Glossary term
Foreign Trade Zone
A designated area treated as outside the customs territory, where goods can be held or processed with duty deferred.
An area within a country but outside its customs territory for duty purposes. Goods can be stored, handled, assembled or manufactured there with duty deferred, reduced or avoided entirely if they are re-exported.
Duty falls due when goods leave the zone for the domestic market, and in some regimes the rate applied is that of the finished article rather than the inputs. See also free trade zone.