A   B   C   D   E   F   G   H   I   J   K   L   M    N   O   P   Q   R   S   T   U   V   W   X   Y   Z

A

Activation
Approval by the Grantee and U.S. Customs for operations to begin and for the administration and handling of merchandise in zone status. [19 CFR § 146.1(b)]

Admission
The physical arrival of goods into a zone in a specified zone status with the approval of the U.S. Customs Service. The term “admission” is used instead of “entry” to avoid confusion with Customs entry processes under Parts 141-144 of the Customs Regulations.

Application
"An application to establish a Foreign Trade Zone or subzone that must address the items delineated in 15 CFR § 400.24 or § 400.25, and that consists of a transmittal letter, an executive summary, and five exhibits."

Audit-Inspection Procedures
"These procedures are designed to meet the requirements of the U.S. Customs Service Regulations (T.D. 86-16) for Audit-Inspection Procedures in Foreign Trade Zones. Under the Regulations, the Operator maintains the inventory records. The U.S. Customs Service is relieved of the duty of actually keeping the records, but maintains assurance of the systems accuracy by selective examinations of merchandise, and spot checks and audits of zone facilities."

Authorized Inventory Method
"A Customs authorized inventory method other than a lot system (specific identification of merchandise); e.g., First-In-First-Out (FIFO). No lot file is required but the Operator shall maintain a file of all CF214s in sequential order. [19 CFR § 146.37(2)]"

B

Bond
"A surety bond is a contract whereby one party, the surety, guarantees the performance of a second party, the principal, for the benefit of a third party, the obligee (the Federal government, in the case of Customs bonds). Should the principal fail to perform his agreement with the obligee, the surety will be required to pay liquidated damages, and will have the right to obtain reimbursement from the defaulting principal. “Customs bonds” - all bonds required to be given under Customs laws or regulations shall be known as Customs bonds. [19 CFR § 113.4(a)]"

Boundary Modifications
"A change of the area of an established zone made by proper application. [FTZ Manual, Section 4.4] Boundary modifications may be minor or major; zone expansions may be considered major boundary modifications."

Business Week
The User’s business week for FTZ weekly entry reporting purposes.

Business Year
September 30th is year-end for Foreign-Trade Zones Board Annual Report purposes coinciding with the government’s fiscal year. The User’s business year for Annual Reconciliation and Systems Review purposes may be different.

C

Commingling
"Physically combined or mixed. [19 CFR § 102.1(b)] Regarding fungible goods from different countries, which are commingled, the country or countries of origin may be determined on the basis of an inventory management method of the Customs regulations. [19 CFR § 102.12(b)]"

Consumption Entry
An entry for the transfer of merchandise from a zone to the Customs territory for consumption in the United States.

Control File
A file established for each CF214 Control Number/Admission Number containing source documents related to that number.

Country of Origin
"Generally, the country of origin of a good is the country in which (1) the good is wholly obtained or produced; (2) the good is produced exclusively from domestic materials; or (3) each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in 19 CFR §102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. [19 CFR §102.11]"

Customs Modernization Act
A 1993 law that expanded statutory recordkeeping requirements for importers and their agents. The law fundamentally changed U.S. Customs enforcement methodology from a transaction-by-transaction approach to a post entry audit approach. The new method of enforcement is similar to the Internal Revenue Service (IRS) and places the burden for valuation and classification on the importer.

Customs Territory of the United States
"The territory of the U.S. in which the general tariff laws of the U.S. apply. “Customs territory of the United States” includes only the States, the District of Columbia, and Puerto Rico. [General Note 2, Harmonized Tariff Schedule of the United States (19 U.S.C. 1202)], [19 CFR § 146.1(b)]"

D

Destruction
"Destruction means the complete destruction of articles or merchandise to the extent that they have no commercial value. Any residue from the destruction within a zone, which is determined to be without commercial value, may be removed to Customs territory for disposal. [19 CFR 146.52(e)]"

Direct Delivery
A procedure for delivery of merchandise to a zone without prior application and approval on CF214; designed for shipments where ordering and timing are under the control of the Operator. Approval to utilize direct delivery must be obtained from the Port Director.

