US Code

Public Law 119-73 (01/23/2026)

19 U.S.C. § 81c

Exemption from customs laws of merchandise brought into foreign trade zone

(a)

Handling of merchandise in zone; shipment of foreign merchandise into customs territory; appraisal; reshipment to zone

ProvidedProvided furtherProvided furtherProvided furtherForeign and domestic merchandise of every description, except such as is prohibited by law, may, without being subject to the customs laws of the United States, except as otherwise provided in this chapter, be brought into a zone and may be stored, sold, exhibited, broken up, repacked, assembled, distributed, sorted, graded, cleaned, mixed with foreign or domestic merchandise, or otherwise manipulated, or be manufactured except as otherwise provided in this chapter, and be exported, destroyed, or sent into customs territory of the United States therefrom, in the original package or otherwise; but when foreign merchandise is so sent from a zone into customs territory of the United States it shall be subject to the laws and regulations of the United States affecting imported merchandise: , That whenever the privilege shall be requested and there has been no manipulation or manufacture effecting a change in tariff classification, the appropriate customs officer shall take under supervision any lot or part of a lot of foreign merchandise in a zone, cause it to be appraised and taxes determined and duties liquidated thereon. Merchandise so taken under supervision may be stored, manipulated, or manufactured under the supervision and regulations prescribed by the Secretary of the Treasury, and whether mixed or manufactured with domestic merchandise or not may, under regulations prescribed by the Secretary of the Treasury, be exported or destroyed, or may be sent into customs territory upon the payment of such liquidated duties and determined taxes thereon. If merchandise so taken under supervision has been manipulated or manufactured, such duties and taxes shall be payable on the quantity of such foreign merchandise used in the manipulation or manufacture of the entered article. Allowance shall be made for recoverable and irrecoverable waste; and if recoverable waste is sent into customs territory, it shall be dutiable and taxable in its condition and quantity and at its weight at the time of entry. Where two or more products result from the manipulation or manufacture of merchandise in a zone the liquidated duties and determined taxes shall be distributed to the several products in accordance with their relative value at the time of separation with due allowance for waste as provided for above: , That subject to such regulations respecting identity and the safeguarding of the revenue as the Secretary of the Treasury may deem necessary, articles, the growth, product, or manufacture of the United States, on which all internal-revenue taxes have been paid, if subject thereto, and articles previously imported on which duty and/or tax has been paid, or which have been admitted free of duty and tax, may be taken into a zone from the customs territory of the United States, placed under the supervision of the appropriate customs officer, and whether or not they have been combined with or made part, while in such zone, of other articles, may be brought back thereto free of quotas, duty, or tax: , That if in the opinion of the Secretary of the Treasury their identity has been lost, such articles not entitled to free entry by reason of noncompliance with the requirements made hereunder by the Secretary of the Treasury shall be treated when they reenter customs territory of the United States as foreign merchandise under the provisions of the tariff and internal-revenue laws in force at that time: , That under the rules and regulations of the controlling Federal agencies, articles which have been taken into a zone from customs territory for the sole purpose of exportation, destruction (except destruction of distilled spirits, wines, and fermented malt liquors), or storage shall be considered to be exported for the purpose of—
(1)
the draw-back, warehousing, and bonding, or any other provisions of the Tariff Act of 1930, as amended, and the regulations thereunder; and
(2)
the statutes and bonds exacted for the payment of draw-back, refund, or exemption from liability for internal-revenue taxes and for the purposes of the internal-revenue laws generally and the regulations thereunder.
