What is a Foreign Trade Zone

Foreign Trade Zones, known throughout the world as "free trade zones" are designated by the U.S. Department of Commerce and operate under the supervision of the U.S. Customs Service.

Foreign Trade Zones are physical areas within the continental limits of the United States that are considered to be outside U.S. Customs territory. Merchandise can be brought into a foreign trade zone and:

» stored » repackaged » processed
» tested » displayed » assembled
» cleaned » repaired » manufactured
» sampled » manipulated » salvaged
» relabeled » mixed » destroyed
  » re-exported  

The great business advantage of a zone is that it is treated as though it were located outside the United States, for Customs purposes. For example, imported goods may be brought into a foreign trade zone without:

» payment of customs duties
» payment of state or federal excise taxes
» formal Customs entry
» general U.S. quota restrictions
» State inventory taxes (in most cases)