Domestic (DOM) Status Merchandise
"Merchandise that has been (i) grown, produced or manufactured in the U.S. and not exported there from, (ii) previously entered into the commerce of the United States as duty and tax free or (iii) previously imported into Customs territory and properly released from Customs custody. This means imported merchandise on which all necessary duties and taxes, if applicable, have been paid, and if upon which no drawback has been claimed, is considered Domestic merchandise when admitted to a foreign-trade zone. [19 CFR § 146.43]"

Dutiable Value
"For the material imported from a foreign country, the price actually paid or payable for the foreign sourced material in the transaction that caused the material to be admitted into the zone, less, if included, international shipment and insurance costs and U.S. inland freight costs. The dutiable value is used to calculate duty payments. 19 CFR 146.65(b)(2) The dutiable value of the merchandise manufactured (finished product) in the zone is the sum of the dutiable values of the foreign non-duty paid merchandise that is in the finished product."

Duties
"A tax on imports. (In a foreign-trade zone, duties are not payable until the merchandise exits the zone and is entered into the commerce of the United States.)"

Duty Drawback
"A refund or remission, in whole or in part, of a Customs duty, internal revenue tax, or fee lawfully assessed or collected because of a particular use made of the merchandise on which the duty, tax, or fee was assessed or collected. [19 CFR § 191.2(i)]"

E

Entry
"To bring merchandise into the Customs territory of the United States. Documentation required by 19 CFR § 142.3 to be filed with the appropriate Customs officer to secure the release of imported merchandise from Customs custody, or the act of filing that documentation. [19 CFR § 141.0a(a)]"

Estimated Weekly Entry
"An estimated entry, made on CF3461 and officially accepted, providing the legal permit necessary from Customs to remove merchandise during a business week."

Estimated Weekly Export (Application for Weekly Zone Permit)
"An estimated export, made on CF7512 and officially accepted, providing the legal permit necessary from Customs to remove merchandise during a business week. [19 CFR § 146.68(a)]"

Export
The transportation of merchandise out of the U.S. for the purpose of being entered into the commerce of a foreign country. [19 CFR § 192.1]

F

Foreign Merchandise
"Imported merchandise that has not been released from Customs’ custody into the Customs territory of the United States. This means imported merchandise upon which duty and taxes, if applicable, have not been paid."

Foreign-Trade Zone Regulations
"These regulations are derived from the Foreign-Trade Zones Act of 1934, codified in Title 19, Sections 81a through 81u. This statute is administered through 15 CFR Part 400 and throughout 19 CFR."

FTZ Number
A number assigned by the Foreign-Trade Zones Board at the time of approval of the zone grant.

Fungible Merchandise
"Merchandise that for commercial purposes is identical and interchangeable in all situations. [19 CFR § 191.2(o)] In an FTZ, fungible merchandise may be identified by an inventory method authorized by Customs, which is consistently applied, such as First-In-First-Out (FIFO) and using a unique identifier. [19 CFR § 146.23(2)]"

G

Grant
"A grant to establish, operate, and maintain a Foreign-Trade Zone (FTZ) or a special-purpose FTZ (subzone) awarded by the Foreign-Trade Zones Board to an eligible Grantee."

Grantee
Zone Grantee — "A Grantee is the corporate recipient of a grant of authority for a zone project. [15 CFR § 400.2(r)] A Grantee is a public or private corporation to which the privilege of establishing, operating, or maintaining a foreign-trade zone has been given. [FTZ Manual, Section 3.10]"

H

Harbor Maintenance Fee (HMF)
A port use fee of 0.125 percent of a cargo’s value may be payable by commercial vessels unloading cargo at a port that is authorized to charge HMF. [19 CFR § 24.24(b)(1).] The applicant for admission of cargo unloaded in a foreign-trade zone must pay the HMF due on a quarterly basis. [19 CFR § 24.24(e)(2)(iii)]

