A new report from ICC’s Business Action to Stop Counterfeiting and Piracy (BASCAP) initiative calls for increased regulation and better management of free trade zones (FTZs) to stop the alarming trend of the use of FTZs to facilitate the manufacture, distribution, and sale of counterfeit products.
The report, Controlling the Zone: Balancing facilitation and control to combat illicit trade in the world’s Free Trade Zones, looks at the increasing vulnerability of FTZs to criminal activities that are facilitating the global trade of counterfeit and pirated products. It summarizes the circumstances that have enabled the exploitation of FTZs, including an examination of weaknesses in international agreements, national legislation and judicial enforcement.
National governments encourage the creation of FTZs to increase trade and attract investment by removing or reducing duties and tariffs, softening customs controls and largely decreasing oversight in FTZs. These incentives have simultaneously made it easier for criminals to set up illicit operations, with increasing evidence showing that FTZs are being exploited to facilitate the international trade in counterfeit and pirated goods.
Last year, USCIB welcomed the Obama administration’s rollback of planned changes to the rules governing U.S. free trade zones. USCIB had earlier said some of the proposed changes would impose significant hurdles for exporters.
Read more and download the report on the ICC website.