Top Ten Foreign-Trade Zone Terms

Admit
Alternative Site Framework
Board Order
Foreign-Trade Zones Board
General-Purpose Zone
Grantee
Operator
Subzone
User
Zone/Subzone Operation's Agreement / Zone Schedule

Admit:  To bring merchandise into a zone with zone status.  A CBPF 214 is utilized to admit merchandise into the zone.

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Alternative Site Framework (ASF):  A three part application which transforms a general-purpose zone by creating a service area, such as a county or multiple counties, where a “usage-driven” site can be established in thirty (30) days or a traditional “magnet” industrial park site can be established in six (6) to ten (10) months if certain criteria are met.

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Board Order:  This is the official approval by the Foreign-Trade Zones Board for a formal Application.

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Foreign-Trade Zones Board: The Board means the Foreign-Trade Zones Board created by the Act to carry out the provisions thereof.  The Foreign-Trade Zones Board shall consist of the Secretary of the Department of Commerce, who shall be the chairman, and the Secretary of the Treasury.  (15 C.F.R. Section 400.2(b)). The day-to-day operation is under the authority of the Executive Secretary, Mr. Andrew McGilvray.

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General-Purpose Zone:  An area authorized by the Foreign-Trade Zones Board with a legal description that is considered outside the Customs territory of the United States.  Foreign merchandise may be admitted to the area without the payment of U.S. Customs duties and taxes or the imposition of U.S. quotas; domestic merchandise is allowed in the area.  No U.S. Customs duties, taxes, or quotas apply if the merchandise is exported. U.S. Customs duties, taxes, and quotas are applicable if the merchandise is imported into U.S. Customs territory either on the basis of the imported merchandise or the finished product, depending on the zone status designation.  By definition, the facility is open to use by multiple business firms for activity that does not rise to the level of production.

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Grantee:  An organization to which the privilege of establishing, operating, and maintaining a foreign-trade zone has been granted by the Foreign-Trade Zones Board.  Grantees may be either public entities or private not-for-profit corporations organized for the purpose of establishing a zone project.  Examples of public entities that might receive an FTZ grant include:  a political subdivision (including a municipality), a public agency, or a corporate municipal instrumentality of one or more states.  Qualified private corporations must be chartered for this purpose under a law of the state in which the zone is located.

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Operator:  The foreign-trade zone may be managed by the Grantee, a firm that oversees one or multiple zone users, or each firm may be its own foreign-trade Zone Operator.  The term Zone Operator shall apply to both general-purpose zones and subzones.  The zone or subzone operatormay be an organization, corporation, partnership, or person that operates under the terms of an agreement with the Zone Grantee. The Operator must have a CBP FTZ Operator's Bond and must be approved by CBP. There may also be multiple Zone Operators operating under the terms of agreement with the Zone Grantee.

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Subzone: A special-purpose zone established as part of a zone project for a limited purpose that cannot be accommodated within an existing zone.  The term ”zone” also applies to a subzone, unless specified otherwise herein.  Foreign merchandise may be admitted to the area without the payment of U.S. Customs duties and taxes or the imposition of U.S. quotas.  Domestic merchandise is allowed in the area.  No U.S. Customs duties, taxes, or quotas apply if the merchandise is exported U.S. Customs duties, taxes, and quotas are applicable if the merchandise is imported into U.S. Customs territory either on the basis of the imported merchandise or the finished product, depending on the zone status designation. 

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User:  A person or firm using a zone for storage, handling, or processing of merchandise.  The Operator may authorize a User to maintain its individual inventory control and record keeping systems and procedures manual.  However, the Operator will remain responsible to Customs and liable under its bond for supervision, defects in, or failures of the systems.

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Zone/Subzone Operations Agreement / Zone Schedule:  The agreement between the Zone Operator and the Zone User, or the Zone Grantee and the Zone Operator describing rights, responsibilities, and financial considerations. The Zone Schedule is the mandatory document that includes rules and regulations and all fees charged by the Foreign-Trade Zone.

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