The Foreign-Trade Zone (FTZ) program was created by the U.S. government to facilitate international trade and increase the global competitiveness of U.S.-based companies. The program, which has existed since the 1930s, continues to thrive and change to better meet the needs of American companies in the global economy.

What is an FTZ? An FTZ is an area within the United States, in or near a U.S. Customs port of entry, where foreign and domestic merchandise is considered to be outside the country, or at least, outside of U.S. Customs territory. Certain types of merchandise can be imported into a Zone without going through formal Customs entry procedures or paying import duties. Customs duties and excise taxes are due only at the time of transfer from the FTZ for U.S. consumption. If the merchandise never enters the U.S. commerce, then no duties or taxes are paid on those items.

Activities Permitted in a Foreign-Trade Zone
Merchandise entering a Zone may be:

*The user must receive special approval from the FTZ Board for manufacturing.

Operating within an FTZ carries numerous benefits:

• Deferral, reduction and possible elimination of duties
• Tighter inventory control that may virtually eliminate year-end inventory loss adjustments
• Potential direct delivery benefit reduces long hold times at crowded ports of entry