section 1201 of this titleProvided furthersection 1001 of this titleProvided furtherProvided, furthersection 4534(a) of this titlesection 4502 of this titlesection 4534(e) of this titleProvided, furtherProvided furtherSuch a transfer may also be considered an exportation for the purposes of other Federal laws insofar as Federal agencies charged with the enforcement of those laws deem it advisable. Such articles may not be returned to customs territory for domestic consumption except where the Foreign-Trade Zones Board deems such return to be in the public interest, in which event the articles shall be subject to the provisions of paragraph 1615(f) of : , That no operation involving any foreign or domestic merchandise brought into a zone which operation would be subject to any provision or provisions of section 1807, chapter 15, chapter 16, chapter 17, chapter 21, chapter 23, chapter 24, chapter 25, chapter 26, or chapter 32 of the Internal Revenue Code if performed in customs territory, or involving the manufacture of any article provided for in paragraphs 367 or 368 of , shall be permitted in a zone except those operations (other than rectification of distilled spirits and wines, or the manufacture or production of alcoholic products unfit for beverage purposes) which were permissible under this chapter prior to : , That articles produced or manufactured in a zone and exported therefrom shall on subsequent importation into the customs territory of the United States be subject to the import laws applicable to like articles manufactured in a foreign country, except that articles produced or manufactured in a zone exclusively with the use of domestic merchandise, the identity of which has been maintained in accordance with the second proviso of this section may, on such importation, be entered as American goods returned: , That no merchandise that consists of goods subject to USMCA drawback, as defined in , that is manufactured or otherwise changed in condition shall be exported to a USMCA country, as defined in , without an assessment of a duty on the merchandise in its condition and quantity, and at its weight, at the time of its exportation (or if the privilege in the first proviso to this subsection was requested, an assessment of a duty on the merchandise in its condition and quantity, and at its weight, at the time of its admission into the zone) and the payment of the assessed duty before the 61st day after the date of exportation of the article, except that upon the presentation, before such 61st day, of satisfactory evidence of the amount of any customs duties paid or owed to the USMCA country on the article, the customs duty may be waived or reduced (subject to ) in an amount that does not exceed the lesser of (1) the total amount of customs duties paid or owed on the merchandise on importation into the United States, or (2) the total amount of customs duties paid on the article to the USMCA country: , That, if Canada ceases to be a USMCA country and the suspension of the operation of the United States-Canada Free-Trade Agreement thereafter terminates, with the exception of drawback eligible goods under section 204(a) of the United States-Canada Free-Trade Agreement Implementation Act of 1988, no article manufactured or otherwise changed in condition (except a change by cleaning, testing or repacking) shall be exported to Canada during the period such Agreement is in operation without the payment of a duty that shall be payable on the article in its condition and quantity, and at its weight, at the time of its exportation to Canada unless the privilege in the first proviso to this subsection was requested: , That no merchandise that consists of goods subject to Chile FTA drawback, as defined in section 203(a) of the United States-Chile Free Trade Agreement Implementation Act, that is manufactured or otherwise changed in condition shall be exported to Chile without an assessment of a duty on the merchandise in its condition and quantity, and at its weight, at the time of its exportation (or if the privilege in the first proviso to this subsection was requested, an assessment of a duty on the merchandise in its condition and quantity, and at its weight, at the time of its admission into the zone) and the payment of the assessed duty before the 61st day after the date of exportation of the article, except that the customs duty may be waived or reduced by (1) 100 percent during the 8-year period beginning on ; (2) 75 percent during the 1-year period beginning on ; (3) 50 percent during the 1-year period beginning on ; and (4) 25 percent during the 1-year period beginning on .
(b)

