What is a FTZ ? Foreign Trade Zones “A Foreign Trade Zone is a restricted–access site, in or adjacent to a Customs Port of Entry, operated pursuant to public utility principles under the sponsorship of a corporation granted authority by the Board and under supervision of the Customs Service”. This is defined in the regulations of the Foreign Trade Zones Board (19CFR Part 400) FTZs are treated, for the purposes of the tariff laws and Customs entry procedures, as being outside the Customs Territory of the United States. Under FTZ 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 Custom entry procedures, the payment of Customs duties or the payment of federal excise taxes Benefits The main benefit offered by the FTZ is the ability to defer, reduce or even eliminate Custom duties on products admitted to the Zone Tenants, in a Foreign Trade Zone environment can reduce costs in different ways: Eliminating duties and quota charges on merchandise exported Deferring Customs duties and Federal Excise Tax on imports Delaying duties and taxes until merchandise is transferred into US Customs territory Transfer merchandise from one zone to another) Storing goods indefinitely without paying duties Not paying duties on waste Eliminating drawbacks Saving on Customs transaction fees via Weekly Entry and Weekly Exports and improving cash flow