Trade in Counterfeit Goods and Free Trade Zones
Evidence from Recent Trends
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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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FTZs and trade in fakes: Empirical evidence
Free Trade Zones can provide a range of advantages to countries that host them and to businesses that operate in these zones. However, light regulation applied to zones’ operations can attract parties engaged in illegal and criminal activities. Existing governance gaps can provide rogue operators with a relatively safe environment in which to carry out their illicit activities. Consequently, FTZs can facilitate trade in counterfeit and pirated products, as well as smuggling and money laundering.
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