Applicability to bicycle component parts

The exemption from the customs laws of the United States provided under subsection (a) shall not be available on or before , to bicycle component parts unless such parts are reexported from the United States, whether in the original package, as components of a completely assembled bi­cycle, or otherwise.

(c)

Articles manufactured or produced from de­natured distilled spirits withdrawn free of tax from distilled spirits plant; products unfit for beverage purposes

(1)
section 5002(a)(14) of title 26section 5002(a)(1) of title 26 Notwithstanding the provisions of the fifth proviso of subsection (a), any article (within the meaning of ) may be manufactured or produced from denatured distilled spirits which have been withdrawn free of tax from a distilled spirits plant (within the meaning of ), and articles thereof, in a zone.
(2)
section 5002(a)(1) of title 26 Notwithstanding the provisions of the fifth proviso of subsection (a), distilled spirits which have been removed from a distilled spirits plant (as defined in ) upon payment or determination of tax may be used in the manufacture or production of medicines, medicinal preparation, food products, flavors, or flavoring extracts, which are unfit for beverage purposes, in a zone. Such products will be eligible for drawback under the internal revenue laws under the same conditions applicable to similar manufacturing or production operations occurring in customs territory.
(d)

Foreign trade zones

In regard to the calculation of relative values in the operations of petroleum refineries in a foreign trade zone, the time of separation is defined as the entire manufacturing period. The price of products required for computing relative values shall be the average per unit value of each product for the manufacturing period. Definition and attribution of products to feedstocks for petroleum manufacturing may be either in accordance with Industry Standards of Potential Production on a Practical Operating Basis as verified and adopted by the Secretary of the Treasury (known as producibility) or such other inventory control method as approved by the Secretary of the Treasury that protects the revenue.

(e)

Production equipment

(1)

In general

Notwithstanding any other provision of law, if all applicable customs laws are complied with (except as otherwise provided in this subsection), merchandise which is admitted into a foreign trade zone for use within such zone as production equipment or as parts for such equipment, shall not be subject to duty until such merchandise is completely assembled, installed, tested, and used in the production for which it was admitted.

(2)

Admission procedures

The person who admits the merchandise described in paragraph (1) into the zone shall, at the time of such admission, certify to the Customs Service that the merchandise is admitted into the zone pursuant to this subsection for use within the zone as production equipment or as parts for such equipment and that the merchandise will be entered and estimated duties deposited when use of the merchandise in production begins.

(3)

Entry procedures

19 U.S.C. 1484At the time use of the merchandise in production begins, the merchandise shall be entered, as provided for in section 484 of the Tariff Act of 1930 [], and estimated duties shall be deposited with the Customs Service. The merchandise shall be subject to tariff classification according to its character, condition, and quantity, and at the rate of duty applicable, at the time use of the merchandise in production begins.

(4)

Foreign trade zone

For purposes of this subsection, the term “foreign trade zone” includes a subzone.

June 18, 1934, ch. 590, § 348 Stat. 999June 17, 1950, ch. 296, § 164 Stat. 246Pub. L. 91–271, title III, § 30984 Stat. 292Pub. L. 98–573, title II, § 231(a)(2)98 Stat. 2990Pub. L. 99–514, title XVIII, § 1894100 Stat. 2931Pub. L. 100–418, title I, § 1783(f)102 Stat. 1300Pub. L. 100–449, title II, § 204(c)(5)102 Stat. 1863Pub. L. 100–647, title IX, § 9002102 Stat. 3808Pub. L. 101–382, title III104 Stat. 706Pub. L. 103–182, title II, § 203(b)(5)107 Stat. 2091Pub. L. 104–295, § 31(a)110 Stat. 3536Pub. L. 106–36, title I, § 1001(b)(2)113 Stat. 131Pub. L. 108–77, title II, § 203(b)(5)117 Stat. 929Pub. L. 116–113, title V, § 501(e)(5)134 Stat. 69Pub. L. 116–260, div. O, title VI, § 601(c)(2)(B)134 Stat. 2150(, ; , ; , , ; , , ; , , ; , , ; , , ; , , ; , §§ 481, 484F, , , 710; , , ; , , ; , , ; , , ; , , ; , , .)

Amendment of Section

section 107(c) of Pub. L. 108–77For termination of amendment by , see Effective and Termination Dates of 2003 Amendment note below.

section 501(c) of Pub. L. 100–449For termination of amendment by , see Effective and Termination Dates of 1988 Amendment note below.

Editorial Notes

References in Text

act June 17, 1930, ch. 49746 Stat. 590The Tariff Act of 1930, referred to in subsec. (a)(1), is , , which is classified generally to chapter 4 (§ 1202 et seq.) of this title. For complete classification of this Act to the Code, see Tables.