I

In-Bond
"Any merchandise, other than explosives and merchandise the importation of which is prohibited, arriving at a port of entry in the United States may be entered, under such rules and regulations as the Secretary of the Treasury may prescribe, for transportation in-bond without appraisement to any other port of entry designated by the consignee, or his agent, and by such bonded carrier as he designates, there to be entered in accordance with the provisions of this chapter. Pursuant to Public Resolution 108, of June 19, 1936, (19 U.S.C. 1551, 1551a) and subject to compliance with all other applicable provisions, the port director, upon the request of the party in interest, may permit merchandise entered and examined for Customs purposes to be transported in bond between ports by bonded cartmen or lightermen duly qualified if the port director is satisfied that the transportation of such merchandise in this manner will not endanger the revenue. [19 CFR § 18.1(b)]"

J [No Entry]

K

[No Entry]

L

[No Entry]

M

Manufacturing
"As defined by the Foreign-Trade Zones Board Regulations means activity involving the substantial transformation of a foreign article resulting in a new and different article having a different name, character, and use. The U. S. Customs Service determines what constitutes manufacturing on a case-by-case basis, distinguishing it from other operations such as manipulation, processing, production and blending. The Foreign-Trade Zones Board definition is much broader and the agency requires that specific prior authorization be obtained for manufacturing operations in the activated zone. [15 CFR 400.2(g)]"

Marking
"Unless excepted by law, every article of foreign origin (or its container), imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Goods leaving a zone for entry into the United States must be properly marked with the applicable country of origin unless excepted under Customs regulations. If an imported article undergoes a substantial transformation while in the foreign-trade zone, that is, such processing that the resultant product is one having a name, character or use differing from that of the article that was admitted into the foreign-trade zone, the final product may no longer be considered to be of foreign origin. Authorization of the use of the legend “Made in USA” is beyond the scope of the U.S. Customs Service; it is within the jurisdiction of the Federal Trade Commission. If no transformation occurs, the requirements of Section 304 of the Tariff Act must be met upon entry of the merchandise into the Customs territory."

Merchandise
"Merchandise includes goods, wares, and chattels of every description except prohibited merchandise. (Building materials, production equipment and supplies for use in operation of a zone may not be considered “merchandise”.) Generally, inventory of merchandise is maintained by the zone user."

Merchandise Processing Fee (MPF)
"Generally, merchandise that is formally entered or released is subject to the payment to Customs of an ad valorem fee of 0.21 percent. The fee shall be due and payable to Customs by the importer of record of the merchandise at the time of presentation of the entry summary and shall be based on the value of the merchandise. Per entry, the ad valorem fee (MPF) shall not exceed $485 and shall not be less than $25. This fee is assessed differently for formal and for informal entries or releases. An ad valorem fee and other charges are applicable according to the provisions of 19 CFR § 24.23."

Mixed Status Merchandise
Foreign Merchandise that has been combined with Domestic Merchandise in the zone is sometimes referred to as Mixed Status Merchandise.

N

Non-Privileged Foreign (NPF) Status Merchandise
"Merchandise subject to tariff classification according to its character, condition and quantity as constructively transferred to Customs territory at the time the entry or entry summary is filed with Customs. In other words, a status of merchandise for tariff purposes that provides for classification and appraisement in accordance with the condition of merchandise when constructively transferred to the Customs territory of the United States. [19 CFR § 146.42 & 146.65] In a zone, NPF merchandise may be changed to Privileged Foreign (PF) before any processing has occurred, at the option of the zone user and with approval by Customs. [FTZ Manual, Section 5.5 and 19 CFR § 146.41(a)] Waste recovered from any manipulation or manufacture of PF merchandise in a zone has NPF status. NPF status is selected when the duty rate of the finished product is lower than the duty rate of the imported foreign components in a manufacturing environment. An entry under TIB may be made for merchandise in PF status that is not composed in part of merchandise in PF status. If quota class, the quota must be open and charged. However, the key date for TIBs is the date of importation, not the date of entry for consumption. Therefore, if the merchandise has been in the zone for longer than 1 year, a TIB entry for NPF status merchandise cannot be made."

North American Free Trade Agreement (NAFTA)
"The trade agreement entered into by Canada, Mexico, and the United States that was implemented on January 1, 1994."

O

Operator
"An Operator is a corporation, partnership, or person that operates a zone under the terms of an agreement with the Grantee."

