HISTORY OF FOREIGN-TRADE ZONES
In 1934, the U.S. Congress passed the
Foreign-Trade Zones Act "to expedite and encourage foreign
commerce." The intent of the Act was to stimulate
international trade and create jobs and investment in the U.S.
The Act sets out the rules for the authorization of zones and
the regulation of activities in FTZs. When the Act was
originally passed, FTZs were envisioned as centers for storage
and distribution. Since 1934, Congress has passed several
amendments to the legislation to enhance the utility of the
Foreign-Trade Zones program. In addition, several
regulatory developments have occurred, which evolved the FTZ
program. These legislative and regulatory highlights
include:
1950 - an amendment to the Foreign-Trade Zones
Act that allowed manufacturing and exhibition.
1980 - and amendment to the U.S. Customs Service
Regulations that excluded processing costs including labor,
overhead and profit occurring in FTZs from valuation for
purposes of calculating Customs duty.
1988 - an amendment to the Foreign-Trade Zones
Act that acknowledged "productibility" as an acceptable Customs
accounting method for the petroleum refining industry.
1995 - finalization of the Customs FTZ Oil
Refinery Regulations standardizing the treatment of petroleum
refinery foreign-trade zones.
1996 - H.R. 3815 clarifying that the merchandise
processing fee (MPF) is to be assessed only against foreign
status merchandise entered into the U.S. Customs territory from
a foreign-trade zone.
1996 - H.R. 3815 allowed for the deferral of
duty on foreign production equipment admitted to teh zone until
such equipment is completely assembled, installed, tested, and
turned on for use in full-scale production.
2000 - Trade and Development Act of 2000
provided for the weekly entry of merchandise for all types of
foreign-trade zones.
STATISTICS OF FOREIGN-TRADE ZONES
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More than 2,300 firms use FTZs.
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More than 330,000 people are employed at
facilities operating under FTZ status.
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Approximately 62% of merchandise received in
FTZs is domestic. Domestic status merchandise is mainly
merchandise of domestic origin but includes some foreign-origin
goods on which Customs entry and duty payments have been made
prior to zone admission.
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The total value of merchandise moving through
FTZs amounts to more than $226 billion annually.
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Exports from FTZs exceed $15 billion annually.
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All 50 states, plus Puerto Rico, have
established foreign-trade zones.
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There are more than 256 approved general-purpose
zones and more than 448 approved subzones in the United States.
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last update:
02/11/08
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