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Trade in Counterfeit Goods and Free Trade Zones

Evidence from Recent Trends

image of Trade in Counterfeit Goods and Free Trade Zones

This study examines the potential for the misuse of Free Trade Zones (FTZs) for trade in counterfeit and pirated goods. It presents the evolution of the FTZs and the international legal framework in which they operate, the reasons for establishing such zones and the benefits they offer businesses, and, finally, the role these zones play in fuelling trade in counterfeit and pirated goods. It also analyses the links between the FTZs and trade in counterfeit products, and provides data on these links.

 

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The institutional framework to combat illicit trade activities in FTZs

While FTZs have existed for some time, in more recent decades their operation has been subject to international agreements, notably those of the World Trade Organization (WTO) and the World Customs Organization (WCO). The possibility of the misuse of FTZs for the purposes of illicit trade, for which the previous chapter provides some solid evidence, has also prompted a number of actors to foster multilateral actions to strengthen the regulation of zone activities. Most have focused on developing recommendations to more effectively combat corruption and money laundering.

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