U.S. International Trade Administration:
Foreign-Trade Zones Board FAQs
Foreign-Trade Zones: Supporting U.S. Competitiveness and Jobs (PDF)
FTZ Savings Calculator Resources
PointTrade Services, Inc.
International Trade Administration
Q: What is the U.S. Foreign-Trade Zone program?
A: A foreign-trade zone is a secure, defined location in or near a port of entry where special customs procedures may be used. Located in all 50 states and Puerto Rico, FTZ’s encourage U.S. involvement in international trade and capital investment.
The FTZ Program was developed to promote economic development through international trade. The Foreign-Trade Zones Act of 1934 created the Foreign-Trade Zones Board, which reviews and approves foreign-trade zone applications based on the public interest of the FTZ project. The FTZ Board also regulates the administration of foreign-trade zones and the rates charged by zone grantees.
Q: What activities are permitted with a Foreign-Trade Zone?
A: Merchandise in a zone may be assembled, cleaned, displayed, destroyed, exhibited, manipulated, manufactured, mixed, processed, relabeled, repackaged, repaired, salvaged, sampled, stored and tested. Manufacturing, processing and any activity that results in a change of the tariff classification must be specifically approved by the FTZ Board. Retail trade is prohibited in FTZs.
Q: What is duty deferral?
A: Imported products admitted to the FTZ are not entered into the Customs territory until their withdrawal from the FTZ. Therefore, users obtain a cash-flow savings by deferring Customs duties until the merchandise leaves the FTZ for consumption in the U.S. Certain duty deferral and reduction benefits also apply on production equipment admitted to the FTZ for assembly and testing prior to use in production.
Q: What is Zone-to-Zone transfer?
A: If the company uses more than one FTZ, merchandise may be transferred from zone to zone in order to extend the deferral benefits further. This can be implemented up and down the supply chain by incorporating the activities of suppliers and customers.
Q: Is duty elimination available in the FTZ?
A: Goods may be exported from a zone free of duty and federal excise tax. Goods may also be destroyed in a zone without payment of duty and federal excise tax.
Q: Is duty reduction or inverted tariff relief available in the FTZ?
A: With approval from the Foreign-Trade Zones Board, when merchandise is admitted into the zone, the importer may elect a zone status that requires payment of the duty rate applicable to either the materials as admitted or to the finished product as removed from the zone, depending upon which is lower. This benefit is only applicable to manufacturing zones.