In an effort to combat the destructive Smoot-Hawley Tariffs imposed in 1930, the Foreign-Trade Zones Act of 1934 was created. Foreign-Trade Zones within the United States were set up to “expedite and encourage foreign commerce.” The first foreign-trade zone was opened on February 1st, 1937 in New York City. Today, there are over 230 foreign-trade zones across the United States.

A foreign-trade zone is a designated area which is in or adjacent to a U.S. Customs Port of Entry. The zone is considered to be outside the Customs Territory of the United States for the purpose of customs duty payment, but is still under the supervision of U.S. Customs and Border Protection. Merchandise may be held in a foreign-trade zone without being subject to Customs duties and other taxes.

The purpose of a foreign-trade zone is to lower the cost of doing business for U.S. based companies who engage in international trade. Lowered business costs allow companies to create and retain both employment and capital investment opportunities within the United States. Through their operations, foreign trade zones create a positive economic effect and result in a significant public benefit.

Merchandise brought into a zone may be assembled, manufactured, exhibited, cleaned, manipulated, processed, repackaged, repaired, stored, displayed, or destroyed to name just a few possibilities. Any merchandise not prohibited by U.S. law or governmental regulation from entry into the U.S. territory may be admitted to a foreign-trade zone.

Corporate Office

UPS Trade Management Services, Inc.
One Indiana Square, Suite 1350
Indianapolis, IN 46204
Phone: 317-260-2926
Fax: 317-244-2901

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Useful Links

We’ve provided you with a short list of helpful links to more trade zone information. If there are other links you believe would be useful, email them to us.

Foreign Trade Zones Board
Journal of Commerce

Federal Register

Code of Federal Regulations (CFR)

HTS On-Line Reference Tool

Foreign Trade Zone

SHORT DEFINITION - A Foreign Trade Zone (FTZ) is a designated geographic location within in the United States that is considered to legally be outside of U.S. Customs territory for duty purposes.

Goods brought into a Foreign Trade Zone are considered to be part of international commerce and not domestic. They will only be taxed upon officially exiting the zone and entering U.S. commerce.

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