Pub. L. 87–456, title I, § 101(a)76 Stat. 72section 1202 of this titleSections 1001 and 1201 of this title, referred to in subsec. (a), which comprised the dutiable and free lists for articles imported into the United States, were repealed by , , , which act also revised the Tariff Schedules of the United States. The Tariff Schedules of the United States were replaced by the Harmonized Tariff Schedule of the United States which is not set out in the Code. See Publication of Harmonized Tariff Schedule note set out under .

section 7851 of Title 26Pub. L. 99–514, § 2100 Stat. 2095section 7852(b) of Title 26References in subsec. (a) to section and chapters of the Internal Revenue Code are references to section and chapters of the Internal Revenue Code, 1939, which was repealed by , I.R.C. 1954. The Internal Revenue Code of 1954 was redesignated the Internal Revenue Code of 1986 by , , . Corresponding sections of I.R.C. 1986 to section and chapters of I.R.C. 1939 referred to in the text are set out below. For provision deeming a reference in other laws to a provision of I.R.C. 1939, also as a reference to corresponding provision of I.R.C. 1986, see , I.R.C. 1986.

section 203(a) of Pub. L. 108–77section 3805 of this titleSection 203(a) of the United States-Chile Free Trade Agreement Implementation Act, referred to in subsec. (a), is , which is set out in a note under .

I.R.C. 1939

I.R.C. 1986

§ 1807

Omitted

Chapter 15

§ 5701 et seq.

Chapter 16

§ 4591 et seq., § 4811 et seq.

Chapter 17

§ 4831 et seq.

Chapter 21

Omitted

Chapter 23

§ 4701 et seq.

Chapter 24

§ 4801 et seq.

Chapter 25

§§ 4181, 4182, and 5811 et seq.

Chapter 26

§ 5001 et seq.

Chapter 32

§ 4501 et seq.

section 204 of Pub. L. 100–449section 2112 of this titleSection 204 of the United States-Canada Free-Trade Agreement Implementation Act of 1988, referred to in subsec. (a), is , which is set out in a note under .

Amendments

Pub. L. 116–260section 4534(e) of this title2020—Subsec. (a). substituted “(subject to )” for “(subject to section 508(b)(2)(B) of the Tariff Act of 1930)” in seventh proviso.

Pub. L. 116–113section 4534(a) of this titlesection 3333(a) of this titlesection 4502 of this titlesection 3301(4) of this title, which directed amendment of the flush text of subsec. “(a)(2)” by substituting “goods subject to USMCA drawback, as defined in ” for “goods subject to NAFTA drawback, as defined in ”, “a USMCA country, as defined in ” for “a NAFTA country, as defined in ”, and “USMCA” for “NAFTA” wherever appearing, was executed by making the substitutions in concluding provisions of subsec. (a), to reflect the probable intent of Congress.

Pub. L. 108–77Provided further2003—Subsec. (a). , §§ 107(c), 203(b)(5), temporarily inserted before period at end “, That no merchandise that consists of goods subject to Chile FTA drawback, as defined in section 203(a) of the United States-Chile Free Trade Agreement Implementation Act, that is manufactured or otherwise changed in condition shall be exported to Chile without an assessment of a duty on the merchandise in its condition and quantity, and at its weight, at the time of its exportation (or if the privilege in the first proviso to this subsection was requested, an assessment of a duty on the merchandise in its condition and quantity, and at its weight, at the time of its admission into the zone) and the payment of the assessed duty before the 61st day after the date of exportation of the article, except that the customs duty may be waived or reduced by (1) 100 percent during the 8-year period beginning on ; (2) 75 percent during the 1-year period beginning on ; (3) 50 percent during the 1-year period beginning on ; and (4) 25 percent during the 1-year period beginning on ”. See Effective and Termination Dates of 2003 Amendment note below.

Pub. L. 106–361999—Subsec. (a). struck out second period at end of last sentence.

Pub. L. 104–2951996—Subsec. (e). added subsec. (e).

