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{{Short description|Geographic area where economic activity between and within countries is less regulated}}
{{About|the special economic zones within countries||Free Zone (disambiguation){{!}}Free Zone}}
{{Redirect|FTZ}}
{{taxation}}
{{redirect-distinguish-text|Free port|various places named [[Freeport (disambiguation)|Freeport]]}}
{{redirect-distinguish-text|Porto franco|Brazilian city [[Porto Franco]]}}
{{redirect-distinguish-text|Zona Franca|Barcelona, Spain district [[Zona Franca – Port]]}}
{{Expand language|otherarticle=Zona franca|langcode=Es|date=September 2020}}

A '''free-trade zone''' ('''FTZ''') is a class of [[Special economic zone#Types|special economic zone]].<ref>[https://elibrary.ru/download/elibrary_41726948_30519387.pdf УПРАВЛЕНИЕ ОСОБЫМИ ЭКОНОМИЧЕСКИМИ ЗОНАМИ СУБЪЕКТА] РФ Масаев С.Н. В сборнике: XIII Всероссийское совещание по проблемам управления ВСПУ-2019 Труды. Под общей редакцией Д.А. Новикова. 2019. С. 1773-1778.</ref><ref>Masaev S. [https://ieeexplore.ieee.org/document/8910997 Destruction of the Resident Enterprise in the Special Economic Zone with Sanctions]. Publisher: IEEE. 2019</ref> It is a geographic area where [[goods]] may be [[imported]], stored, handled, manufactured, or reconfigured and re-[[exported]] under specific [[customs]] regulation and generally not subject to [[customs duty]]. [[Free trade]] zones are generally organized around major [[seaport]]s, [[international airport]]s, and national frontiers—areas with many geographic advantages for trade.<ref>[https://www.britannica.com/EBchecked/topic/218417/free-trade-zone "Free-trade zone"], [[Encyclopædia Britannica]]. Retrieved 28 August 2016.</ref>

==Definition==
The [[World Bank]] defines free trade zones as "small, fenced-in, [[duty-free]] areas, offering warehousing, storage, and distribution facilities for trade, [[transshipment]], and [[re-export]] operations".<ref>{{citation |title=Special Economic Zone: Performance, Lessons Learned, and Implication for Zone Development |publisher=World Bank |location=Washington DC |year=2008 |chapter-url=http://documents.worldbank.org/curated/en/343901468330977533/Special-economic-zone-performance-lessons-learned-and-implication-for-zone-development |chapter=Zone Definition |pages=9–11 }}</ref> Free-trade zones can also be defined as [[Labor intensity|labor-intensive]] [[manufacturing]] centers that involve the import of [[raw material]]s or components and the export of [[factory]] products, but this is a dated definition as more and more free-trade zones focus on service industries such as software, back-office operations, research, and financial services.

===Synonyms===
Free-trade zones are referred to as "foreign-trade zones" in the [[United States]] (Foreign Trade Zones Act of 1934),<ref name=Tiefenbrun2012>{{Citation | last = Tiefenbrun | first = Susan | title = Tax Free Trade Zones Of The World And In The United States | publisher = Edward Elgar Publishing | year = 2012 | url = https://books.google.com/books?id=Bdz5eG3b2nwC | isbn = 978-1-84980-243-7 }}</ref> where FTZs provide customs-related advantages as well as exemptions from state and local inventory taxes. In other countries, they have been called "duty-free export processing zones," "export-free zones," "export processing zones," "free export zones," "free zones," "industrial free zones," "investment promotion zones," "maquiladoras," and "special economic zones".<ref name=Tiefenbrun2012 /><ref>{{citation |url=https://www.britannica.com/topic/special-economic-zone |title=Special Economic Zone (SEZ): Chinese Economics |encyclopedia=Encyclopædia Britannica |access-date=September 16, 2016 }}</ref> Some were previously called "free ports". Free zones range from specific-purpose manufacturing facilities to areas where legal systems and economic regulation vary from the normal provisions of the country concerned.

