What is a Foreign-Trade Zone?
A foreign-trade zone is a designated site licensed by the Foreign-Trade Zones (FTZ) Board
at which special customs procedures may be used. These procedures allow domestic activity
involving foreign items to take place prior to formal customs entry. Duty-free treatment is
accorded items that are re-exported and duty payment is deferred on items sold in the U.S.
market, thus offsetting customs advantages available to overseas producers who compete with
producers located in the United States. Subzones are special-purpose zones, usually at
manufacturing plants. A site which has been granted zone status may not be used for zone
activity until the site has been separately approved for FTZ activation by local U.S. Customs
and Border Protection (CBP) officials, and the zone activity remains under the supervision
of CBP. FTZ sites and facilities remain within the jurisdiction of local, state or federal
governments or agencies.
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