Foreign Trade Zone

Foreign Trade Zones are secure areas within US Customs territory where goods can be imported, stored, manipulated, and re-exported without payment of duties until — and only if — the goods enter US commerce. For manufacturers, FTZ status can significantly reduce duty exposure: goods admitted in a foreign status pay duty only on the finished product, not on each input component, and at whichever rate — component or finished good — is lower. Weekly entry procedures replace transaction-by-transaction customs filings. The compliance obligation in an FTZ is substantial: CBP requires detailed zone records, admission documentation, and inventory control systems that account for every item in the zone at all times. CBP conducts FTZ compliance examinations, and discrepancies between zone records and CBP records can result in loss of zone status.