Free zones may reduce or eliminate taxes, customs duties, and regulatory requirements for registration of business. Zones around the world often provide special exemptions from normal immigration procedures and foreign investment restrictions as well as other features. Free zones are intended to foster economic activity and employment that could occur elsewhere.<ref>Farole, Akinci, ed., "Special Economic Zones: Progress, Challenges and Future Directions, World Bank, 2011</ref>

==Export-processing zone==
An '''export-processing zone''' ('''EPZ''') is a specific type of FTZ usually set up in developing countries by their governments to promote industrial and commercial exports. According to the World Bank, "an export processing zone is an industrial estate, usually a fenced-in area of 10 to 300 hectares, that specializes in manufacturing for export. It offers firms free trade conditions and a liberal regulatory environment. Its objectives are to attract foreign investors, collaborators, and buyers who can facilitate entry into the world market for some of the economy's industrial goods, thus generating employment and foreign exchange".<ref>{{citation |publisher=World Bank |location=Washington DC |title=Export Processing Zones |year=1992 |url=http://documents.worldbank.org/curated/en/400411468766543358/pdf/multi-page.pdf |series=Policy and Research Series }}</ref> Most FTZs are located in [[Developing country|developing countries]]; [[Brazil]], [[Colombia]], [[India]], [[Indonesia]], [[El Salvador]], [[China]], the [[Philippines]], [[Malaysia]], [[Bangladesh]], [[Nigeria]], [[Pakistan]], [[Mexico]], the [[Dominican Republic]], [[Costa Rica]], [[Honduras]], [[Guatemala]], [[Kenya]], [[Sri Lanka]], [[Mauritius]], and [[Madagascar]] all have EPZ programs.<ref name=Sargent-Matthews>{{cite web|author1=Sargent, John|author2=Matthews, Linda|title=China vs. Mexico in the Global EPZ Industry: Maquiladoras, FDI Quality and Plant Mortality|url=http://ea.panam.edu/cbes/pdf/WorkingPaper1-06.pdf|publisher=University of Texas Pan America|access-date=2009-11-11|url-status=dead|archive-url=https://web.archive.org/web/20100716003319/http://ea.panam.edu/cbes/pdf/WorkingPaper1-06.pdf|archive-date=2010-07-16}}</ref> In 1997, 93 countries had set up export processing zones, employing 22.5 million people, and five years later, in 2003, EPZs in 116 countries employed 43 million people.<ref name=Sargent-Matthews />

=== Brazil ===
In Brazil, 25 Export-Processing Zones have been authorized in 17 states, and 19 of them have been implemented.<ref>{{Cite web|url=http://www.mdic.gov.br/index.php/zpe/institucional/86-assuntos/zonas-de-processamento-de-exportacao-czpe/895-czpe|title=Zonas de Processamento de Exportação|website=Ministério da Economia INDÚSTRIA, COMÉRCIO EXTERIOR E SERVIÇOS|access-date=2020-02-28}}</ref> Brazilian government launched the first Export processing zones in 1988, aiming to fight the unbalances in the country.<ref name="brazil">{{Cite web|url=https://tax.thomsonreuters.com/blog/the-free-trade-zones-in-brazil/|title=The Free Trade Zones in Brazil|last=de Souza Feitosa|first=Roberto|date=2016-02-18|website=Tax & Accounting Blog Posts by Thomson Reuters|language=en-US|access-date=2020-02-28}}</ref> The first EPZ area was located near of the [[Port of Pecem|Port of Pecém]] in [[Ceará]].<ref name="brazil" /> Companies in these areas are benefited from tax exemptions and incentives at the [[Tax|ICMS Tax]] (State Value-Added Tax). Some Brazilian states offer other regional incentives.<ref>{{Cite web|url=http://www.mdic.gov.br/index.php/zpe/epz|title=Export Processing Zones (EPZ)|website=Ministério da Economia INDÚSTRIA, COMÉRCIO EXTERIOR E SERVIÇOS|access-date=2020-02-28}}</ref> Companies also can take advantage of a foreign exchange treatment supported by the law that created the EPZ and proximity of customs authorities who have offices inside the EPZ.<ref name="brazil" />