Pub. L. 103–1821993—Subsec. (a). , in provisions following par. (2), inserted second proviso relating to goods subject to NAFTA drawback, and in last proviso inserted “, if Canada ceases to be a NAFTA country and the suspension of the operation of the United States-Canada Free-Trade Agreement thereafter terminates,” after “That” and substituted “during the period such Agreement is in operation” for “on or after , or such later date as may be proclaimed by the President under section 204(b)(2)(B) of such Act of 1988,”.

Pub. L. 101–382, § 4811990—Subsec. (b). , substituted “on or before ” for “before ”.

Pub. L. 101–382, § 484FSubsec. (c). , designated existing provisions as par. (1), struck out “domestic” before “denatured distilled”, inserted provisions relating to withdrawal free of tax from a distilled spirits plant, and added par. (2).

Pub. L. 100–4491988—Subsec. (a). temporarily inserted provision directing that, “with the exception of drawback eligible goods under section 204(a) of the United States-Canada Free-Trade Agreement Implementation Act of 1988, no article manufactured or otherwise changed in condition (except a change by cleaning, testing or repacking) shall be exported to Canada on or after , or such later date as may be proclaimed by the President under section 204(b)(2)(B) of such Act of 1988, without the payment of a duty that shall be payable on the article in its condition and quantity, and at its weight, at the time of its exportation to Canada unless the privilege in the first proviso to this subsection was requested.” See Effective and Termination Dates of 1988 Amendment note below.

Pub. L. 100–418Subsec. (b). substituted “” for “”.

Pub. L. 100–647Subsec. (d). added subsec. (d).

Pub. L. 99–5141986—Subsec. (c). added subsec. (c).

Pub. L. 98–5731984—Subsec. (a). designated existing provisions as subsec. (a), redesignated former pars. (a) and (b) as pars. (1) and (2), respectively, of subsec. (a), and added subsec. (b).

Pub. L. 91–2711970— substituted references to the appropriate customs officers for references to the collector of customs wherever appearing.

1950—Act , amended section generally to remove the prohibition against, and to authorize specifically, manufacture and exhibition within a zone.

Statutory Notes and Related Subsidiaries

Effective Date of 2020 Amendment

Pub. L. 116–260, div. O, title VI, § 601(h)134 Stat. 2152

section 3472 of this title“This section [amending this section, sections 1311 to 1313, 1508, 1520, 1562, 1677f, 3472, 3473, 4531, and 4534 of this title, and sections 290m to 290m–5 and 290m–7 of Title 22, Foreign Relations and Intercourse, and enacting provisions set out as a note under ] and the amendments made by this section shall take effect on .”
, , , provided that:

Pub. L. 116–113, title V, § 501(g)134 Stat. 69

“(1)

In general .—

Each transfer, redesignation, and amendment made by subsections (b) through (e) [amending this section and sections 1311 to 1313, 1562, 3333, and 4534 of this title] shall—
“(A)
take effect on the date on which the USMCA enters into force []; and
“(B)
apply with respect to a good entered, or withdrawn from warehouse for consumption, on or after that date.
“(2)

Transition from nafta treatment .—

In the case of a good entered, or withdrawn from warehouse for consumption, before the date on which the USMCA enters into force—
“(A)
the amendments made by subsections (b) through (e) shall not apply with respect to the good; and
“(B)
the provisions of law amended by such subsections, as such provisions were in effect on the day before that date, shall continue to apply on and after that date with respect to the good.”
, , , provided that:

section 501(g) of Pub. L. 116–113section 4502 of this title[For definition of “USMCA” as used in , set out above, see .]

Effective and Termination Dates of 2003 Amendment

Pub. L. 108–77Pub. L. 108–77section 3805 of this titleAmendment by effective on the date the United States-Chile Free Trade Agreement enters into force (), and to cease to be effective on the date the Agreement ceases to be in force, see section 107(a), (c) of , set out in a note under .

