FTZ Program

ABCs of FTZs

  • Activation: A zone cannot be used until it’s activated by U.S. Customs and Border Protection (CBP). This permits the admission and handling of merchandise in zone status. Activation includes steps such as background checks, the submission of a written procedures manual, posting a bond with CBP, and a review of the site’s security and inventory-control methods.
  • Admit, Admission: These U.S. CBP terms describe the shipment of merchandise into U.S. foreign-trade zones (FTZs) under CBP supervision (19 CFR 146.1). The word “admission” is used rather than “entry” to avoid confusion with CBP entry processes.
  • Direct Delivery: A procedure for delivery of merchandise to a zone without prior application and approval on CBP Form 214. It is designed for low-risk, repetitive shipments whose ordering and timing are under the control of the operator. Approval to utilize direct delivery must be obtained from the port director.
  • Entry for Consumption: The general customs process of filing necessary CBP documents (including duty evaluation) that allows merchandise to be brought into the commerce of the United States. This process occurs when merchandise is shipped from the zone into U.S. commerce.
  • Foreign-Trade Zones Board (FTZB): Part of the U.S. Commerce Department that oversees the federal foreign-trade zones program.
  • Grant of Authority: Approval by the FTZB that authorizes a zone grantee (administrator) to establish, operate, and maintain a zone — subject to federal limitations and conditions. In Southeast Michigan, that grantee is Greater Detroit Foreign-Trade Zone, Inc.
  • Grantee/Zone Grantee: The corporate entity authorized to act as overseer of a zone project. Zone No. 70 (Southeast Michigan) is administered by Greater Detroit Foreign-Trade Zone, Inc.
  • Magnet Site: A site intended to serve or attract multiple operators or users.
  • Port of Entry: A port (seaport, airport, rail tunnel, or international bridge, for example) through which goods are authorized to enter the United States, as defined by part 101 of the regulations of U.S. CBP.
  • Production: Activity involving the substantial transformation of a foreign article resulting in a new and different article having a different name, character, and use. Also: a change in the condition of the article resulting in a change in duty classification.
  • Usage-Driven Site: A site used for a single operator.
  • Weekly Entry Procedures: U.S. Customs allows eligible zones to enjoy the efficiency of filing weekly entry for estimated removals of merchandise for domestic consumption.
  • Zone Operator: A company that operates a zone or subzone under the terms of an agreement with the zone grantee, as approved by the Port Director of CBP.
  • Zone Schedule: The zone grantee maintains a schedule that includes the zone’s internal rules, regulations, and charges.
  • Zone Status: Merchandise can enter the zone with domestic or foreign status. Domestic status can include foreign-status goods on which duty has been paid and the goods entered for consumption. Foreign status includes privileged foreign, non-privileged foreign, and zone-restricted status.