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          <TD class=breadcrumb_link><A class=breadcrumb_link 
            href="http://www.cbp.gov/xp/cgov/home.xml">Home</A>  /  <A 
            class=breadcrumb_link 
            href="http://www.cbp.gov/xp/cgov/trade/">Trade</A>  /  <A 
            class=breadcrumb_link 
            href="http://www.cbp.gov/xp/cgov/trade/cargo_security/"><SPAN 
            style="TEXT-TRANSFORM: capitalize">Cargo</SPAN> <SPAN 
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            style="TEXT-TRANSFORM: capitalize">Foreign-Trade</SPAN> <SPAN 
            style="TEXT-TRANSFORM: capitalize">Zones</SPAN></A>  /  
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                                <TD class=see_also width=160>see also:<IMG 
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                                width=1></TD></TR>
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                                alt="right arrow" 
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                                <TD class=related_links_section_header 
                                width=160>in Foreign-Trade Zones: <IMG 
                                class=break height=7 alt="" 
                                src="About%20Foreign-Trade%20Zones%20&%20Contact%20Info%20-%20CBP_gov_files/spacerclear.gif"></TD></TR><IMG 
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                                width=1>
                                <TR>
                                <TD> </TD>
                                <TD><A class=sa_links title="" 
                                style="TEXT-DECORATION: none" 
                                href="http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/cargo_control/ftz/ftzmanual.ctt/FTZManual2.pdf">Foreign 
                                Trade Zones Manual<BR></A><A class=sa_links_date 
                                title="Foreign Trade Zones Manual - pdf version" 
                                style="TEXT-DECORATION: none" 
                                href="http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/cargo_control/ftz/ftzmanual.ctt/FTZManual2.pdf">(pdf 
                                - 1,882 KB.) </A><A class=sa_links_date 
                                title="Foreign Trade Zones Manual - doc version" 
                                style="TEXT-DECORATION: none" 
                                href="http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/cargo_control/ftz/ftzmanual.ctt/FTZManual2.doc">(doc 
                                - 748 KB.) </A><IMG class=break height=7 alt="" 
                                src="About%20Foreign-Trade%20Zones%20&%20Contact%20Info%20-%20CBP_gov_files/spacerclear.gif"></TD></TR>
                                <TR>
                                <TD> </TD>
                                <TD><A class=sa_links title="" 
                                style="TEXT-DECORATION: none" 
                                href="http://www.cbp.gov/xp/cgov/trade/cargo_security/cargo_control/ftz/ask_ftz.xml">Frequently 
                                Asked Questions<BR></A><IMG class=break height=7 
                                alt="" 
                                src="About%20Foreign-Trade%20Zones%20&%20Contact%20Info%20-%20CBP_gov_files/spacerclear.gif"></TD></TR>
                                <TR>
                                <TD> </TD>
                                <TD><A class=sa_links title="" 
                                style="TEXT-DECORATION: none" 
                                href="http://www.cbp.gov/xp/cgov/trade/cargo_security/cargo_control/ftz/214website.xml">CBP 
                                Field Offices Currently Accepting Electronic 
                                CBPF 214 Admissions<BR></A><IMG class=break 
                                height=7 alt="" 
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                                <TR>
                                <TD> </TD>
                                <TD><A class=sa_links title="" 
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                        name=skip><SPAN class=article_title>About Foreign-Trade 
                        Zones & Contact Info<BR></SPAN><IMG class=break 
                        height=10 alt="" 
                        src="About%20Foreign-Trade%20Zones%20&%20Contact%20Info%20-%20CBP_gov_files/spacerclear.gif"><SPAN 
                        class=subtitle>An Introduction to Foreign-Trade 
                        Zones</SPAN><BR>Foreign-Trade Zones (FTZ) are secure 
                        areas under U.S. Customs and Border Protection (CBP) 
                        supervision that are generally considered outside CBP 
                        territory upon activation. Located in or near CBP ports 
                        of entry, they are the United States’ version of what 
                        are known internationally as free-trade zones.
                        <P class=p>
                        <P class=p>Authority for establishing these facilities 
                        is granted by the Foreign-Trade Zones Board under the 
                        Foreign-Trade Zones Act of 1934, as amended (19 U.S.C. 
                        81a-81u). The Foreign-Trade Zones Act is administered 
                        through two sets of regulations, the FTZ Regulations (15 
                        CFR Part 400) and CBP Regulations (19 CFR Part 146). 
                        <P class=p>
                        <P class=p>Foreign and domestic merchandise may be moved 
                        into zones for operations, not otherwise prohibited by 
                        law, including storage, exhibition, assembly, 
                        manufacturing, and processing. All zone activity is 
                        subject to public interest review. Foreign-trade zone 
                        sites are subject to the laws and regulations of the 
                        United States as well as those of the states and 
                        communities in which they are located. 
