They are the United States' version of international free trade zones. Foreign or domestic merchandise may enter any designated site without a formal customs entry or the payment of duties or excise taxes and without a thorough examination. Customs duty otherwise due on import items can be deferred or eliminated if the product enters the FTZ for purposes of storage, re-exporting, manufacturing, displaying, assembling, repacking, testing, repairing or other similar uses. If the final product is exported, then no duty or excise taxes are levied. If the final product is imported, duty and taxes are due only at the time of formal entry into the United States.
Most zones are part of an industrial park.
Although FTZs were introduced in the United States a century ago, businesses did not begin utilizing them on a widespread basis until the 1970s.