Foreign trade zones are areas within the United States where foreign and domestic goods are not within U.S. Customs Territory. Users are thereby exempt from paying duty or federal tax while goods remain in the zone or are exported.
A general purpose foreign trade zone usually is located at an industrial park, port authority, or adjacent to an airport.
Under foreign trade zone procedures, foreign and domestic merchandise may be admitted into zones for operations such as storage, exhibition, assembly, manufacture and processing, without being subject to formal Customs entry procedures, the payment of Customs duties, or the payment of federal excise taxes.
When merchandise is removed from a foreign trade zone, Customs duties may be eliminated if the goods are then exported from the United States. If the merchandise is formally entered into U.S. commerce, Customs duties and excise taxes are due at the time of transfer from the foreign trade zone.
Merchandise entering a zone may be:
- Assembled
- Displayed
- Stored
- Tested
- Repaired
- Manufactured
- Sampled
- Manipulated
- Salvaged
- Relabeled
- Mixed
- Destroyed
- Repackaged
- Cleaned
- Processed