===China===
[[China]] has specific rules differentiating an EPZ from a FTZ. For example, 70% of goods in EPZs must be exported, but there is no such quota for FTZs.<ref name=Yusen>{{cite web|title=Compare|url=http://www.jp.yusen-logistics.com/china/english/compare/|publisher=Yusen Logistics Co., Ltd.|access-date=9 May 2014|archive-date=12 May 2014|archive-url=https://web.archive.org/web/20140512232246/http://www.jp.yusen-logistics.com/china/english/compare/|url-status=dead}}</ref>
==Free economic zone==
'''Free economic zones''' ('''FEZ'''), '''free economic territories''' ('''FETs''') or '''free zones''' ('''FZ''') are a class of [[special economic zone]] (SEZ) designated by the [[trade]] and [[commerce]] administrations of various [[Country|countries]]. The term is used to designate areas in which companies are [[customs duty|taxed]] very lightly or not at all to encourage [[Economics|economic activity]]. The [[tax]]ation rules and [[duty (tax)#Customs duty|duties]] are determined by each country.<ref>{{Cite book|last=Мarynсhak|first=Yеvhеn|url=https://doi.org/10.36074/tmafmseoid.ed-1.15|title=IMPORTANCE OF A FREE ZONES FOR PUBLIC FINANCES. Theoretical and methodological approaches to the formation of a modern system of enterprises, organizations and institutions' development (1st ed.)|publisher=Primedia eLaunch LLC.|year=2019|isbn=978-1-64669-378-8|location=Dallas|pages=157–158|doi=10.36074/tmafmseoid.ed-1.15 |s2cid=212956756 }}</ref> The [[World Trade Organization]] (WTO) Agreement on Subsidies and [[Countervailing duties|Countervailing]] Measures (SCM) has content on the conditions and benefits of free zones.<ref>{{cite web |title=WTO Subsidies and Countervailing Measures: overview. Agreement on Subsidies and Countervailing Measures ("SCM Agreement") |url=https://www.wto.org/english/tratop_e/scm_e/subs_e.htm |website=www.wto.org |publisher=World Trade Organization |archive-url=https://web.archive.org/web/20201223160643/https://www.wto.org/english/tratop_e/scm_e/subs_e.htm |archive-date=23 December 2020 |url-status=live}}</ref>

Some special economic zones are called '''free ports''' or '''free trade ports'''. Sometimes they have historically been endowed with favorable customs regulations, such as the free [[port of Trieste]], or the newer free trade port on [[Boao Hope City|Hainan Island]].<ref>{{cite web |title=Hainan's Free Trade Port: Medical Tourism and the Development of Boao Lecheng Pilot Zone |url=https://research.hktdc.com/en/article/MTc1Njc2MDAyNQ |website=hktdc.com |date=8 November 2024}}</ref>

===Definition===
The [[definition]] should be understood in meaning [https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM:l06025 The International Convention on the Simplification and Harmonization of Customs Procedures] (Revised Kyoto Convention) uses the term “free zones” which the revised [[Treaty|convention]] describes as “a part of the territory of a Contracting Party where any goods introduced are generally regarded, insofar as import [[Duty|duties]] and [[tax]]es are concerned, as being outside the [[customs territory]]”.

According to the World Bank,<ref>{{cite web | url=https://www.zendeq.com/kb/free-economic-zones/#pp-toc-4av3xryf72kn-anchor-1 | title=Free Economic Zones (FEZs) & Special Economic Zones (SEZs) • ZENDEQ }}</ref> the main types of special economic zones are:

# Free-trade zones (FTZ)
# Export processing zones (EPZ)
# Free economic zones (FZ/FEZ)
# Industrial parks/estates (IE)
# Free ports
# Bonded logistics parks (BLP)
# Urban enterprise zones

=== History ===
An early type of special economic zone was ''free ports'', these historically were endowed with favorable customs regulations. In modern times, ''free port'' has come to mean a specific type of special economic zone, for example [[LADOL]].

