Free economic zone

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Free port
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"Free port" redirects here. Not to be confused with various places named Freeport.
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Free economic zones (FEZ), free economic territories (FETs) or free zones (FZ) are a class of

taxed very lightly or not at all to encourage economic activity. The taxation rules and duties are determined by each country.[1] The World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures (SCM) has content on the conditions and benefits of free zones.[2]

Some special economic zones are called free ports. Sometimes they have historically been endowed with favorable customs regulations, such as the free port of Trieste.

Definition

The definition should be understood in meaning The International Convention on the Simplification and Harmonization of Customs Procedures (Revised Kyoto Convention) uses the term “free zones” which the revised convention describes as “a part of the territory of a Contracting Party where any goods introduced are generally regarded, insofar as import duties and taxes are concerned, as being outside the customs territory”.

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

Treaty of Peace with Italy[4] (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.

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

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.[5][6]

The free port system has been accused of facilitating international art crime, allowing stolen artworks to remain undetected in storage for decades.[7] 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.[8]

List of free economic zones by country

Main article: List of free economic zones

See also

References

  1. S2CID 212956756
    .
  2. ^ "WTO Subsidies and Countervailing Measures: overview. Agreement on Subsidies and Countervailing Measures ("SCM Agreement")". www.wto.org. World Trade Organization. Archived from the original on 23 December 2020.
  3. ^ "S/Res/16(1947) - e - S/Res/16(1947)".
  4. ^ "Treaty Series Vol. 49" United Nations. Retrieved 2023-12-10.
  5. ^ Daniel Boffey (10 February 2020). "EU clamps down on free ports over crime and terrorism links". The Guardian.
  6. ^ "Russian war in Ukraine renews pressure on Swiss free ports". 17 June 2022.
  7. ^ Rachel Corbett; Julia Halperin; Richelle Simon (30 June 2015). "Experts identify top six scandals amid boom in art crime". The Art Newspaper.
  8. S2CID 236602615
    .

Bibliography

External links

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