P

Port Director
"The principal Customs official of a designated port of entry (except for the Headquarters Port). [19 CFR § 101.1] Under certain contexts, refers to whomever the Port Director delegates to act in his or her authority and thus may refer to any Customs officer. [FTZ Manual, Section 1.5]"

Privileged Foreign (PF) Status Merchandise
"Merchandise subject to tariff classification according to its character, condition and quantity at the rate of duty and tax in force on the date of filing the CF214. In other words, a status that, upon proper application and approval anytime preceding manufacture or manipulation within a zone, is granted to an imported input, allowing the zone user the privilege of treating the input, for tariff purposes, as remaining in its original condition at the time of admission to the zone. [19 CFR § 146.41; 146.65; FTZ Manual, Section 5.6] Once established, Privileged Foreign Status cannot be changed except in the case of recoverable waste (see 19 CFR § 146.42). PF merchandise may be exported or withdrawn for supplies, equipment, or repair material of vessels or aircraft without payment of taxes and duties (see 19 CFR § 146.67 & 146.69). If merchandise has already been admitted into the zone in Non-Privileged Foreign Status, Privileged Foreign Status may be obtained by filing a CF214. Application for this status, however, must be filed prior to manipulation or manufacture. Admitted merchandise subject to AD/CVD must be placed in PF status. Merchandise in PF status or composed in part of PF status many not be entered for warehousing from a zone and cannot be placed on a TIB upon removal from the zone. Classification of merchandise subject to a tariff-rate import quota will be made only at the higher non-quota duty rate in effect on the date PF status was granted. Mandatory PF status may be imposed by the FTZ Board as a form to grant restriction to prevent the inverted tariff benefit."

Prohibited Merchandise/Operations
"Merchandise that is prohibited by law to be imported on grounds of public policy or morals, or any merchandise that is excluded from a zone by order of the Board. [19 CFR § 146.1(b)] Books urging treason or insurrection against the U.S., obscene pictures, and lottery tickets are examples of Prohibited Merchandise. Prohibited operations include, but are not limited to, manufacturing of alcohol products, tobacco products, firearms, or sugar. No operation involving the manufacture of any article provided for in paragraph 367 or 368 of the Tariff Act of 1930 shall be permitted in a zone. Paragraphs 367 and 368 cover watches and other timekeeping devices now covered by Chapter 91 HTS. See Foreign-Trade Zone Manual Section 11.5 for more specific information. Any activities determined by federal, state, or local authorities to be detrimental to the public health and safety, and retail trade are not permitted in a zone."

Q

Quotas
Absolute (or quantitative) — "Permit a limited number of units of specified merchandise to be entered or withdrawn for consumption during specified periods. Once the quantity permitted under the quota is filled, no further entries or withdrawals for consumption of merchandise subject to quota are permitted. Some absolute quotas limit the entry or withdrawal of merchandise from particular countries (geographic quotas) while others are global quotas and limit the entry or withdrawal of merchandise not by source but by total quantity. [19 CFR § 132.1(a)] Tariff-rate: Permit a specified quantity of merchandise to be entered or withdrawn for consumption at a reduced duty rate during a specified period. [19 CFR § 132.1(b)]"

R

Restricted Merchandise/Operations
"Merchandise that may not be authorized for delivery from Customs’ custody without a special permit, or a waiver thereof, by an agency of the U.S. Government. Also, the Foreign-Trade Zones Board and U.S. Customs Service have restricted certain operations involving the following products: steel, textiles, television tubes, sugar. Operations involving orange juice may be restricted. The restrictions may vary on a case-by-case basis."

