A foreign-trade zone is a designated site licensed by the Foreign-Trade Zones (FTZ) Board at which special customs procedures may be used. These procedures allow domestic activity involving foreign items to take place prior to formal customs entry.

Duty-free treatment is accorded items that are re-exported and duty payment is deferred on items sold in the U.S. market, thus offsetting customs advantages available to overseas producers who compete with producers located in the United States.

Subzones are special-purpose zones, usually at manufacturing plants. A site which has been granted zone status may not be used for zone activity until the site has been separately approved for FTZ activation by local U.S. Customs and Border Protection (CBP) officials, and the zone activity remains under the supervision of CBP. FTZ sites and facilities remain within the jurisdiction of local, state or federal governments or agencies.

The benefits of operating within an FTZ are obvious. At the very least, a FTZ can help you defer paying duties. More often, the company pays lower costs, not only to U.S. Customs, but to its bank, insurance company, and other vendors.

Applications for new general-purpose zones are made by a public or public-type corporation (this could include port authorities, cities, counties, economic development organizations or others).

Oklahoma's 4 Foreign Trade Zones:
In addition to our strategic location in the geographic center of the U.S., Oklahoma offers an expansive transportation system and state-of-the-art industrial parks ideal for businesses importing and warehousing, manufacturing, or assembling with imported goods.

FTZ 106 -- The Port Authority at Will Rogers International Airport of the Greater Oklahoma City Area is the governing board and Oklahoma's largest Foreign Trade Zone, having responsibility for a 41-county region in central and western Oklahoma. FTZ 106 also governs 11 subzones including:

• Biagi Bros. Warehouse;
• IG Trade Processing Center;
• Western Heights Properties;
• Hobart Business Parks;
• Fairview Industrial Parks;
• Kelley International Trade Center
• Guthrie / Edmond Regional Airport (GeoPort)
• Cushing Industrial Parks and Oil Tank Farms
• MidAmerica Industrial ParK
• IG Manufacturing (Mustang,OK) 
• The ICON Center (Chickasaw Center)
• For Greater Oklahoma City Area Zone Assistance:  Matthew S. Weaver, 405-623-5335, http://foreigntradezone106.org/.

FTZ 164 -- The Port of Muskogee, located on the McClellan Kerr Arkansas River Navigation System, is a full-service facility that offers easy access to rail, truck, and barge transportation. Its inland location allows freight to be transported to the Gulf Coast and around the world via the Arkansas and Mississippi Rivers.

• For Port of Muskogee Assistance:  Scott Robinson, 918-682-7886, www.muskogeeport.com.

FTZ 53 -- The Tulsa Port of Catoosa, also on the McClellan Kerr Arkansas River Navigation System, provides rail, barge and truck transportation services from Oklahoma to ports through out the world.

• For Tulsa Port of Catoosa Assistance: Bob Portiss, 918-266-2291, www.tulsaport.com.

FTZ 227 -- The International Business Park in Durant is a thriving 320-acre park, serving southern and southeastern Oklahoma and Texas.  Interstate 35, the primary trunk of the NAFTA Super Highway Systems, lies just 45 miles west of the zone.

• For International Business Park in Durant Assistance:  Sherry Harlin, 580-924-5094, www.ruralenterprises.com.

Benefits of an FTZ:

• Cash Flow - Payment of duty is deferred until goods are actually brought into the U.S. Customs Territory. This results in cash flow savings.
• Waste/Scrap/Defect/Damage - Duties are reduced or eliminated on materials subject to defect, waste, scrap and damaged.
• Exports - No U.S. Customs duties are paid on merchandise exported from an FTZ.
• Inverted U.S. Customs Duty Savings - In an FTZ, the FTZ user may elect to pay the duty rate applicable to either component material or the finished product manufactured from the component material, depending upon which is lower (must be chosen at time of entry into the Zone). The reduction or elimination of duties is significant.
• Reduced Cycle Time - Delays relating to U.S. Customs clearances are eliminated. Special direct delivery procedures expedite the receipt of merchandise in company facilities, reducing inventory cycle time.
• Production Machinery/Merchandise Consumed - Machinery for use in a zone may be assembled and installed before duties are owed on either parts or finished product rate. Merchandise used/consumed in Zone processing is generally not subject to duties.
• No Duties on Labor, Overhead and Profit - U.S. Customs duties are not owed on labor, overhead and profit attributed to production operations in an FTZ. If the same production operation were done overseas, the value of the labor, overhead and profit would be subject to U.S. Customs duty.
• Storage - The goods may be stored indefinitely.
• Quota - Most merchandise subject to U.S. quotas may be held in a Zone until quotas open.
• Zone to Zone Transfer - Transfers between Zones are permitted with no entry or duty requirement.
• Security - Lower insurance costs: the Zone is a high security area.

Other Benefits:

• Help facilitate and expedite international trade;
• Provide special customs procedures as a public service to help firms conduct international trade related operations in competition with foreign plants;
• Encourage and facilitate exports;
• Help attract offshore activity and encourage retention of domestic activity;
• Assist state/local economic development efforts;
• Help create employment opportunities.

The following companies have participated in Oklahoma's FTZ's:

• Xerox;
• MerCruiser;
• Valero;
• Conoco-Phillips;
• Charles Komar and Sons, Inc.

Is operating within a foreign trade zone right for your business?
FTZ 106 offers a free analysis of your current operations to determine your level of savings by using an FTZ. This no-cost analysis is designed to illuminate all the different types of benefits previously mentioned while taking into account any Customs programs you are currently utilizing. The analysis will make it much clearer whether or not a Foreign-Trade Zone is right for your firm.

Click here to participate in this free analysis

Click here to learn more about foreign trade zones

Learn more about the Oklahoma Department of Commerce Export Assistance for companies interested in doing business internationally.

Disclaimer
The materials contained on this website have been prepared by the Oklahoma Department of Commerce for informational purposes only and do not constitute legal or tax advice. This information is subject to change based on judicial interpretation and legislative action. The application of the information is subject to your unique facts and circumstances. YOU SHOULD NOT ACT UPON ANY INFORMATION CONTAINED IN THESE MATERIALS WITHOUT SEEKING YOUR OWN PROFESSIONAL LEGAL AND TAX ADVICE.