The Foreign-Trade Zones Act was created to "expedite and encourage foreign commerce" in the United States. This is accomplished through the designation of geographical areas, in or adjacent to Customs Ports of Entry, where commercial merchandise receives the same Customs treatment it would if it were outside the commerce of the United States. Merchandise of every description may be held in the Zone without being subject to Customs duties and other ad valorem taxes. This tariff and tax relief is designed to lower the costs of U.S.-based operations engaged in international trade and thereby create and retain the employment and capital investment opportunities that result from those operations. These special geographic areas – Foreign-Trade Zones – are established "in or adjacent to" U.S. Ports of Entry and are under the supervision of the U.S. Customs Service. Since 1986, U.S. Customs' oversight of FTZ operations has been conducted on an audit-inspection basis, whereby compliance is assured through audits and spot checks under a surety bond, rather than through on-site supervision by Customs personnel.

WHY COMPANIES USE FOREIGN TRADE ZONES

All of the benefits the Foreign-Trade Zones program can offer manufacturers and processors located in the United States are too numerous to list here. But, there a few main benefits that account for most of the companies that use the Zones program. Those benefits are listed below: