Companies use Foreign Trade Zones in order to reduce or eliminate duty impact on internationally sourced goods or components and take advantage of specific Zone benefits these trade areas provide.

Foreign Trade Zones (FTZ) are secure areas within the United States that are considered to be outside of U.S. Customs territory for tariff purposes.

Because FTZs are treated as if they are outside of the United States, for Customs entry purposes, businesses use these facilities for storage, distribution and (with authorization from the U.S. FTZ Board) production.  Retail trade is prohibited in Foreign Trade Zones.

In FTZs, “production” is considered to be anything that results in a substantial transformation of an article or changes the goods’ eligibility for entry or HTSUS classification.

The following is a list of common activities performed in Foreign Trade Zones:

*May require specific FTZ Board approval

With the necessary approvals, all of the above activities can occur in the FTZ without the payment of duty & tax until the goods enter into U.S. Commerce.

If the goods export or get destroyed, no payment of duty & tax will be owed.

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