                        <P class=p>
                        <P class=p>Under zone procedures, the usual formal CBP 
                        entry procedures and payments of duties are not required 
                        on the foreign merchandise unless and until it enters 
                        CBP territory for domestic consumption, at which point 
                        the importer generally has the choice of paying duties 
                        at the rate of either the original foreign materials or 
                        the finished product. Domestic goods moved into the zone 
                        for export may be considered exported upon admission to 
                        the zone for purposes of excise tax rebates and 
                        drawback. 
                        <P class=p>
                        <P class=p>Qualified public or private corporations that 
                        may operate the facilities themselves or contract for 
                        the operation sponsors foreign-trade zones. The 
                        operations are conducted on a public utility basis, with 
                        published rates. A typical general-purpose zone provides 
                        leasable storage/distribution space to users in general 
                        warehouse-type buildings with access to various modes of 
                        transportation. Many zone projects include an industrial 
                        park site with lots on which zone users can construct 
                        their own facilities.
                        <P class=p>
                        <P class=p>Subzones are normally private plant sites 
                        authorized by the Board and sponsored by a grantee for 
                        operations that usually cannot be accommodated within an 
                        existing general-purpose zone. 
                        <P class=p>
                        <P class=p>
                        <P class=p><SPAN class=subtitle>The Advantages of Using 
                        a Foreign-Trade Zone</SPAN><BR>CBP duty and federal 
                        excise tax, if applicable, are paid when the merchandise 
                        is transferred from the zone for consumption.
                        <P class=p>
                        <P class=p>While in the zone, merchandise is not subject 
                        to U.S. duty or excise tax. Certain tangible personal 
                        property is generally exempt from state and local ad 
                        valorem taxes.
                        <P class=p>
                        <P class=p>Goods may be exported from the zone free of 
                        duty and excise tax. 
                        <P class=p>
                        <P class=p>CBP security requirements provide protection 
                        against theft. 
                        <P class=p>
                        <P class=p>Merchandise may remain in a zone 
                        indefinitely, whether or not subject to duty. 
                        <P class=p>
                        <P class=p>The rate of duty and tax on the merchandise 
                        admitted to a zone may change as a result of operations 
                        conducted within the zone. Therefore, the zone user who 
                        plans to enter the merchandise for consumption to CBP 
                        territory may normally elect to pay either the duty rate 
                        applicable on the foreign material placed in the zone or 
                        the duty rate applicable on the finished article 
                        transferred from the zone whichever is to his advantage. 

                        <P class=p>
                        <P class=p>Merchandise imported under bond may be 
                        admitted to a FTZ for the purpose of satisfying a legal 
                        requirement of exporting the merchandise. For instance, 
                        merchandise may be admitted into a zone to satisfy any 
                        exportation requirement of the Tariff Act of 1930, or an 
                        exportation requirement of any other Federal law (and 
                        many state laws) insofar as the agency charged with its 
                        enforcement deems it so.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>Establishing a 
                        Foreign-Trade Zone</SPAN><BR>The Foreign-Trade Zones Act 
                        of 1934 created a Foreign-Trade Zones Board to review 
                        and approve applications to establish, operate, and 
                        maintain foreign-trade zones. The Board may approve any 
                        zone or subzone which it deems necessary to serve 
                        adequately "the public interest".
                        <P class=p>
                        <P class=p>The Board also regulates the administration 
                        of foreign-trade zones and the rates charged by zone 
                        "grantees".
                        <P class=p>
                        <P class=p>CBP must approve activation of the zone 
                        before any merchandise is admitted under the 
                        Foreign-Trade Zones Act.
                        <P class=p>
                        <P class=p>It is the intent of the U.S. foreign-trade 
                        zone program to stimulate economic growth and 
                        development in the United States. In an expanding global 
                        marketplace there is increased competition among nations 
                        for jobs, industry and capital. The FTZ program was 
                        designed to promote American competitiveness by 
                        encouraging companies to maintain and expand their 
                        operations in the United States.
                        <P class=p>
                        <P class=p>The FTZ program encourages U.S.-based 
                        operations by removing certain disincentives associated 
                        with manufacturing in the United States. The duty on a 
                        product manufactured abroad and imported into the U.S. 
                        is assessed on the finished product rather than on its 
                        individual parts, materials, or components. The U.S. 
