What Is a Foreign Trade Zone?

A Foreign Trade Zone (FTZ) is a physical location within a United States customs territory, where merchandise receives the same treatment as if it were outside the commerce of the United States. Merchandise, while located in the FTZ, is not subject to customs duties, tariffs and taxes. U.S. manufacturers can import foreign-sourced parts or materials into the FTZ without being responsible for paying duties on them.

While in an FTZ, merchandise may be assembled, exhibited, cleaned, manipulated, manufactured, mixed, processed, relabeled, repackaged, repaired, salvaged, sampled, stored, tested, displayed, and destroyed. If the merchandise never enters the U.S. commerce, then no U.S. duties or taxes are ever paid on those items.

Distributors also benefit because the FTZ allows for direct delivery from ports into the zone, saving time, money, and customs processing fees.

Merchandise can also be moved from one FTZ or another without being subject to customs duty via a process called Zone-to-Zone Transfer.

What is LVEDC's Role?

As a grantee for the Lehigh Valley’s FTZ program, LVEDC is responsible for managing the zone and sponsoring applications from companies that want to establish an FTZ for their business.

To learn more about the FTZ, contact Stephanie Wean, LVEDC Program Administrator.