Understanding the Foreign Trade Zones Board: Authority and Functions

Definition & Meaning

The Foreign Trade Zones Board is a federal board established under the Foreign-Trade Zones Act of 1934. Its primary role is to review and approve applications for the creation and operation of foreign-trade zones, which are designated areas where goods can be imported, handled, and processed without the usual customs duties. The Board ensures that these zones serve the public interest and regulates their administration, including the rates charged by zone grantees. Before any merchandise can enter a foreign-trade zone, it must be activated and approved by Customs and Border Protection (CBP).

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Real-world examples

Here are a couple of examples of abatement:

Example 1: A manufacturing company applies to the Foreign Trade Zones Board to establish a foreign-trade zone to reduce tariffs on imported components. The Board reviews the application and grants approval, allowing the company to import goods duty-free while they are processed in the zone.

Example 2: A logistics firm operates a foreign-trade zone that facilitates the storage and distribution of imported goods. The Board inspects the operations to ensure compliance with regulations and reviews the firm's annual reports.

Comparison with related terms

Term Definition Difference
Foreign Trade Zone A designated area where goods can be imported and processed without customs duties. The Board oversees the establishment and regulation of these zones.
Subzone A specific area within a foreign-trade zone with distinct operational rules. Subzones require separate approval from the Board for specific activities.

What to do if this term applies to you

If you are considering establishing a foreign-trade zone, start by reviewing the requirements set forth by the Foreign Trade Zones Board. You may want to consult with a legal professional to ensure compliance with all federal regulations. Additionally, explore US Legal Forms for templates that can assist you in the application process, making it easier to navigate the necessary legal steps.

Quick facts

  • Jurisdiction: Federal
  • Typical fees: Varies by application and operational costs
  • Possible penalties: Fines for non-compliance with the Act

Key takeaways

Frequently asked questions

A foreign-trade zone is a designated area where goods can be imported and processed without paying customs duties until they leave the zone.