With the aim of responding to growing Customs and private-sector needs, and a desire to ensure the adequate application of Customs procedures and surveillance in Free Zones, the WCO Secretariat conducted research on the current situation with respect to Free Zones, including a literature review, an analysis of the 2018 WCO survey on Free Zones, and workshops and field studies, the results of which were analysed in WCO Research Paper No. 47: “Extraterritoriality” of Free Zones: The Necessity for Enhanced Customs Involvement”.

Based on the WCO Research Paper’s findings, a draft Practical Guidance on Free Zones (hereafter “FZ Guidance”) was developed and endorsed by the December 2020 Policy Commission after in-depth discussions in the Enforcement and Permanent Technical Committees.

Ensuring effective Customs controls in Free Zones contributes to improving the business environment at the national and international level.  There can be a significant negative impact on the competitiveness of Free Zones if they are poorly implemented.  Lack of oversight over Free Zones impacts not only the country where the Free Zone is located, but also that country’s trading partners.  Customs monitoring and control of the goods stored in Free Zones via periodic onsite checks and inventory management, among others, could also assist the proper management of dangerous goods stored in Free Zones.