Activation
Approval by the grantee and U.S. Customs and Border Protection’s Port
Director for operations to begin, which allow the admission and handling
of merchandise in zone status.
Admission
The physical arrival of goods into a zone in a specified zone status
with the appropriate approvals of the zone grantee and the U.S. Customs
and Border Protection. The word "admission" is used instead of "entry"
to avoid confusion with Customs entry processes under Parts 141-144 of
the Customs Regulations.
Air Waybill
The forwarding agreement or carrying agreement between shipper and air
carrier that is used as a receipt for cargo and as a contract of
carriage.
Certificate of Origin
A certified document presented to customs authorities which shows the
national origin of goods for import.
Commercial Invoice
The official transaction record between an exporter and an importer for
international shipments.
Country of Origin
The country where the merchandise was grown, mined or manufactured, in
accordance with Customs Regulations.
Customs
The authorities designated to collect duties, taxes or other charges
levied by a country on imports and exports (also applying to the
procedures involved in such collection). Customs also enforces
import/export rules mandated by the country's government
Customhouse Broker
An individual or firm licensed to enter and clear goods through Customs.
Customs Territory
The territory of the U.S. in which the general tariff laws of the U.S.
apply. The U.S. Customs territory includes the States, the District of
Columbia and Puerto Rico minus any areas within the boundaries of
foreign-trade zones.
Dangerous Goods
Commodities that, when transported, pose some form of danger to people,
animals, the environment, or the carrier.
Deactivation
Voluntary discontinuation of the activation of an entire zone or
sub-zone by the grantee or operator. (Discontinuance of the activated
status of only part of a zone is an alteration).
Declared Value for Carriage
The maximum of FedEx's transportation liability for any loss, damage,
delay, misdelivery, non-delivery, misinformation or any failure to
provide information.
Declared Value for Customs
The selling price or cost as determined by other valuation methods, of
an international shipment's contents.
Direct Delivery
A procedure for delivery of merchandise to a zone without prior
application and approval on Customs Form 214; designed for low-risk,
repetitive shipments whose ordering and timing are under the control of
the operator. Approval to utilize direct delivery must be obtained from
the Port Director.
Domestic (D) Status
Status of zone merchandise grown, produced or manufactured in the U.S.
on which all internal revenue taxes have been paid, or the status of
zone merchandise previously imported on which all applicable duties and
internal revenue taxes have been paid.
Drawback
Import duties or taxes repaid by the government, in whole or in part,
when the imported goods are exported or used in the manufacture of
exported goods.
Duty-Free
Classes of goods that are able to enter Canada free of duty or not
subject to taxes, such as the personal effects of Canadian residents
taken abroad, and gifts to a maximum of $60 CAD.
Entry
Notification to Customs of the arrival of imported goods in the Customs
territory of the U.S. Merchandise withdrawn from a zone for consumption
in the U.S. is entered when it is removed from the zone. Goods brought
into a zone are admitted.
European Economic Area (EEA)
A combination of the member nations of the European Union (EU) and the
European Free Trade Association (EFTA) that comprises 19 nations, nearly
380 million people, and approximately 40 percent of world trade.
Exports
Exports are the physical movement of goods out of a country.
Export Declaration
A formal statement declaring full details about goods being exported,
that is made to customs at a port of exit.
Free Trade Agreement
An arrangement which establishes unimpeded exchange and flow of goods
and services between trading partners regardless of national borders.
Freight Forwarder
A business that handles import/export shipments, and provides
information and assistance for importing/exporting.
General-Purpose Zone (GPZ)
A general-purpose zone is established for multiple activities by
multiple users. Storage, distribution, testing, repackaging and repair
are some of the possible activities in a GPZ. Processing or
manufacturing in a GPZ requires the permission of the Foreign-Trade
Zones Board.
General Imports
The total number of arrivals of merchandise into Canada for immediate
consumption and entries into Canada Customs bonded warehouses.
General Tariff
Applies to countries that do not enjoy either preferential or
most-favored-nation tariff treatment. Where the general tariff rate
differs from the most-favored-nation rate, the general tariff rate is
usually the higher rate.
Grantee
A corporation to which the privilege of establishing, operating and
maintaining a foreign-trade zone has been granted by the Foreign-Trade
Zones Board. Grantee corporations must be either public corporations
including a state, political subdivision (including a municipality),
public agency, corporate municipal instrumentality of one or more states
or private corporations organized for the purpose of establishing a zone
project. Qualified private corporations must be charted for this purpose
under a law of the state in which the zone is located.
Harmonized
System
The Harmonized Commodity Description and Coding System (or Harmonized
System, HS) is a system for classifying goods in international trade,
developed under the auspices of the Customs Cooperation Council (now
known as the World Customs Organization).
