Foreign trade zone is an area in the United States where importers may store, exhibit, and process foreign goods without paying customs duties (import taxes). The zones are policed by U.S. Customs and Border Protection. Customs officials collect duty only if the goods entering the United States are to be used or sold. If the goods are exported directly from the foreign trade zones, no duty is paid. In other countries, foreign trade zones are sometimes called free trade zones or free ports (see Free trade zone ).
There are two types of foreign trade zones. General-purpose zones, which are usually at ports or industrial parks, are open for use by multiple importers. Subzones, which are usually at manufacturing plants, are for use by a single importer. The Foreign-Trade Zones Board—made up of the secretaries of commerce and the treasury—licenses the zones and monitors activity within them. The board was established in 1934.
