|G l o s s a r y o f F T Z T e r m s
- Activation - Once a zone or subzone site is approved by the FTZ Board, an
application must be made to the local CBP office, with the concurrence of the FTZ grantee, to operate
the zone/subzone site (or portion thereof) under FTZ procedures. This CBP process is known as
activation generally includes steps such as background checks, a written procedures manual, posting a
bond with CBP, as well as a review of the security of the site(s) and the inventory control methods.
- Activation Limit - The size of the physical area of a particular zone or subzone authorized by the Board to be simultaneously in
activated status with CBP pursuant to 19 CFR 146.6. The activation limit for a particular zone/subzone is a figure explicitly specified by the
Board in authorizing the zone (commonly 2,000 acres) or subzone or, in the absence of a specified figure, the total of the sizes of the
approved sites of the zone/subzone.
- Adjacency - According to Section 400.11, general-purpose zone
sites must be within 60 miles or 90 minutes driving time of a U.S. Customs and Border Protection Port of Entry.
- Admit, Admission - The U.S. Customs and Border Protection terms describing the shipment of
merchandise into U.S. foreign-trade zones under CBP supervision (19 CFR 146.1).
- Alternative site framework (ASF) - An optional approach to designation and management of zone sites allowing greater flexibility
and responsiveness to serve single-operator/user locations. The ASF was adopted by the Board as a matter of practice in December 2008
(74 FR 1170, January 12, 2009; correction 74 FR 3987, January 22, 2009) and modified by the Board in November 2010
(75 FR 71069, November 22, 2010).
- Articles Consumed - Interpretation of the FTZ Act holds that all
materials to be consumed in manufacturing or processing operations within a zone must
first be entered for consumption with duties paid.
- Board - See Foreign-Trade Zones Board
- CBP - U.S. Customs and Border Protection of the Department of Homeland Security
- Deactivation - A previously activated general purpose zone or subzone site which
no longer has local CBP authorization for activity under FTZ procedures.
- Deleted - A site or portion of a site that once held zone status, but has been
removed from the zone through an administrative minor modification by the FTZ Board staff or an FTZ
Board application process.
- Domestic origin/duty paid - Describes merchandise that is mainly of domestic
origin but also includes foreign-origin merchandise on which customs entry and duty payments have
been made prior to admission to the zone site.
- Domestic status - Used synonymously with Domestic origin/duty paid
(see above). Domestic status is the customs status (19 CFR 146.43) for domestic origin and duty paid
foreign origin zone merchandise.
- Entry for Consumption - The term that describes the general customs
process of filing the appropriate CBP documents (including duty evaluation) that allows
merchandise to be brought into the commerce of the U.S. (19 CFR 141). With respect to foreign-trade
zones, this process occurs when merchandise is shipped from the zone into U.S. commerce.
- Exports - The category of merchandise that is forwarded from zone
sites to destinations in foreign countries.
- Foreign-Trade Zone - (FTZ or zone) includes one or more restricted-access sites, including subzones, in or adjacent (as defined by
Sec. 400.11(b)(2)) to a CBP port of entry, operated as a public utility (within the meaning of Sec. 400.42) under the sponsorship of a zone
grantee authorized by the Board, with zone operations under the supervision of CBP.
- Foreign-Trade Zones Board - Consists of the Secretary
of Commerce (chairman) and the Secretary of Treasury, or their designated
- Foreign Status - Describes zone merchandise admitted to a zone site
under CBP supervision that is normally of foreign origin. Such merchandise is admitted to zone sites
without being subject to formal customs entry procedures and payment of duties, unless and until the
foreign merchandise enters customs territory for domestic consumption. Foreign status
merchandise is further categorized by CBP as either Non-Privileged Foreign or Privileged Foreign
- Forwarded - The category of merchandise that is shipped from
or forwarded from zone sites after release by CBP. This category includes merchandise
that is forwarded to destinations in the U.S. market as well as merchandise that is
exported--that is, forwarded to markets in foreign countries.
