows the slips, like goingaway because they're all getting
, you know, leased and theforeign trade zones are all are
all gone and then there aren'tany slips.
I I feel like, is there areason a marina wouldn't do it?
Is it just cost prohibitive?
Michelle Terorotua (44:49):
I think it depends, honestly.
It depends on the marina andtheir business model, and some
people find it very beneficial.
Others that do not have a lotof foreign trade zone boats
either it's a access issue donot find it as beneficial, okay.
Kristina Hebert (45:07):
But probably if they had a foreign trade zone
customer and they had it workone time, forever, it would do
it.
Is it mainly just a?
I don't want to give up a bigslip and make that, but it's not
activated until the boat's init.
Correct, Right, so we?
Michelle Terorotua (45:22):
activate it just before the boat goes in.
Say the boat's going to go intomorrow, okay, I can activate
the slip today with customs,obviously, if they're available.
Once the slip is activated, Igo ahead and do the entry, the
214 zone entry, send it to themarina and the boat can just
slide into their slip tomorrowand that's.
Kristina Hebert (45:40):
So it's not like they're having to give up
these slips or valuable realestate in hopes of attracting a
foreign trade zone vessel.
You only have to activate itwhen the best.
So it would benefit you to beprepared to have the software to
have all of that.
Well, when they're ready,they're going to go to Compass
Logistics and Marine Correct andthey're going to reach out to
Michelle and thank you.
(46:02):
Thank you for teaching all ofthis today, and I learned I had
no idea, and so if you own aboat over 16 and a half million,
you need to go into foreigntrade zone.
Don't do the boat show bond.
Start making your reservationsin August and the trip to DC is
next week and so that's wherewe'll.
We're going to have to do afollow-up to this, because I
(46:23):
learned a lot and it was such apleasure speaking with you.
Michelle Terorotua (46:26):
Well, thank you so much for having me.
I was quite nervous at first.
Kristina Hebert (46:28):
Oh, absolutely not, and you're going to be
great and I look forward tohearing all about your
presentation in.
Michelle Terorotua (46:33):
San Antonio?
Absolutely, I will be happy totell you about it.
Okay, thank you guys.
Thank you, thank you for beinghere.
Kristina Hebert (46:39):
Michelle, Thank you for joining us this season
on season three of the wardswaypodcast.
Be sure you subscribe becausethere's much more to come.
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.