What Is a Foreign Trade Zone?

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A Foreign Trade Zone (FTZ) is a designated, secure location where imported raw materials or goods and product that will be exported can be stored, processed, repaired, repackaged, or finished before being (re-)exported or entered into the domestic marketplace. Materials and goods that are brought into an FTZ are exempt from customs duties for as long as they remain in the zone.

The Foreign-Trade Zone program was created in 1934 by Congress as an incentive to encourage companies to keep investment and jobs in the United States and not move production offshore. U.S. FTZ's are counterparts to free trade zones in other parts of the world.

Is a Foreign Trade Zone Right for Your Company?

FTZ's are ideal for companies that meet one or more of the following criteria:

  1. Import a high volume of product
  2. Import high-value products
  3. Currently use other U.S. Customs tariff-reduction programs (e.g. Duty Drawback, Bonded Warehouse, Temporary Importation Bonds
  4. Import components for final assembly or packaging into a finished product
  5. Have a high volume of scrap

Benefits of Working with a Company Authorized to Operate within an FTZ

The benefits of working with an authorized FTZ operator are:

  1. Product in the FTZ is not subject to U.S. Customs duties or excise tax
  2. Product may also exempt from state and local taxes
  3. Product exported from the FTZ remains exempt from U.S. Customs duty and excise tax
  4. Damaged product disposed of within the FTZ remains exempt from U.S. Customs duty and excise tax
  5. Product may remain in the FTZ indefinitely
  6. FTZ locations are secured under U.S. Customs and Border Patrol regulations

Typical Zone Users

These types of companies typically make use of FTZ's:

  1. Automotive assembly plants
  2. Automotive OEM suppliers
  3. Distributors
  4. Ecommerce merchandisers
  5. Pharmaceutical companies
  6. Electronics and computer manufacturers
  7. General manufactures
  8. Food processors
  9. Petrochemical companies

About ASW

Located in FTZ #181, ASW’s Akron/Mogadore operations are strategically located to quickly access over 60% of the U.S. population and more than 50% of Canada’s. A partnership with ASW offers foreign and domestic companies an opportunity to defer, reduce, or eliminate duties and tariffs on imports.

ASW FTZ Brochure