Foreign Trade Zones

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Foreign Trade Zones


In reading and going over chapter 17, I learned a lot but what most interesting is that the field that I work in which is a Logistic Company and we export and import shipments all day long. We do lots from holding goods and receiving and shipping out goods to the Georgia Port Authority and we do custom paperwork. So this was very enlightening to me and there was lots of information on the internet. I choose this article because of the homework assignment that was given to us and I think that it was great information to anyone learning about FTZs.

Foreign trade zones (FTZs) are designated sites where special customs procedures apply. Foreign trade zones in the United States are comparable to so-called free trade zones in many countries, though procedures vary widely from country to country. FTZs allow domestic activity involving foreign items to take place as if it were outside the customs territory of the United States for duty payment purposes, thus offsetting customs advantages available to overseas producers who export in competition with products made in the United States.


A foreign trade zone is a restricted access site authorized by the Foreign-Trade Zones Board, which consists of the treasury and commerce secretaries (the secretary of commerce chairs the board). FTZs, upon activation under regulations of the U.S. Customs Service, are secure areas under U.S. Customs supervision. These zones are at or near U.S. Customs ports of entry. Formal customs entry procedures don?ft apply in these zones, although FTZs are within the territory and jurisdiction of the United States.


Congress established the Foreign-Trade Zones Board in 1934 to license and regulates FTZs in the United States. FTZs were established for a number of reasons, the primary being to encourage and expedite U.S. participation in international trade. Foreign goods may be admitted to an FTZ without being subject to customs duties and certain excise taxes. FTZs allow deferred payment of duties until goods are entered into the commerce of the United States. Under zone procedures, the usual customs entry procedures and payment of duties are not required on foreign merchandise until it actually enters customs territory for domestic consumption. Foreign mercha...

... middle of paper ... clearance. FTZs also assist state and local officials to develop their economies by attracting foreign commerce. And by helping U.S. companies improve their international competitiveness, FTZs can help retain local business and encourage the development of additional jobs. FTZs also facilitate international trade, as noted in the advantages above.


Many other countries operate special customs areas, such as free trade zones (also referred to as FTZs) and export processing zones. U.S. exporters and other interested parties should contact the embassy or customs officials of individual countries for specific procedures, requirements, and arrangements. Although there may be several similarities, it should not be assumed that a free trade zone overseas operates under the same principles as a foreign trade zone in the United States. Contact information for foreign embassies is available by calling the Trade Information Center at 800- USA-TRADE, or by visiting Many U.S.freight forwarders also have working relationships with trade zones overseas and can provide information on the documentation required to ship goods through them.

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