How Do
Foreign-Trade
Zones Work?
The Foreign-Trade Zone program empowers U.S.-based companies to compete in the global marketplace by eliminating the advantages of operating overseas.
FTZs support global business while bolstering the American economy.
International operations often save money on Customs duties by importing the finished product — instead of raw materials and components. This puts U.S.-based manufacturers at a disadvantage, forcing them to pay more to create the same product.
Congress passed The Foreign-Trade Zone Act to solve this problem, creating designated zones where import-export businesses can reduce, defer, and even eliminate duty costs. These FTZs can save you both time and money, while supporting American jobs and attracting international business to the United States.
How Are Foreign-Trade Zones Structured?
Foreign-trade zones are approved and designated by the U.S. Department of Commerce, which then grants a local organization the authority to administer the zone on their behalf. These grantees are typically associated with a Customs port of entry, such as your local seaport or airport.
U.S. Customs &
Border Protection
While operating in an FTZ affords you many privileges, all zone activity remains under the supervision of U.S. Customs & Border Protection and must comply with their regulations.
FTZ Grantees
FTZ Grantees are responsible for promoting the FTZ program to companies in their service area, as well as sponsoring applications to become a designated FTZ site. The Indianapolis Airport Authority is the Grantee for Central Indiana.
Zone Users vs.
Zone Operators
Every company that does business in an FTZ is known as a Zone User. But if your company runs an FTZ site, you are also the Zone Operator responsible for managing the site and reporting to Customs.
Becoming A Zone User
If you’re interested in doing business at an FTZ, it’s easy to get in the zone! Any non-retail operation in Indiana can access the benefits of the Foreign-Trade Zone program.
Whether you’re a manufacturer or a distributor, you can apply to make your facility a designated FTZ site. Simply submit a Request for Designation to your local Grantee to begin the application process under the Alternative Site Framework.
Designation
Application
Activation
The Alternative Site Framework (ASF) is a modernized approach to FTZ designation that makes the application process faster, easier, and cheaper. This framework allows grantees to sponsor a site application anywhere in their approved service area.
Indiana is one of only five states that are entirely ASF-approved, which means you can establish an FTZ anywhere across our 92 counties.
Activating Your Foreign-Trade Zone
After your FTZ application has been approved, the next step is activating your site. During this phase, you will train your security staff, set up your FTZ inventory software, and implement all necessary Customs procedures.
Throughout the process, you will work closely with U.S. Customs & Border Protection (CBP) to ensure that your FTZ complies with U.S. laws and regulations. CBP is responsible for setting your bond rate and supervising all zone activity — and they will only allow you to begin operations once you meet their security standards.
If you plan to use your FTZ for manufacturing, you will also need approval from the FTZ Board to engage in any transformative production activity. This application for Production Authority must be approved before you can fully activate your site.
Collaborating With Customs Can Help:
Collaborating With Customs Can Help:
Enhance Security
Expedite Clearance
Ensure Compliance
Maintaining Your FTZ Status
INzone Is Here To Help
Operating a foreign-trade zone is an ongoing process that requires precision and diligence. Every FTZ site must submit an annual report on their activity and be prepared for periodic audits by U.S. Customs & Border Protection.
Fortunately, INzone is your one-stop shop for FTZ support in Central Indiana! We provide assistance to all of our local Zone Users, allowing you to submit questions and receive confidential answers from a professional FTZ consultant.
We also offer FREE bi-annual audit support to ensure you’re using your FTZ correctly, before Customs performs an audit of their own.
Learn how INzone can help you!