First Global Free Zone Conference paved the way for Free Zones’ competitiveness, safety and sustainability with solid and enhanced Customs involvement

18 December 2020

With the theme of Meeting the SDGs - Ensuring Customs involvement for Free Zones’ competitiveness, safety and sustainability, the First Global Free Zone Conference was virtually held on 14th December 2020 with the support of Japan’s Customs Cooperation Fund.

Around 600 policy makers as well as operational experts from Customs administrations, free zone authorities, manufacturing companies, international organizations, academia, and other stakeholders from over 90 countries gathered and actively joined the unique and strategic dialogue to explore the collaborative solutions for the sustainable development and renewal of free zones with Customs involvement.

“Today, arguing for relaxed Customs procedures and controls in free zones under the guise of promoting economic development seems rather outdated. Benefits can be provided without sacrificing the safety and security of trade”, said the WCO Secretary General, Dr. Kunio Mikuriya, in his opening speech.“Customs should be there as one of main Authorities and need to coordinate with all public and private authorities, with the objective of contributing to a safe and sustainable global trade ecosystem”, he reiterated to the 600 participants.

H.E. Ahmad Abdullah Bin Lahej Alfalasi, Director General of Federal Customs Authority, United Arab Emirates (UAE) highlighted in his inspiring speech that the UAE continues to work on reviewing the Customs procedures for free zone to cope with the new challenges that Customs faces, including the application of Authorized Economic Operator programs to those companies within free zones. He further called upon the International Customs Community, the private sector, and relevant government agencies to have further collaboration, to ensure the safety and security of the border while supporting national and international economic growth.

Introducing the recently published OECD Free Zone Recommendation with referring to WCO Practical Guidance on Free Zone endorsed by December 2020 Council, Mr. Chris Martin, the Co-Chair of the OECD Task Force on Countering Illicit Trade (TF-CIT) mentioned that it was reassuring and persuasive that, both international instruments on free zones bring focus to the same core elements with the same goals and are complementary to one another in relation to the envisaged outcomes.

He further explained that these core elements include: territoriality of free zones; full Customs involvement and approval process for free zone Operators; access to data via integrated IT systems; effective surveillance, control and audit by Customs and other competent authorities; and more effective international cooperation.

During a high-level dialog with the distinguished speakers from McKinsey, Panama, the United States and Lebanon who shared their ongoing initiatives with respect to collectively addressing challenges in free zones, the Conference acknowledged the economic opportunities of free zones and the significance of Customs strategic involvement in the overall life cycle of free zones. 

Furthermore, with concrete facts provided by the speakers from International Chamber of Commerce (ICC), Toyota Motor Corporation and Jordan Customs, the Conference witnessed that now, more and more Customs administrations are actively engaged and involved in the management and control of free zones, which results in a number of illicit trade seizures .  In this context, the Financial Action Task Force (FATF) also welcomed the WCO Anti Money Laundering (AML)/combating the financing of terrorism (CTF) Programme, of which capacity building activities expanded to September 2022.

Learning from the analysis and expertise shared by United Nation Conference on Trade and Development (UNCTAD), the European Union and Renault Nissan Mitsubishi, the Conference also recognized the consequence of the unique treatment of free zones and the necessity for proper and consistent application of Rules of Origin for the economic competitiveness of free zones.

In his closing speech, Mr. Ricardo Treviño Chapa, WCO Deputy Secretary General, noted the significance of the Conference and its outcomes and concluded, “As the WCO theme for 2021 states, I hope this Conference and the WCO Practical Guidance on free zones will build the necessary momentum for Customs and all relevant parties to foster recovery, renewal and resilience for a sustainable supply chain in free zones”.
To follow up on this Conference, the WCO plans to provide capacity building activities to Member Customs administrations based on the findings in the WCO research paper on free zone and the WCO Practical Guidance on Free Zones.