All "free ports" in the world were permitted by the respective states, save the [[Free Territory of Trieste|Free Port of Trieste]] that with the signing of the 16th [[Resolution (law)|Resolution]] of the [[United Nations Security Council|Security Council of the United Nations]]<ref>{{Cite web | url=https://undocs.org/S/RES/16(1947) | title=S/Res/16(1947) - e - S/Res/16(1947)}}</ref> (10 January 1947) and the signing of the [[Treaty of Peace with Italy, 1947|Treaty of Peace with Italy]]<ref>[http://treaties.un.org/doc/Publication/UNTS/Volume%2049/v49.pdf "Treaty Series Vol. 49"] United Nations. Retrieved 2023-12-10.</ref> (10 February 1947, ratified 15 September 1947) was put territorially under the [[sovereignty]] of the [[United Nations]] itself. As cited on Annex VIII, Article 3, paragraph 2: ''"The establishment of special zones in the Free Port under the exclusive jurisdiction of any State is incompatible with the status of the Free Territory and of the Free Port"''. For example, it was not possible to apply the "Italian Law on Ports" in the extraterritorial free zones of the UN Free Port of Trieste with the effect that all actual territorial concessions were null and void.

In 1954, the Free Territory of Trieste was dissolved and given to its neighbours, Italy and Yugoslavia.

== Background ==
The world's first-documented free-trade zone was established on the Greek Island of [[Delos]] in 166 BCE. It lasted until about 69 BCE when the island was overrun by pirates. The Romans had many ''[[civitas libera]],'' or free cities, some of which could coin money, establish their own laws, and not pay an annual tribute to the [[Roman Emperor]]. These continued through at least the first millennium CE. In the 12th century, the [[Hanseatic League]] began operating in Northern Europe and established trading colonies throughout Europe. These Free Trade Zones included Hamburg and the [[Steelyard]] in London. The Steelyard, like other Hansa stations, was a separate walled community with its own warehouses, weighing house, chapel, [[counting house]]s, and residential quarters. In 1988, remains of the former Hanseatic trading house, once the largest medieval trading complex in Britain, were uncovered by archaeologists during maintenance work on Cannon Street Station. [[Shannon, County Clare|Shannon]], [[Ireland]] ([[Shannon Free Zone]]),<ref>{{cite web|url=http://www.shannondevelopment.ie/|title=Welcome to Shannon Development|access-date=2010-11-11|archive-date=2011-05-11|archive-url=https://web.archive.org/web/20110511151239/http://www.shannondevelopment.ie/|url-status=dead}}</ref> established in 1959, has claimed to be the first "modern" free trade zone. The Shannon Zone was started to help the city airport adjust to a radical change in aircraft technology that permitted longer range aircraft to skip previously required refueling stops in Shannon. It was an attempt by the Irish government to maintain employment around the airport so that the airport would continue to generate revenue for the Irish economy. It was hugely successful and is still in operation today. Other free zones to note are the [[Kandla|Kandla Free Zone]] in India, which started in about 1960, and the [[Kaohsiung Export Processing Zone]] in Taiwan, which started in 1967. The number of worldwide free-trade zones proliferated in the late 20th century.

Corporations setting up in a zone may be given a number of regulatory and fiscal incentives, such as the right to establish a business, the right to import parts and equipment without duty, the right to keep and use foreign exchange earnings, and sometimes income or property [[tax break]]s. There may also be other incentives relating the methods of customs control and filing requirements. The rationale is that the zones will attract investment, create employment, and thus reduce poverty and unemployment, stimulating the area's economy. These zones are often used by multinational corporations to set up factories to produce goods (such as clothing, shoes, and electronics).

Free-trade zones should be distinguished from [[free trade area]]s. A free trade zone is normally established in a single country, although there are a few exceptions where a free zone may cross a national border, such as the Syrian/Jordanian Free Trade Zone.<ref>{{Cite web|url=http://www.hurriyetdailynews.com/Default.aspx?pageID=438&n=syria-jordan-open-a-free-trade-zone-2000-05-29|title= Syria, Jordan open a free trade zone|website=Hürriyet Daily News |access-date=2017-01-06}}</ref> Free trade areas are set up between countries; for example, the Latin America Free Trade Association (LAFTA) was created in the 1960 Treaty of Montevideo by [[Argentina]], [[Brazil]], [[Chile]], [[Mexico]], [[Paraguay]], [[Peru]], and [[Uruguay]]; and the [[North American Free Trade Agreement]] was established between Mexico, the United States, and Canada. In free trade areas, tariffs are only lowered between member countries. They should also be distinguished from customs unions, like the former European Economic Community, where several countries agree to unify customs regulations and eliminate customs between the union members.

