Resources & FAQs

Looking for more information? From facts and figures to economic development and regulatory partners, use these resources to help land your company in Foreign-Trade Zone 138.

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Why do global firms use Foreign-Trade Zones (FTZs)?

An FTZ can reduce certain operating costs associated with being located in the United States. Companies can maintain the cost competitiveness of U.S.-based operations with foreign-based competitors.

How is an FTZ established?

In order to be designated as an FTZ, a company must apply to the FTZ Board through the local grantee. Grantees are usually a public entity like a chamber of commerce or port authority. The FTZ Board may approve any zone or subzone that it deems necessary to adequately serve “the convenience of commerce.”

Once designated, U.S. Customs and Border Protection must approve activation of the zone before any merchandise is admitted into the zone.

What may be placed in an FTZ?

Any foreign or domestic merchandise not prohibited by law, whether dutiable or not, may be taken into an FTZ. Merchandise that lawfully cannot be entered into a customs territory may be placed in an FTZ because zones are considered outside customs territory. For instance, pharmaceuticals awaiting FDA approval may be admitted into an FTZ. Once FDA approval is received, the merchandise may be entered into the U.S. stream of commerce.

The FTZ Board may exclude any merchandise from a zone that in its judgment is detrimental to public interest, health, or safety. The FTZ Board also ensures that FTZs are not used to bypass other trade laws of the United States.

What activity can occur within an FTZ?

Foreign and domestic merchandise permitted in a zone may be stored, sold, exhibited, broken up, repacked, assembled, sorted, graded, cleaned, mixed with foreign or domestic merchandise, otherwise manipulated, destroyed, or manufactured without being subject to U.S. Customs laws. This exemption does not apply to machinery or equipment that is imported for manufacturing use or the like within a zone.

Although retail trade may not be conducted in an FTZ, e-commerce operations are permitted.

How is U.S. Customs and Border Protection involved?

U.S. Customs and Border Protection is responsible for the day-to-day operations of an FTZ site. The port director of a district where a zone is located is in charge of the zone as the local representative of the FTZ Board. In addition to the Foreign-Trade Zones Act, the port director enforces all laws normally enforced by Customs that are relevant to FTZs.

FTZs are supervised by U.S. Customs and Border Protection officers through periodic checks and visits. The security of the zone must meet U.S. Customs and Border Protection requirements.

Is an FTZ right for my operations?

Consider this:

Car manufacturing plants, oil refineries and distributors, textiles, footwear, pharmaceuticals, and electronics distribution companies are all utilizing FTZs. So are companies with as few as 15 employees.
If you are already using another customs tariff-reduction program, consider an FTZ as a way to streamline operations, cut down on paperwork, increase flexibility, and save additional money. Many companies are discovering that FTZs more efficiently meet their needs than any other customs program.

Keep in mind, FTZs are not a good fit for every company. Benefits are dependent on the product, volume and/or value of imports, and the company’s supply chain. An in-depth cost-benefit study is critical in determining whether a zone is right for you. There are additional costs and obligations, but FTZ operations can provide substantial financial savings and operational flexibility that are well worth the costs.