Harmonized Tariff Schedule of the
United States (HTSUS)
Published by the U.S. International Trade Commission, the HTSUS is used
in the classification of imported merchandise for rates of duty and
statistical purposes.
Imports
Imports are the physical movement of goods into a country.
Import Restrictions
Import restrictions are applied by a country to control the volume and
type of goods coming into it from other countries and may include the
imposition of tariffs, surcharges or import quotas, restrictions on the
amount of foreign currency available to cover imports, a requirement for
import deposits, or the prohibition of various categories of imports.
Inverted Tariff Structure
Where imported parts are dutiable at higher rates than the finished
product into which they are incorporated.
Manipulation
As defined in Section 562 of the Tariff Act, processing wherein
merchandise is packed, unpacked, repacked, cleaned, sorted, graded or
otherwise changed in condition. The precise distinction between
manipulation and manufacturing is subject to interpretation and enjoys a
long history of case law.
Manufacturing
The FTZ Board has defined manufacturing as any process that results in a
change in Customs classification of the merchandise, and therefore,
requires prior clearance from the Board pursuant to the manufacturing
conditions in specific foreign-trade zone grants.
Marks of Origin
Marks of origin are the physical markings on a product that indicate the
country of origin where the article was produced
Merchandise
FTZ merchandise includes goods, wares, and chattels of every
description. Not included is prohibited merchandise, building materials
and supplies for use in the operation of a zone.
NAFTA Certificate of Origin
The NAFTA Certificate of Origin is a document provided for goods that
qualify for reduced or duty-free entry as a product of one of the three
participating member nations: Mexico, United States and Canada.
Nonprivileged Foreign Status (NPF)
Status of zone merchandise not previously cleared by Customs, which is
appraised in the condition of the merchandise, at the time it enters the
Customs territory upon exiting the zone. NPF status may be changed upon
approval from Customs, provided the merchandise is still in the same
condition as when admitted to the zone. While in the zone, NPF status
merchandise can be manipulated or manufactured into another commercial
item with a different tariff classification. NPF status allows zone
users to pay duty at the rate of the finished product produced in the
zone.
North American Free Trade Agreement
(NAFTA)
NAFTA is a free trade agreement that comprises Canada, the U.S. and
Mexico, exceeding 360 million consumers and with a combined output of $6
trillion.
NAFTA Certificate of Origin
The NAFTA Certificate of Origin is a document provided for goods that
qualify for reduced or duty-free entry as a product of one of the three
participating member nations: Mexico, United States and Canada.
Operator
A corporation, partnership or person that operates a zone or subzone
under the terms of an agreement with the grantee. A grantee may act as
its own operator.
Operator’s Bond
A bond submitted to Customs, on Customs Form 301, to assure compliance
with the Customs Regulations as set forth in 19 CFR 113.73.
Port of Entry
A place designated by the U.S. Government at which a Customs officer is
assigned with authority to accept entries of merchandise, collect
duties, and enforce the various provisions of the Customs laws.
Privileged Foreign Status (PF)
Zone status whereby merchandise is classified and appraised, with duties
and taxes determined, at the time the status is elected. Privileged
foreign status cannot be changed once chosen.
Subzone
A special-purpose zone established as part of a zone project for a
limited purpose that cannot be accommodated within an existing General
Purpose Zone. Subzones must be sponsored by the grantee of a General
Purpose Zone.
Tariff Schedule
A comprehensive list of all goods that a country may import and the
import duties applicable to each product.
User
A person or company using a zone for storage, handling or processing of
merchandise. Note: An operator may authorize a user to maintain its own
inventory system and procedures manual. However, the operator remains
responsible to Customs for inventory control unless the user posts its
own operator’s bond.
Weekly Entry Procedures
A Customs procedure that permits zones and subzones to file a weekly
entry on Customs Form 3461 for the estimated removals of merchandise
destined for domestic consumption during the following business week.
Once the Port Director has approved the entry, the operator may ship the
products all week up to the quantity estimated.
Zone Lot
A collection of merchandise maintained under an inventory control method
based on specific identification of merchandise admitted into a zone by
lot and lot number (ZLN).
Zone Restricted Status
Status of zone merchandise transferred to a zone for the sole purpose of
exportation or destruction. Zone restricted merchandise cannot be
changed or brought into the Customs Territory without the specific
permission of the Foreign-Trade Zones Board on a case-by-case review.
Zone Status
The status of merchandise admitted to a zone, i.e. domestic (D),
non-privileged foreign (NDF), privileged foreign (PF), or zone
restricted (ZR).
