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 Foreign Trade Zone (FTZ)

Enacted as the Foreign Trade Zones Act of 1934, the Foreign Trade Zone (FTZ) is a federally authorized security area in which both domestic and international commercial commodities are handled by U.S. Customs as though they were outside the United States. 

To postpone payment of duties and taxes, or completely avoid incurring duties and taxes in the event of re-exportation of goods, numerous companies use FTZs as a way to deem the goods as never having entered the U.S. consumption area. The FTZs are categorized into two types: 

1) General Purpose Zones, which function as public service facilities delivering a range of services to multiple users.

2) Special Purpose Subzones, which are a single-use facility for which the general zone cannot serve.

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