S

Subzone
"A special-purpose zone established as part of a [foreign-trade] zone project for a limited purpose that cannot be accommodated within an existing [foreign-trade] zone. The term “zone” also applies to a subzone [in 19 CFR § 146], unless specified otherwise. [19 CFR § 146.1(b); 15 CFR § 400.2(o)]"

T

Time of Admission
"Generally, merchandise is admitted to a zone upon the Port Director’s signature of an application for admission, i.e., the filing of the CF214. [FTZ Manual, Section 6.4]"

Time of Entry
"Generally, merchandise is entered into the Customs territory of the United States when the appropriate Customs officer authorizes the release of the merchandise or any part of the merchandise covered by the entry documentation. [19 CFR § 141.68(a)]"

Total Zone Value
"The total zone value shall be that price actually paid or payable to the zone seller in the transaction that caused the merchandise to be transferred from the zone. Where there is no price paid or payable, the total zone value shall be the cost of all materials and zone processing costs related to the merchandise transferred from the zone. [19 CFR § 146.65(b)(1)]"

Transportation and Exportation (T&E)
"An indirect exportation. A transfer to the Customs territory for transportation to and exportation from a different port by a bonded carrier. [FTZ Manual, Section 9.12(d)]"

U

Unique Identification Number (UIN)
"A material UIN will be the product identification number for a specific material. “Unique identifier” means the numbers, letters, or combination of numbers and letters that identify merchandise admitted to a zone with zone status. [19 CFR § 146.1(b)] The UIN will be used in the FTZ accounting system and for inventory purposes. The relief of merchandise from a UIN layer in the FTZ accounting system is what triggers duty payment for companies operating in an FTZ."

User
"A person or firm using a zone for storage, handling, or processing of merchandise. The Operúator may authorize a User to maintain its individual inventory control and recordkeeping 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 unless the User posts its own FTZ Operator’s Bond and becomes an Operator."

V

[No Entry]

W

Waste and Scrap
"That which must be measured (in addition to by-products) to account for the difference between input and output to and from a zone. Waste can be recovered and attributed to Non-privileged status under certain circumstances. [FTZ Manual, Section 5.5(a)(2)]"

Weekly Entry Summary
"The entry document, executed on CF7501, of the actual entries into the Customs territory of the U.S. The CF7501 will identify the actual quantity, value, and HTS for the product entered. “Entry Summary” means any other documentation necessary to enable Customs to assess duties and collect statistics on imported merchandise, and determine whether other requirements of law or regulation are met. [19 CFR § 141.0a(b)]"

Weekly Export Entry
"The statement of merchandise exported under an approved weekly permit. The statement shall be filed with Customs by the close of business on the second working day of the week following the week designated on the permit and will list each CF7512 by its unique I.T. number. The statement will also provide a reconciliation of the quantities on the weekly permit with the manifested quantities on the individual CF7512s submitted to Customs, as well as an explanation of any discrepancy. 19 CFR § 146.68(c)"

X

[No Entry]

Y

[No Entry]

Z

Zone Expansion
An enlargement of the physical dimensions of the approved zone. Expansions may be judged major or minor. [15 CFR § 400.26]

Zone Inventory System (ZIS)
Automated or non-automated inventory control and recordkeeping system used for operation of a zone.

Zone Restricted (ZR) Status Merchandise
"Merchandise taken into a zone for the sole purpose of exportation, destruction (except destruction of distilled spirits, wines, and fermented malt liquors), or storage will be given Zone Restricted status on proper application. ZR status can be requested at any time that the merchandise is located in the zone but cannot be abandoned once granted. Merchandise in Zone Restricted status may not be removed to Customs territory for domestic consumption except where the Board determines the return to be in the public interest. [19 CFR § 146.44(a)] ZR merchandise may be considered exported upon admission to the zone (i.e., for drawback purposes or to close out a TIB). Non-tax paid alcoholic beverages and tobacco products can be admitted to a zone only in ZR status. Merchandise entered into a bonded warehouse for storage and transferred to a zone (other than temporarily for manipulation and returned to Customs territory as provided for in § 146.33) will have ZR status when admitted into the zone. Merchandise that has been placed in a bonded warehouse for a purpose other than entry for warehouse (such as general order or under seizure) may be admitted to a zone in any eligible status."

Zone Site
The physical location of the zone.

Zone Status
"The legal status of goods in a foreign-trade zone. (See definitions for Privileged Foreign, Non-Privileged Foreign, Domestic and Zone Restricted.)"

Zone to Zone Transfer
Merchandise transferred from one zone in a port to another zone in that same port or to a zone within a different port. Each type of transfer requires different forms and procedures as specified in 19 CFR § 146.66.