Foreign-trade zones are designated areas considered to be outside Customs Territory of the United States. The FTZ Act provides for the designation of areas in all fifty states, the District of Columbia, and Puerto Rico into which "Foreign and domestic merchandise...without being subject to the customs laws of the United States may be brought." (FTZ Act of 1934, as amended)
The FTZ Program is a trade program designed to offer certain benefits to the users. Each potential user must analyze the relevant facts and circumstances to determine and to quantify the potential benefits of operating or using a general-purpose zone or a subzone.
The financial benefits are:
➤ Duty deferral
➤ Duty elimination on exports
➤ Duty reduction (inverted tariff relief)
➤ Local ad valorem tax exemption
Foreign Trade Zones are organized as general-purpose zones or as subzones. General-purpose zones are organized using public utility principles and serve multiple users. Subzones are adjuncts to general-purpose zones organized to serve only one user.
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