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New Jersey Advantage > International Trade > Foreign Trade Zones > Goods Destined for U.S. Consumption
Goods Destined for U.S. Consumption
The entry, classification, and appraisement of merchandise transferred from a foreign-trade zone is affected by the "status" of the merchandise.

1) Privileged foreign status: Prior to any manipulation or manufacture which would change its tariff classification, an importer may apply to the port director to have imported merchandise in the zone given privileged foreign status. The merchandise is classified and appraised and duties and taxes are determined as of the date the application is filed. When such merchandise is transferred from the zone for U.S. consumption, either in its original state or after manipulation or manufacture, the applicable duties and taxes would be paid based on the rate established when foreign privileged status was granted.

2) Zone restricted status: Merchandise transferred to a zone from the Customs territory for storage or for the purpose of satisfying a legal requirement for exportation or destruction is considered exported and cannot be returned to the Customs territory for consumption unless the Foreign-Trade Zones Board rules that its return is in the public interest. The Status of merchandise transferred to a zone under these circumstances is "zone restricted." Zone restricted merchandise may not be manipulated, except to destroy it, or manufactured in a zone. As in the case of privileged status, the zone user must apply for zone restricted status on the appropriate Customs form.

3) Nonprivileged foreign status: Nonprivileged foreign status is a residual category for merchandise which does not have privileged or zone restricted status. Articles composed entirely of, or derived entirely of, nonprivileged merchandise are classified and appraised in their condition at the time of transfer into the Customs territory for consumption or for Customs bonded warehousing.

4) Domestic status: Domestic status, which may be approved upon application to the port director, is available for merchandise which is (a) the growth, product, or manufacture of the United States on which all internal revenue taxes, if applicable, have been paid, (b) previously imported merchandise on which all internal revenue taxes have been paid, or (c) merchandise previously admitted free of duty. Domestic merchandise may be admitted to a zone without a Customs permit, and also removed from a zone without a Customs permit, if it has not been combined with any other merchandise of any other status.

5) Articles of mixed status: Since manipulation and manufacture generally are permitted in a zone, articles transferred to the Customs territory may be composed in part of, or derived in part from, merchandise that is privileged and nonprivileged, whether foreign and/or domestic. The articles are appraised according to the status of the merchandise of which they are composed or from which they were derived, as explained above. Additionally, foreign merchandise, subject to specified Customs controls and conditions, may be temporarily removed from a zone without formal entry for the performance of certain limited operations and, thereafter, returned in the same zone status to the zone from which it is removed. This procedure is designed to remove unnecessary burdens on zone inventory and accounting procedures where, in doing so, there is no danger to the revenue.