Trade in Counterfeit Goods and Free Trade Zones
Evidence from Recent Trends
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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Executive Summary
Free trade zones (FTZs) have a long and cherished role in world trade, dating back to at least the early 1700s. They can provide numerous, unequivocal benefits to business and host countries. However, lightly regulated FTZs are also attractive to parties engaged in illegal and criminal activities, such as trade in counterfeit and pirated products or smuggling and money laundering, as these zones offer a relatively safe environment with both good infrastructure and limited oversight.
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