Effective Date of 1996 Amendment

Pub. L. 104–295, § 31(b)110 Stat. 3537

“The amendment made by this section [amending this section] shall apply with respect to merchandise admitted into a foreign trade zone after the date that is 15 days after the date of the enactment of this Act [].”
, , , provided that:

Effective Date of 1993 Amendment

Pub. L. 103–182section 213(c) of Pub. L. 103–182section 3331 of this titleAmendment by applicable (1) with respect to exports from the United States to Canada on , if Canada is a NAFTA country on that date and after such date for so long as Canada continues to be a NAFTA country and (2) with respect to exports from the United States to Mexico on , if Mexico is a NAFTA country on that date and after such date for so long as Mexico continues to be a NAFTA country, see , formerly set out as an Effective Date note under former .

Effective Date of 1990 Amendment

Pub. L. 101–382, title III, § 485(a)104 Stat. 712

“Except as otherwise provided in this title, the amendments made by this title [amending this section and sections 1309, 1313, 1466, and 1553 of this title and enacting provisions set out as notes under sections 1309, 1466, and 1553 of this title], shall apply with respect to articles entered, or withdrawn from warehouse for consumption, on or after .”
, , , provided that:

Effective and Termination Dates of 1988 Amendment

Pub. L. 100–449Pub. L. 100–449section 2112 of this titleAmendment by effective on date the United States-Canada Free-Trade Agreement enters into force (), and to cease to have effect on date Agreement ceases to be in force, see section 501(a), (c) of , set out in a note under .

section 1783(f) of Pub. L. 100–418section 1831(a) of Pub. L. 100–418Amendment by applicable with respect to articles entered or withdrawn from warehouse for consumption, after , pursuant to .

Effective Date of 1984 Amendment

Pub. L. 98–573, title II, § 231(a)(3)98 Stat. 2990

“The amendments made by paragraph (2) [amending this section] shall take effect on the fifteenth day after the date of the enactment of this Act [].”
, , , provided that:

Effective Date of 1970 Amendment

Pub. L. 91–271section 203 of Pub. L. 91–271section 1500 of this titleAmendment by effective with respect to articles entered, or withdrawn from warehouse for consumption, on or after , and such other articles entered or withdrawn from warehouse for consumption prior to such date, or with respect to which a protest has not been disallowed in whole or in part before , see , set out as a note under .

Transfer of Functions

section 542 of Title 6Pub. L. 107–296section 211 of Title 6Pub. L. 114–125section 802(b) of Pub. L. 114–125section 211 of Title 6For transfer of functions, personnel, assets, and liabilities of the United States Customs Service of the Department of the Treasury, including functions of the Secretary of the Treasury relating thereto, to the Secretary of Homeland Security, and for treatment of related references, see sections 203(1), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of , as modified, set out as a note under . For establishment of U.S. Customs and Border Protection in the Department of Homeland Security, treated as if included in as of , see , as amended generally by , and , set out as a note under .

Floor Stocks Tax Treatment of Articles in Foreign Trade Zones

Pub. L. 101–508section 11218 of Pub. L. 101–508section 5001 of Title 26Notwithstanding this chapter, articles located in a foreign trade zone on the effective date of increases in tax under specific amendments by subject to floor stocks taxes under certain circumstances, see , set out as a note under , Internal Revenue Code.

Plan Amendments Not Required Until January 1, 1989

Pub. L. 99–514section 1140 of Pub. L. 99–514section 401 of Title 26For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1801–1899A] of require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after , see , as amended, set out as a note under , Internal Revenue Code.

Executive Documents

Transfer of Functions

79 Stat. 1317section 1 of this title64 Stat. 1280All offices of collector of customs, comptroller of customs, surveyor of customs, and appraiser of merchandise in Bureau of Customs of Department of the Treasury to which appointments were required to be made by President with advice and consent of Senate ordered abolished with such offices to be terminated not later than , by Reorg. Plan No. 1 of 1965, eff. , 30 F.R. 7035, , set out as a note under . All functions of offices eliminated were already vested in Secretary of the Treasury by Reorg. Plan No. 26 of 1950, eff. , 15 F.R. 4935, , set out in the Appendix to Title 5, Government Organization and Employees.