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Foreign Trade Zone 286

The Foreign Trade Zone (FTZ) program was created by the Federal Government in the 1930's, and continues to thrive today. The purpose of the FTZ program is to facilitate trade and increase the global competitiveness of U.S.-based companies.

Legally, a Foreign Trade Zone (FTZ) is an area within the United States that the Government considers outside the country, or at least, outside of the U.S. Customs territory. Certain types of merchandise can be imported into a Zone without going through formal Customs entry procedures or paying import duties.


Some of the benefits of operating within an FTZ are obvious. At the very least an FTZ can help a business defer paying duties. More often, the company pays lower costs, not only to U.S. Customs, but to its bank, insurance company, and other vendors.

Permitted Activities in a Foreign-Trade Zone

Assembling, Repackaging, Cleaning, Testing, Destroying, Storing, Sampling, Mixing, Salvaging, Re-labeling, Manipulating, Processing, Manufacturing*

*The user must receive special approval from the FTZ Board for manufacturing

Advantages of Using an FTZ

  1.    1. Imports may be admitted and held without paying U.S. Customs duties.
  2.    2. Users can pay the duty rate on component material or merchandise produced from component
    material, whichever is lower.
  3.    3. Customs duties are never paid on merchandise exported.
  4.    4. Duties are reduced or eliminated on materials subject to defect, damage, obsolescence, waste or scrap.
  5.    5. Merchandise may be exported or returned to an FTZ without duty payment.
  6.    6. Spare parts may be stored, returned, or destroyed without duty payment.
  7.    7. Delays in Customs clearances and duty drawback are eliminated.
  8.    8. Duties are not owed on labor, overhead, or profit attributed to FTZ production operations.
  9.    9. Quality control inspections can identify sub-standard goods to be destroyed or returned without duty
  10.    10. No duty is owed on in-bond, zone-to-zone transfer of FTZ merchandise.

Additional Information is available as downloadable .pdfs below

Foreign Trade Zone 286 Administrator
David Snedeker  
Tel: 802-748-8303