- Grant of Authority - A document issued by the Board that authorizes a zone grantee to establish, operate and maintain a zone, subject
to limitations and conditions specified in this part and in 19 CFR part 146. The authority to establish a zone includes the responsibility to
- Grantee - See Zone Grantee
- Inactive - A general-purpose zone or subzone site that has been approved by the FTZ
Board, but is not “activated” with CBP. No activity under FTZ procedures is occurring
at an inactive site.
- Lapse Provision - A grant of authority for a
zone or a subzone shall lapse unless the zone project, or subzone facility,
is activated, pursuant to 19 CFR Part 146, and in operation not later than
five years from the date of the Board order.
- Magnet site - A site intended to serve or attract multiple operators or users under the ASF.
- Merchandise Received - Involves merchandise
received into activated FTZ space under FTZ procedures by foreign-trade
zones and subzones. It includes foreign status merchandise and domestic
- Modification - A major modification is a proposed change to a zone that requires action by the FTZ Board; a minor modification is a
proposed change to a zone that may be authorized by the Executive Secretary.
- Non-Privileged Foreign (NPF) Status - One of the
customs categories of foreign status merchandise (See 19 CFR 146.42). Such
merchandise is evaluated based on its condition at the time it is shipped
from the zone to the U.S. market and entered for consumption by CBP.
- Operator - See Zone Operator
- Person - Includes any individual, corporation, or entity.
- Port of Entry - A port of entry in the United
States, as defined by part 101 of the regulations of U.S. Customs and Border Protection (19 CFR part 101),
or a user fee airport authorized under 19 U.S.C. 58b and listed in part 122 of
the regulations of CBP (19 CFR part 122).
- Privileged Foreign (PF) Status - One of the customs
categories of foreign status merchandise (See 19 CFR 146.41). Such merchandise
maintains its status based on its condition when it was admitted to the zone.
Thus, when the merchandise is shipped from the zone to the U.S. market and
entered for consumption by CBP, it is evaluated based on the time-of-admission
condition even though it may have undergone a transformation in the zone.
- Production - Activity involving the substantial transformation of a foreign article resulting in a new and different article having
a different name, character, and use, or activity involving a change in the condition of the article which results in a change in the customs
classification of the article or in its eligibility for entry for consumption.
- Service Area - The jurisdiction(s) within which a grantee proposes to be able to designate sites via minor boundary modifications
under the ASF.
- Subzone - A site (or group of sites) established for a specific use.
- Terminated - If a general purpose zone or subzone is no longer needed, the grantee
can request that the FTZ Board remove zone/subzone designation. Upon such action by the FTZ Board,
the zone or subzone is then considered terminated.
- Usage-Driven Site - A site tied to a single operator or user under the ASF.
- User - See Zone User
- Zone - A foreign-trade zone (see above) established
under the provisions of the FTZ Act and regulations. The term also includes
subzones, unless the context indicates otherwise.
- Zone Grantee - The corporate recipient of a grant of
authority for a zone project. The term "grantee" means "zone grantee" unless
- Zone Operator - A corporation, partnership,
or person that operates a zone or subzone under the terms of an agreement
with the zone grantee (or third party on behalf of the grantee) with the concurrence of
the Port Director of CBP.
- Zone Restricted Status - Merchandise in this status is
to be exported or destroyed. Zone-restricted status merchandise can
be entered into U.S. customs territory only if the FTZ Board finds that entry would be in the public interest.
- Zone Schedule - To be kept by the zone grantee, the
zone schedule includes the internal rules and regulations of the zone, as
well as a statement of the rates and fees charged to zone users.
- Zone Site (Site) - A physical location of a zone or subzone. A site is composed of one or more generally contiguous parcels of
land organized and functioning as an integrated unit, such as all or part of an industrial park or airport facility.
- Zone Status - Merchandise can enter the zone
in either domestic or foreign status. Domestic status can include foreign status
goods where the duty has been paid and the goods entered for consumption. Foreign
status includes privileged foreign, non-privileged foreign and zone-restricted status.
- Zone User - A party using a zone under agreement with a zone operator.