Foreign-Trade Zones Act of 1934
Foreign-Trade Zones Act of 1934 is the US law, signed June 18, 1934, that authorizes secure sites treated as outside US customs territory, where imported goods can be stored, processed or reexported without paying duty until entry.
What it requires
Zones are approved by the Foreign-Trade Zones Board and supervised by CBP; operators need activation approval, an inventory control and recordkeeping system and admission (e214) and entry filings. Duty is paid only when goods enter US commerce, and none is owed on goods exported or destroyed. Some tariff actions, including the Section 232 metals duties, require privileged foreign status, which fixes duty treatment at admission. Production activity needs separate Board authorization.
Why it matters
Foreign-trade zones let fulfillment operators defer duty until a unit ships to a US customer and avoid it on exports, improving cash flow when tariff rates are high. A 3PL running an FTZ warehouse can hold a brand's imported electronics and file weekly entries covering what actually shipped, while units sent to Canada leave without US duty. Weekly entry also caps merchandise processing fees across many shipments. The tradeoffs are the cost of an approved inventory system and ongoing CBP compliance reviews.
Events
Sources
- 19 U.S.C. Chapter 1A, Foreign Trade Zones law.cornell.edu
- CBP: About Foreign-Trade Zones cbp.gov
Not legal advice.