History

 

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. These special geographic areas - Foreign Trade Zones - are under the supervision of the U.S. Customs Service, and overseen 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. 

In 2009, the U.S. Foreign Trade Zones Board created a new, streamlined process under which FTZs could be organized. The initiative, called the Alternative Site Framework (ASF), allows the extension of FTZ benefits to areas outside of existing zones without the lengthy application and administrative overhead seen previously with the traditional operation of Foreign Trade Zones. ASF is intended to offer flexibility and to attract users/operators of fixed sites as well as enable designation of sites as future demands arise through simpler and faster application processes.  ASF reduces the need for establishing sites for speculative reasons and helps to decrease the number of unactivated sites. 


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