Further Information:

Free trade zones (FTZs)
; these are
typically general purpose fenced in,
duty-free areas offering warehousing,
storage and distribution facilities for
trade, transhipment, and re-export of
products. These are located in most
ports around the world.

Export Processing Zones (EPZs) are
industrial areas focusing on assembly
and manufacturing of intermediate
imports aimed primarily but not
exclusively at foreign markets.
Particular sectors include labor-
intensive, light manufacturing such as
garment production and the assembly
of electronics. EPZs also promote
linkages with the domestic economy by
encouraging technology transfer and
innovative industrial strategies. Certain
types of EPZs are sometimes called
Hybrid Export Processing Zones
because they combine the traditional
export focus of an EPZ with a sub-
divided area in which non-export
oriented activities can take place.

Enterprise zones are economic
development areas intended to
revitalize specific urban or rural areas
where they are located through tax
incentives and financial grants. These
are most often found in the developed
world.

Freeports typically the largest of the
zones, accommodate all types of
activities including tourism, retail sales,
and on-site residence, and accompany
a broader set of incentives and
benefits. Freeports are different from
traditional FTZs as they are not seen
as export drivers but areas promoting
overall economic growth linking the
zones with the overall economy of the
nation. This has also resulted in
greater expansion and liberalization of
the core set of policies present in most
free zone programs. The European
Union allows inward processing relief
and other customs schemes that
produce some of the benefits of free
zones without requiring formal zone
definition. In the UK, for example, free
ports do not offer significant benefits
beyond inbound processing relief
schemes. As a consequence ports like
Rotterdam have marketed themselves
as “freer than a Freeport”.

Single factory EPZ schemes provide
incentives similar to export processing
zones but are not a zone at all, rather
a single factory located anywhere in a
country which receives the special
duty free privileges of zones. In the
United States they are also called sub-
zones.

Foreign Trade Zones is the name of
the specially designated zones in the
United States. They are established in
or adjacent to a port of entry in which
all types of merchandise may be held
without being subject to U.S. Customs
duties and other taxes.

Special Economic Zones (SEZs):
SEZs extend the relaxed tax and
administration characteristics of FTZs
to investment arrangements, labour
laws, management practices, and
wage rate policies in specific areas of
the country. Originally this structure
applied only to China but versions now
exist in India and elsewhere. China has
proposed applying special treatment
within SEZs to promotion of real
estate, tourism, infrastructure
development and banking.

Sources: BearingPoint, ILO database;
WEPZA (2007); FIAS research.
FATF
There are currently over 3000 Free Trade Zones of one form or another in 135 countries around the world. In it's report on FTZs dated March,
2010, FATF highlighted the following systemic weaknesses that make FTZs vulnerable to money laundering abuse:

•  Inadequate anti-money laundering (AML) and combating the financing of terrorism (CFT) safeguards;
•  Relaxed oversight by competent domestic authorities;
•  Weak procedures to inspect goods and register legal entities, including inadequate record-keeping and information technology systems; and
•  Lack of adequate coordination and cooperation between zone and Customs authorities.

Please find below a list of countries that have Free Trade Zones: -
Free Trade Zones
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Traditional EPZ
Model

Hybrid EPZ
Model

Commercial
Free Zone

Single Factory

Freeport

Asia and the Pacific

Taiwan, China

Korea, Rep. of

Indonesia

Vietnam

Philippines

Bangladesh

India

Malaysia

Pakistan

Sri Lanka

China

Indonesia

Lao PDR

Korea, Democratic People’s Republic of

Philippines

Thailand

Vietnam

China

Japan

Malaysia

Fiji

China

Hong Kong, China

India

Indonesia

Korea, Rep. of

Macau

Malaysia

Philippines

Singapore

Americas

Argentina

Bahamas

Belize

Dominican Republic

Guatemala

Jamaica

Nicaragua

Peru

Trinidad and Tobago

Uruguay

Venezuela, R.B. de

Bolivia

Brazil

Colombia

Costa Rica

Cuba

Ecuador

El Salvador

Haiti

Honduras

Argentina

Bahamas

Belize

Brazil

Canada

Colombia

Curacao

Panama

Jamaica

Mexico

Bahamas

Chile

Colombia

Panama

Middle East and North Africa

Algeria

Iran, Islamic Rep. of  

Sudan

Bahrain

Egypt, Arab Rep. of  

Syrian Arab Rep.  

Tunisia  

Turkey

United Arab Emirates

Israel

Jordan

Kuwait

Lebanon

Libya

Morocco

Oman

Tunisia

Turkey

United Arab Emirates

Yemen, Republic of

 

 

Iran, Islamic Rep. of  

Jordan

Central and Eastern Europe and Central Asia

Slovenia

Belarus

Albania

Bosnia and Herzegovina  

Bulgaria

Croatia

Hungary

Kazakhstan

Kyrgyz Republic 

Latvia  

Lithuania  

Macedonia, FYR  

Moldova

Poland

Ukraine

Czech Republic  

Estonia  

Latvia  

Romania

Serbia

Montenegro

Slovak Republic  

Ukraine

Uzbekistan

 

Russian Federation

Sub-Saharan Africa

Cameroon

Cape Verde

Equatorial Guinea

Gambia, The

Ghana

Kenya

Mozambique

Namibia

Nigeria

Senegal

South Africa

Tanzania

Togo

Uganda

Zambia

Zimbabwe

Benin

Djibouti

Gabon

Liberia Mauritius

Tanzania

Togo

Burundi

Madagascar

Malawi

Mali

Mauritius

Senegal

Seychelles