                        based manufacturer finds itself at a disadvantage 
                        compared with its foreign competitor when it must pay a 
                        higher rate on parts, materials, or components imported 
                        for use in a manufacturing process. The FTZ program 
                        corrects this imbalance by treating products made in the 
                        zone, for the purpose of tariff assessment, as if it 
                        were manufactured abroad. At the same time, this country 
                        benefits because the zone manufacturer uses U.S. labor, 
                        services, and inputs.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>Role of 
                        CBP</SPAN><BR>CBP is responsible for the transfer of 
                        merchandise into and out of the FTZ and for matters 
                        involving the collection of revenue. The Office of 
                        Regulations and Rulings at CBP Headquarters provides 
                        legal interpretations of the applicable statute, CBP 
                        Regulations and procedures.
                        <P class=p>
                        <P class=p>The Port Director of CBP, in whose port a 
                        zone is located, is charged with overseeing zone 
                        activity as the local representative of the 
                        Foreign-Trade Zones Board. He or she controls the 
                        admission of merchandise into the zone, the handling and 
                        disposition of merchandise in the zone, and the removal 
                        of merchandise from the zone. In addition to the 
                        Foreign-Trade Zones Act, he or she enforces all laws 
                        normally enforced by CBP that are relevant to 
                        foreign-trade zones.
                        <P class=p>
                        <P class=p>Zones are supervised by FTZ Coordinators 
                        (i.e., CBP Officers, Import Specialists, Entry 
                        Specialists or Agricultural Specialists, etc.) through 
                        compliance reviews and visits; the security of the zone 
                        must meet certain requirements.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>What may be placed in 
                        zones</SPAN><BR>Any foreign or domestic merchandise not 
                        prohibited by law or other exception listed below, 
                        whether dutiable or not, may be taken into a 
                        foreign-trade zone.
                        <P class=p>
                        <P class=p>Merchandise, which lawfully cannot be 
                        imported into the United States, is prohibited without 
                        exception. Furthermore, placing merchandise subject to a 
                        quota into a zone cannot circumvent quota on the 
                        imported merchandise.
                        <P class=p>
                        <P class=p>On the other hand, merchandise for which a 
                        quota is filled or for which a quota on entry is 
                        established, may be placed into a zone until the quota 
                        opens or is removed since foreign-trade zones are 
                        considered outside CBP territory for entry purposes. 
                        Such products, with the exception of certain textiles 
                        (19 CFR 146.63(d)), may be manipulated or manufactured 
                        while in the zone into a product not subject to quota.
                        <P class=p>
                        <P class=p>Some Federal agencies regulate storage and 
                        handling in the United States of certain types of 
                        merchandise, such as explosives. Depending on the nature 
                        of the requirements and the particular characteristics 
                        of the zone facility, such merchandise may be excluded. 
                        Moreover, agencies, which license importers or issue 
                        importation permits may block admissions to a zone, 
                        which are not properly licensed or permitted.
                        <P class=p>
                        <P class=p>The Foreign-Trade Zones Board may exclude 
                        from a zone any merchandise that is in its judgment 
                        detrimental to the public interest, health, or safety. 
                        The Board may place restrictions on certain types of 
                        merchandise, which would limit the zone status allowed, 
                        the kind of operation on the merchandise in a zone, the 
                        entry of the merchandise into the commerce, or similar 
                        transactions or activities.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>What may be done in 
                        zones</SPAN><BR>The Foreign-Trade Zones Board may 
                        exclude from a zone any merchandise that is in its 
                        judgment detrimental to the public interest, health, or 
                        safety. The Board may place restrictions on certain 
                        types of merchandise, which would limit the zone status 
                        allowed, the kind of operation on the merchandise in a 
                        zone, the entry of the merchandise into the commerce, or 
                        similar transactions or activities.
                        <P class=p>
                        <P class=p>Many products subject to an internal revenue 
                        tax may not be manufactured in a zone. These products 
                        include alcoholic beverages, products containing 
                        alcoholic beverages except domestic denatures distilled 
                        spirits, perfumes containing alcohol, tobacco products, 
                        firearms, and sugar. In addition, the manufacture of 
                        clock and watch movements is not permitted in a zone.