Free-trade zones have more recently been also called [[special economic zones]] in some countries. [[Special economic zones]] (SEZs) have been established in many countries as testing grounds for the implementation of liberal market economy principles. SEZs are viewed as instruments to enhance the acceptability and the credibility of the transformation policies and to attract domestic and foreign investment. The change in terminology has been driven by the formation of the World Trade Organization (WTO), which prohibits members from offering certain types of fiscal incentives to promote the exports of goods, thus why the term Export Processing Zone (EPZ) is no longer used with newer zones. For example, India converted all of its EPZs to SEZs in 2000.

In 1999, there were 43 million people working in about 3,000 FTZs spanning 116 [[countries]] and producing [[clothes]], [[shoe]]s, [[Sneaker (footwear)|sneakers]], [[Consumer electronics|electronics]], and [[toy]]s. The basic objectives of economic zones are to enhance foreign exchange earnings, develop export-oriented industries, and generate employment opportunities.

== US Foreign-Trade Zones Board ==
In the United States, the Foreign-Trade Zones Board (FTZB), established under the Foreign-Trade Zones (FTZ) Act of 1934, is led by the [[Secretary of Commerce]] and the [[Secretary of the Treasury]].

In January 2009, the Foreign-Trade Zones Board adopted an FTZ Board staff proposal to make what it called the [[Alternative Site Framework]] (ASF) as a means of designating and managing general-purpose FTZ sites through reorganization. The ASF provides Foreign-Trade Zone grantees greater flexibility to meet specific requests for zone status by utilizing the minor boundary modification process. The theory of the ASF is that by more closely linking the amount of FTZ-designated space to the amount of space activated with Customs and Border Protection, Zone users would have better and quicker access to benefits.

When an FTZ grantee evaluates whether or not to expand its FTZ project in order to improve the ease in which the Zone may be utilized by existing companies, as well as how it attracts new prospective companies, the Alternative Site Framework (ASF) should be considered. The ASF may be an appropriate option for certain Foreign-Trade Zone projects, but the decision of whether to adopt the new framework and what the configuration of the sites should be requires careful analysis and planning. Regardless of the choice to expand the FTZ project, the sites should be selected and the application drafted in such a manner as to receive swift approval while maximizing benefit to those that locate in the Zone. Successful zone projects are generally the result of a plan developed and implemented by individuals who understand all aspects of the FTZ program.<ref>{{cite web|title=Foreign-Trade Zone Alternative Site Framework (ASF)|url=http://www.ftzcorp.com/ftz-services/alternative-site-management-framework-asf.aspx|publisher=Foreign Trade Zone Corporation|access-date=April 1, 2013}}</ref>

The FTZB approves the reorganization of Foreign Trade Zone (FTZ) 32 under the alternative site framework. The application submitted by its grantee, the Greater Miami Foreign Trade Zone was approved and officially ordered by the FTZB on January 8, 2013. From California to Oklahoma, North Carolina, and New York State, FTZs all across the United States have recently {{when|date=July 2023}} been making use of the flexible opportunities offered by the Alternative Site Framework (ASF) program. The ASF program is designed to serve zone projects that want the flexibility to both attract users/operators to certain fixed sites but also want the ability to serve companies at other locations where the demand for FTZ services will arise in the future. FTZ 32 was founded in 1979 and processes over $1 billion in goods with products from more than 65 countries and exported to more than 75 countries worldwide with speed and efficiency. According to the official order from the FTZB, FTZ 32 existing site 1, Miami Free Zone, will be classified as a magnet site.<ref name="US Foreign-Trade Zones Board">{{cite web|url=http://ia.ita.doc.gov/ftzpage/19uscftz/ch1a.html#81b|archive-url=https://web.archive.org/web/20021020171556/http://www.ia.ita.doc.gov/Ftzpage/19uscftz/ch1a.html#81b|url-status=dead|archive-date=October 20, 2002|title=81b. Establishment of zones|access-date=10 April 2013}}</ref>

== UAE Free Zones ==

Due to growing business opportunities in the [[United Arab Emirates]] (UAE), the UAE government has introduced 'Free Zones' to make it easier for foreigners to invest and operate in the UAE. In these Free Zones, investors benefit from maintaining full business ownership and receiving tax exemptions.

