Under ITAR, how is a Foreign Trade Zone defined?

The definition of a Foreign Trade Zone (FTZ) under ITAR identifies it as an integral part of the United States. This designation highlights that although FTZs are often thought of as areas that facilitate international trade and may appear distinct in terms of customs procedures, they remain under U.S. sovereignty and jurisdiction. Goods in an FTZ are considered to be outside of U.S. customs territory for tariff purposes, but FTZs themselves do not constitute a separate territory.

As a result, while goods may enter the FTZ without incurring tariffs, the FTZ is still fundamentally part of U.S. territory. This clarity is crucial for companies engaged in international trade, as it affects compliance with regulations like ITAR, which governs the export of defense and military-related technologies.

The confusion may arise with other choices that suggest a different status or function of the FTZ. Options that frame the FTZ as separate or outside U.S. laws mischaracterize its relationship to the U.S. legal framework. Thus, understanding the classification of FTZs as integral to the U.S. helps in grasping how they fit into broader trade and customs regulations.