GlossaryEN1 min readUpdated: Jun 26, 2026
Free Trade Zone
Unlike a bonded warehouse, where goods remain formally within the customs territory under a suspended customs procedure, merchandise held in a free trade zone (FTZ) is treated as lying outside the national customs territory—duties, import taxes, and excise charges become payable only when goods are released into domestic commerce, and are waived entirely on re-export.
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Source: https://eur-lex.europa.eu/legal-content/DE/TXT/?uri=CELEX%3A32013R0952
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Definition & Explanation
Unlike a bonded warehouse, where goods remain formally within the customs territory under a suspended customs procedure, merchandise held in a free trade zone (FTZ) is treated as lying outside the national customs territory—duties, import taxes, and excise charges become payable only when goods are released into domestic commerce, and are waived entirely on re-export. An FTZ is a physically demarcated, government-supervised area where goods may be stored, transshipped, assembled, or processed. Importers, exporters, and trading companies use FTZs to defer duty payments, consolidate shipments, and manage cargo whose final market has not yet been determined. Common forms include freeports, US Foreign-Trade Zones, and special economic zones; within the EU, free zones are governed by the Union Customs Code (UCC).
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