Some of the benefits of setting up business in [[List of free-trade zones in the United Arab Emirates|UAE Free Zones]] are:

* No Corporate Tax, 100% exemption<ref>{{cite web | url=https://u.ae/en/information-and-services/finance-and-investment/taxation/corporate-tax | title=Corporate tax (CT) - the Official Portal of the UAE Government }}</ref> provided that business done between the free zone company and any mainland companies are under 375,000 AED a year.<ref>{{cite web | url=https://www.cnbc.com/2022/01/31/the-uae-introduces-its-first-ever-corporate-taxes-set-to-start-in-2023-.html | title=The UAE introduces its first-ever corporate taxes, set to start in 2023 | website=[[CNBC]] | date=31 January 2022 }}</ref>
* 100% ownership of business
* Bank accounts can be opened in a business's name
* Reasonable renewal fees
* 100% import and export tax exemptions
* 100% repatriation of profits and capital
* Investor VISA

Some Free Zones in UAE are:
* [[Meydan Free Zone]] (MFZ)
* [[Ajman Free Zone]]
* [[Ras Al Khaimah Economic Zone]] (RAKEZ)
* International Free Zone Authority (IFZA)
* Sharjah Media City Free Zone (SHAMS)
* [[Hamriyah Free Zone]]

== Kuwait Free Trade Zone ==
Kuwait's free trade zone (FTZ) was formally established in 1999 to expand businesses and lure the export industry. The zone was located in the western part of the commercial port of [[Shuwaikh Port|Shuwaikh]]. It was the only free trade zone in the country.

In 2019, the Council of Ministers cancelled the free-zone, leaving Kuwait without a special economic zone.<ref>{{cite news | url=https://www.zawya.com/en/economy/kuwaits-government-cancels-adopted-free-trade-zone-decision-tzxyzeus | title=Kuwait's government cancels adopted Free Trade Zone decision|website=Zawya }}</ref>

==Strategic benefits==
[[Aberdeen Group, Inc.|Aberdeen Group]] research published in 2013 noted that best-in-class companies make [[business strategy|strategic]] use of free-trade zones as a means of reducing inbound trade costs, shortening import timescales, and optimising the balance of their corporate sourcing and operational activities.<ref>{{Cite web |title=Supply Chain Digest - The best in supply chain management and logistics news, insight, education, opinion and education |url=https://www.scdigest.com/experts/AmberRoad_13-12-19.php?cid=7686 |access-date=2023-10-31 |website=www.scdigest.com}}</ref>

==Criminal use==
The European Union, in 2020, introduced new stricter rules to identify and report suspicious activities at free ports and zones in response to the "high incidence of corruption, tax evasion, and criminal activity", with a further review to take place in the following year, The [[European Parliament]] suggested that increasing demand for free ports could be partly a response to global crackdowns on tax evasion. The [[European Commission]] in a report said that free ports were popular for the storage of art, precious stones, antiques, gold, and wine as alternative assets to cash, and posed an emerging threat in multiple ways: allowing counterfeiters to land consignments and tamper with loads and paperwork, then re-export the products without customs formalities, disguising the actual origin and nature of the goods and their supplier. The commission said they were also used for narcotics trafficking, the illegal ivory trade, people smuggling, VAT fraud, corruption and money laundering. "Legal businesses owned by criminals remain key to [[money-laundering]] activities ... free ports are perceived as facilities that protect their clients' identity and financial dealings, much as private banks used to."

As an example, the commission cited Swiss authorities' 2016 seizure of cultural relics looted from the Middle East being stored in Geneva's free ports.<ref name="euaction">{{cite web |url=https://www.theguardian.com/world/2020/feb/10/eu-clamps-down-free-ports-zones-crime-terror-links |title=EU clamps down on free ports over crime and terrorism links |newspaper=The Guardian |author= Daniel Boffey |date= 10 February 2020}}</ref><ref>{{cite web | url=https://www.swissinfo.ch/eng/russian-war-in-ukraine-renews-pressure-on-swiss-free-ports/47671636 | title=Russian war in Ukraine renews pressure on Swiss free ports | date=17 June 2022 }}</ref>

