What are Foreign Trade Zones?
Foreign Trade Zones (FTZs) are treated, for the purpose of the tariff laws and Customs entry procedures, as being outside the Customs territory of the United States. Under FTZ procedures, foreign and domestic merchandise may be admitted into zones for operations such as storage, exhibition, assembly, manufacture and processing, without being subject to formal Customs entry procedures, the payment of Customs duties or the payment of federal excise taxes. When merchandise is removed from a foreign-trade zone, Customs duties are eliminated if the goods are then exported from the United States. If the merchandise is formally entered into U.S. commerce, Customs duties and excise taxes are due at the time of transfer from the foreign-trade zone. For merchandise that is manufactured in a FTZ with permission of the Foreign-Trade Zones Board, the importer may elect to pay Customs duty at the rate of either the finished product or it’s foreign components, whichever is lower. In this manner, use
