Created in 1932 by the U.S. Department of Commerce to expedite and encourage foreign commerce, Foreign Trade Zones (also known as FTZs,) are federally designated areas, which are legally deemed to be outside of the U.S. Customs territory. At Foreign Trade Zones, normal regulatory requirements do not apply as they would inside the U.S. commerce, thus companies are able to operate without being subjected to federal entry procedures or federal excise taxes, while also minimizing involvement from regulatory agencies such as Federal Drug Administration (FDA,) Federal Communications Commission (FCC,) Environmental Protection Agency (EPA,) and Department of Transportation (DOT,) among others. Foreign and domestic merchandise may be admitted into Foreign Trade Zones for operations such as storage, exhibition, assembly, manufacture, redistribution, processing, and more.


Foreign Trade Zone

  • Legally deemed outside of the US Customs territory
  • No Formal declaration to customs nor regulatory agencies
  • No time limits on merchandise
  • Commingling bonded and domestic merchandise without segration
  • No direct identification necessary

Bonded Warehouse

  • Within the US Customs territory
  • formal declaration to customs and all regulatory agencies
  • Time limit of 5 years. Products not approved for US should not be warehoused
  • Physical segregation bonded and domestic merchandise required
  • Direct identification necessary