Based on the Foreign-Trade Zones Act of 1934, U.S. Foreign-Trade Zones provide world-wide competitiveness strategies to firms throughout the nation. A Foreign-Trade Zone (FTZ) is a site within the United States, in or near a U.S. Customs port of entry, where merchandise is considered to be in international commerce. Zones offer mechanisms for deferring, reducing, or altogether eliminating U.S. Customs duties on imported raw materials, commodities, parts, and components. The FTZ program brings flexible solutions to business, for issues not addressed by other Customs procedures. Exceptions may exist for goods subject to dumping or protective measures. All other federal, state, and local rules and regulations apply.
Industries accounting for the most manufacturing activity in FTZs include oil refineries, automotive manufacturers and suppliers, pharmaceutical firms, and the electronic product sectors.
All FTZ activity is subject to public review, and a public process occurs before approval of individual FTZ projects.
Because FTZs are under the supervision of U.S. Customs and Border Protection, but not within their jurisdiction, the usual Customs forms for entry procedures and payment of duty are not required when foreign merchandise is admitted into a FTZ. When the foreign sourced merchandise leaves the FTZ for entry into the domestic commerce for consumption, Customs paperwork is filed. At the time of filing, the importer may choose to pay duty on the original foreign material or the finished product. Typically, the finished product carries a lower duty rate.
In addition to storage and processing, Foreign-Trade Zone users may:
For additional information on Foreign-Trade Zone 43, contact Jan Frantz. Also, more detailed information may be found at U.S. Foreign-Trade Zones Board or National Association of Foreign-Trade Zones.