The free port system has been accused of facilitating international art crime, allowing stolen artworks to remain undetected in storage for decades.<ref>{{cite web |url=https://www.theartnewspaper.com/news/experts-identify-top-six-scandals-amid-boom-in-art-crime |title=Experts identify top six scandals amid boom in art crime |newspaper=The Art Newspaper|date=30 June 2015 |author1=Rachel Corbett|author2=Julia Halperin|author3=Richelle Simon}}</ref> Freeports' lax regulation enables criminals to operate in secrecy. Freeports may facilitate money laundering and tax evasion by obscuring the real beneficial owners of criminal assets, which hinders authorities' efforts to trace criminal profits and recover taxes.<ref>{{cite journal|last1=Gilmour|first1=Paul Michael|date=2022|title=Freeports: Innovative trading hubs or centres for money laundering and tax evasion?|journal=Journal of Money Laundering Control|volume=25|issue=1|pages=63–71|doi=10.1108/JMLC-01-2021-0002|s2cid=236602615 |url=https://researchportal.port.ac.uk/portal/en/publications/freeports-innovative-trading-hubs-or-centres-for-money-laundering-and-tax-evasion(0a303a3c-1583-4090-a4f0-86e20e97d517).html }}</ref>

==Criticism==

Sometimes the domestic government pays part of the initial cost of factory setup, loosens [[environmental protection]]s and rules regarding negligence and the [[Occupational safety and health|treatment of workers]], and promises not to ask payment of taxes for the next few years. When the [[Tax|taxation-free]] years are over, the corporation that set up the factory without fully assuming its costs is often able to set up operations elsewhere for less expense than the taxes to be paid, giving it leverage to take the host government to the bargaining table with more demands, but parent companies in the United States are rarely held accountable.<ref>Millen, Joyce; Holtz, Timothy (2007). "Dying for Growth", in {{google books|L3CbQAAACAAJ|The Politics of Globalization: A Reader}}, ed. Mark Kesselman. Houghton Mifflin.</ref>

Political writer [[Naomi Klein]] has also criticized the transient nature of FTZs, noting the factory closures connected to the [[1997 Asian financial crisis]]. She criticized the low wages and long hours, citing workdays of twelve or more hours in Indonesia, Philippines, Southern China, and Sri Lanka circa 2000.<ref name=NoLogo>{{cite book|title=No Logo|date=2000|publisher=Flamingo|pages=204–229|first=Naomi|last=Klein}}</ref>
== List of free economic zones by country ==
{{main|List of free economic zones}}

== See also ==
*[[Aggressive legalism]]
*[[Bonded logistics park]]
*[[Foreign trade zones of the United States]]
*[[Free trade areas in Europe]]
*[[Free economic zone]]
*[[Free-trade area]]
*[[Free trade]]
*[[Open Balkan]]
*[[Craiova Group]]
*[[Central European Free Trade Agreement|CEFTA]]
*[[Index of international trade topics]]
*[[List of free-trade zones]]
*[[List of free-trade zones in Dubai]]
*[[Shanghai Free-Trade Zone]]
*[[Special economic zone]]
*[[Factory (trading post)]]
*[[Bonded warehouse]]
*[[Four Asian Tigers]]

== References ==
{{Reflist|30em}}
==Bibliography==
{{Refbegin}}
* {{citation |chapter-url=http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/conventions/pf_revised_kyoto_conv/~/link.aspx?_id=9415CF3F04D44BB1A62B44853A63AAC1&_z=z |chapter=Specific Annex D: Customs Warehouses and Free Zones |title= International Convention on the Simplication and Harmonization of Customs Procedures (Revised Kyoto Convention) |publisher=[[World Customs Organization]] |year=1999
| ref = {{harvid|Revised Kyoto Convention|1999}}
}}

{{refend}}
==External links==
* [http://hualingfiz.ge/ Hualingfiz.ge] Free Industrial Zone
* [http://www.uaefreezones.me/uaefreezones.me/uae_free_zones.asp List of Free Zones in United Arab Emirates]

{{Terms for types of country subdivisions}}
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{{DEFAULTSORT:Free Trade Zone}}
[[Category:Special economic zones|*]]
[[Category:Tax avoidance]]
[[Category:Commercial policy]]
[[Category:Free trade|Zone]]

Free-trade zone - Revision history

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