Approval by the grantee and U.S. Customs Service Port Director for operations to begin, thereby allowing the admission and handling of merchandise in the zone status.


The physical arrival of goods into a zone in a specified zone status with the appropriate approvals of the zone grantee and the U.S. Customs and Border Protection. The word “admission” is used instead of “entry” to avoid confusion with Customs entry processes under Parts 141-144 of the Customs Regulations.

Customs Territory

The territory of the United States in which the general tariff laws of the U.S. apply. The U.S. Customs Territory includes the States, the District of Columbia and Puerto Rico, minus any areas within the boundaries of foreign-trade zones.


Voluntary discontinuation of the activation of an entire zone or subzone by the grantee or operator. (Discontinuance of the activated status of only part of a zone is an alteration).

Direct Delivery

A procedure for the delivery of merchandise to a zone without prior application and approval from Customs. The procedure is designed for low risk, repetitive shipments whose delivery is under the control of the operator. Direct delivery authorization must be obtained from the Customs Port Director.


Import duties or taxes repaid by the government, in whole or in part, when the imported goods are exported or used in the manufacture of exported goods.


Notification to Customs of the arrival of imported goods in the Customs territory of the United States. Merchandise withdrawn from a zone for consumption in the U.S. is entered when it is removed from the zone. Goods brought into a zone are admitted.

General-Purpose Zone

A general purpose zone is established for multiple activities by a number of users. Storage, distribution, testing, repackaging, and repair are some of the possible activities in a general-purpose zone. Processing or manufacturing in a GPZ requires the permission of the Foreign Trades Zones Board.

Inverted Tariff Structure

Where imported parts are dutiable at higher rates than the finished product into which they are incorporated.


A corporation to which the privilege of establishing, operating, and maintaining a foreign-trade zone has been granted by the Foreign-Trade Zones Board. Grantee corporations must be either public corporations including a state, political subdivision (including a municipality), public agency, corporate municipal instrumentality of one or more states or private corporations organized for the purpose of establishing a zone project. Qualified private corporations must be charted for this purpose under a law of the state in which the zone is located.

Harmonized Tariff Schedule of the United States (HTSUS)

Published by the U.S. International Trade Commission, the HTSUS is used in the classification of imported merchandise for rates of duty and statistical purposes.

Magnet Site

A site intended to draw future users to that location/industrial park.


As defined in Section 562 of the Tariff Act, processing wherein merchandise is packed, unpacked, repacked, cleaned, sorted, graded or otherwise changed in condition. The precise distinction between manipulation and manufacturing is subject to interpretation and enjoys a long history of case law.


The FTZ Board has defined manufacturing as any process that results in a change in Customs classification of the merchandise, and therefore, requires prior clearance from the Board pursuant to the manufacturing conditions in specific foreign-trade zone grants.


Foreign-Trade Zone merchandise includes goods, wares, and chattels of every description. Not included are prohibited merchandise, building materials, and supplies for use in the operation of a zone. The different categories of merchandise within a zone are as follows:

  • Domestic Status (D): Status of zone merchandise grown, produced, or manufactured in the United States on which all internal revenue taxes have been paid. Also includes the status of zone merchandise previously imported on which all applicable duties and internal revenue taxes have been paid.
  • Foreign Status: Status of zone merchandise grown, produced, or manufactured outside the United States on which no taxes or applicable duties have been paid.
  • Non-Privileged Foreign Status (NPF): Status of zone merchandise not previously cleared by Customs that is appraised in the condition of the merchandise at the time it enters the Customs territory upon exiting the zone. NPF status may be changed upon approval from Customs, provided the merchandise is still in the same condition as when admitted to the zone. While in the zone, NPF status merchandise can be manipulated or manufactured into another commercial item with a different tariff classification. NPF status allows zone users to pay duty at the rate of the finished product produced in the zone.
  • Privileged Foreign Status (PF): Zone status whereby merchandise is classified and appraised, with duties and taxes determined, at the time the status is elected. Privileged foreign status cannot be changed once chosen.
  • Zone Restricted Status (ZR): Status of zone merchandise transferred to a zone for the sole purpose of exportation or destruction. Zone restricted merchandise cannot be changed or brought into U.S. Customs territory without the specific permission of the Foreign-Trade Zones Board on a case-by-case basis.


A corporation, partnership, or person that operates a zone or subzone under the terms of an agreement with the grantee. A grantee may act as its own operator.

Operator’s Bond

A bond submitted to Customs on Customs Form 301 to assure compliance with the Customs Regulations as set forth in 19 CFR 113.73.

Port of Entry

A place designated by the U.S. Government at which a Customs officer is assigned with authority to accept entries of merchandise, collect duties, and enforce the various provisions of the Customs laws.

Service Area

The designated area approved by the FTZ Board. Typically, the area is made up of one or more specified counties which have each elected to be served by a specific Grantee.


A special-purpose zone established as part of a zone project for a limited purpose that cannot be accommodated within an existing General Purpose Zone. Subzones must be sponsored by the grantee of a General Purpose Zone.

Usage-Driven Site

A site that is designated to meet a specific user’s need. The site needs to be within the Grantee’s approved Service Area.


A person or company using a zone for storage, handling, or processing of merchandise. An operator may authorize a user to maintain its own inventory system and procedures manual. However, the operator remains responsible to Customs for inventory control unless the user posts its own operator’s bond.

Weekly Entry Procedures

A Customs procedure that permits zones and subzones to file a weekly entry on Customs Form 3461 for the estimated removals of merchandise destined for domestic consumption during the following business week. Once the Port Director has approved the entry, the operator may ship the products all week up to the quantity estimated.

Zone Lot

A collection of merchandise maintained under an inventory control method based on specific identification of merchandise admitted into a zone by lot and lot number (ZLN).

Zone Status

The status of merchandise admitted to a zone, i.e. domestic (D), non-privileged foreign (NDF), privileged foreign (PF), or zone restricted (ZR).