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Foreign Trade Zone

A foreign trade zone, or FTZ is a secure and enclosed area, located near or in a Port of Entry. An FTZ is considered to be outside U.S. customs territory and border patrol territory, to enable foreign and domestic goods to be moved into it without being subject to U.S. customs duties, until the goods enter U.S. commerce. When merchandise is removed from a FTZ, customs duties may be eliminated if the goods are then exported outside the United States. If the merchandise formally enters into U.S. commerce, customs duties will be applied.

TYPES OF FOREIGN TRADE ZONES
General-purpose zones involve public facilities that can be used by more than one firm.  These typically consist of ports or industrial parks used by small to medium sized businesses for warehousing/distribution and some processing/assembly.

Subzones typically involve a single firm's site which is used for more extensive manufacturing/processing or warehousing/distribution that cannot easily be accomplished in a general-purpose zone.

BENEFITS OF FOREIGN TRADE ZONES
• Ability to defer, reduce, or eliminate duty charges depending on the use of the incoming goods and if they are exported or stay in the U.S. Customs duties may be deferred until the product is removed from the zone for entry into U.S territory.

• In situations where zone manufacturing results in a finished product that has a lower duty rate than the rates on foreign inputs (inverted tariff), the finished products may be entered at the duty rate that applies to its condition as it leaves the zone -- subject to public interest considerations.

• Foreign and domestic goods held for export are exempt from state/local inventory taxes. FTZ status may also make a site eligible for state/local benefits which are unrelated to the FTZ Act.

• Ability to take advantage of special customs procedures such as direct delivery and weekly entry to expedite the movement of cargo.

The Western New York region has Foreign Trade Zones in both Erie and Niagara County. To learn more about the FTZ please contact the Local Industrial Development Agencies below.

County of Erie 
ECIDA, 275 Oak Street
   Buffalo, NY 14203

County of Niagara 
NCIDA, 6311 Inducon Corporate Drive 
  Sanborn, NY 14132