                        <P class=p>
                        <P class=p>No retail trade of foreign merchandise may be 
                        conducted in a FTZ. However, foreign and domestic 
                        merchandise may be stored, examined, sampled, and 
                        exhibited in a zone.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>Entering merchandise 
                        from a zone into the United States for 
                        consumption</SPAN><BR>The entry, classification, and 
                        appraisement of merchandise transferred from a 
                        foreign-trade zone is affected by the "status" of the 
                        merchandise.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>Privileged foreign 
                        status</SPAN><BR>Prior to any manipulation or 
                        manufacture, which would change its tariff 
                        classification, an importer may apply to the Port 
                        Director to have imported merchandise in the zone given 
                        privileged foreign status. The merchandise is classified 
                        and appraised and duties and taxes are determined as of 
                        the date the application is filed. When such merchandise 
                        is transferred from the zone for U.S. consumption, 
                        either in its original state or after manipulation or 
                        manufacture the applicable duties and taxes would be 
                        paid based on the rate established when privileged 
                        foreign status was granted.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>Zone restricted 
                        status</SPAN><BR>Merchandise transferred to a zone from 
                        CBP territory for storage or for the purpose of 
                        satisfying a legal requirement for exportation or 
                        destruction is considered exported and cannot be 
                        returned to CBP territory for consumption unless the 
                        Foreign-Trade Zones Board rules that it's return is in 
                        the public interest. The status of merchandise 
                        transferred to a zone under these circumstances is "zone 
                        restricted." Zone restricted merchandise may not be 
                        manipulated, except to destroy it, or manufactured in a 
                        zone. As in the case of privileged foreign status, the 
                        zone user must apply for zone restricted status on the 
                        appropriate CBP form.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>Nonprivileged foreign 
                        status</SPAN><BR>Merchandise composed entirely of or 
                        derived entirely of nonprivileged merchandise are 
                        appraised and classified in its condition at the time of 
                        transfer into CBP territory for consumption or for CBP 
                        bonded warehousing. Waste recovered from privileged 
                        foreign merchandise is assigned NPF status. Domestic 
                        merchandise, which has lost its identity, will be 
                        assigned NPF status. NPF may be changed to PF prior to 
                        manipulation or manufacture.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>Domestic 
                        status</SPAN><BR>Domestic status, which may be approved 
                        upon application to the Port Director, is available for 
                        merchandise which is (a) the growth, product, or 
                        manufacture of the United States on which all internal 
                        revenue taxes, if applicable, have been paid, (b) 
                        previously imported merchandise on which all internal 
                        revenue taxes have been paid, or (c) merchandise 
                        previously admitted free of duty. Domestic merchandise 
                        may be admitted to a zone without a CBP permit, and also 
                        removed from a zone without a CBP permit if it has not 
                        been combined with any other merchandise of any other 
                        status.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>Articles of mixed 
                        status</SPAN><BR>Since manipulation and manufacture 
                        generally are permitted in a zone, articles transferred 
                        to CBP territory may be composed in part of, or derived 
                        in part from, merchandise that is privileged and 
                        nonprivileged, whether foreign and/or domestic. The 
                        articles are appraised according to the status of the 
                        merchandise of which they are composed or from which 
                        they were derived as explained above. Additionally, 
                        foreign merchandise, subject to specified CBP controls 
                        and conditions, may be temporarily removed from a zone 
                        without formal entry for the performance of certain 
                        limited operations and thereafter returned in the same 
                        zone status to the zone from which it is removed. This 
                        procedure is designed to remove unnecessary burdens on 
                        zone inventory and accounting procedures where, in doing 
                        so, there is no danger to the revenue.
                        <P class=p>
                        <P class=p><SPAN class=subtitle>Where is additional 
                        information available?</SPAN><BR>The Executive 
                        Secretariat of the Board is located at:<BR>
                        <P class=p><B>U.S. Department of 
                        Commerce</B><BR><B>Foreign-Trade Zones 
                        Board</B><BR><B>1401 Constitution Avenue, NW, Room 
                        2111</B><BR><B>Washington, D.C. 20230</B><BR><B>Main</B> 
                        <B>Phone: (202) 482-2862</B><BR><SPAN class=date>( 
                        </SPAN><A class=related_links_links 
                        style="TEXT-DECORATION: none" 
                        href="http://www.cbp.gov/xp/cgov/offsiteRedirectPg.xml?title=Foreign-Trade+Zones+Board&url=http%3A%2F%2Fia.ita.doc.gov%2Fftzpage%2Findex.html&referrer=/xp/cgov/trade/cargo_security/cargo_control/ftz/about_ftz.xml" 
                        target=_blank>Foreign-Trade Zones Board</A><SPAN 
                        class=date> ) </SPAN>
                        <P class=p>
                        <P class=p>CBP Regulations, 19 CFR Part 146, govern the 
                        transfer of merchandise to and from foreign-trade zones. 
                        For answers to specific questions contact the Port 
                        Director of the CBP port where the zone is located or 
                        CBP headquarters at:<BR>
                        <P class=p><B>U.S. Customs and Border 
                        Protection</B><BR><B>Office of Field 
                        Operations</B><BR><B>Cargo and Conveyance 
                        Security</B><BR><B>1300 Pennsylvania Avenue, NW, Room 
                        5.2C</B><BR><B>Washington, D.C. 20229</B><BR>
                        <P class=p>or email: <A 
                        href="mailto:yvette.m.woodruff@dhs.gov">Cargo 
                        Control</A><IMG class=break height=20 alt="" 
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