An article from RUSI on 9th August argues that the plan to introduce 10 freeports across the UK after Brexit has drawn attention in recent weeks. Introducing these provenly risky ‘special economic zones’ sits uneasily alongside the UK’s wider efforts to ramp up the fight against economic crime.  It notes that, alongside any normal trading activity, and like other freeports across the world, the zones may also be used to store – without tax – high-value goods, including art, precious metals and fine wine. Such tax-free perks have transformed some freeports into self-storage units for many of the world’s wealthiest people. The UK has had freeports in the past [though these largely died out, as alternative customs warehousing and other regimes – under EU rules – meant many, if not all, the advantages of a free zone could be acquired without being tied to a single, defined physical location, such as a port or airport].  The article says that while freeports offer tantalising business benefits, they are also well-known facilitators of illicit trade and money laundering, citing RUSI research, a recent EU report and UNESCO warning of a thriving trade in stolen antiquities stored and shipped through freeports – in 2014, Swiss and Italian police discovered 45 crates of stolen archaeological relics worth up to €9 million in Geneva Free Port.40.  The article notes that the International Chamber of Commerce in 2017 recommended to all countries that they should specify in law that special economic zones are only outside of traditional customs’ jurisdictions in so far as duties and taxes are concerned – and that all other national laws, and indeed customs inspections procedures, should be observed as normal. The article suggests that this is one way in which the UK should be seeking to minimise the risks of introducing new freeports.  In the absence of a comprehensive plan to mitigate the risks introduced by freeports – or indeed any acknowledgement that these risks exist – the proposal places a further burden on the civil servants and law enforcement agencies.

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section


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