From 28 to 30 January 2019, the WCO, with the financial support of the Japan Customs Cooperation Fund (CCF Japan) and in cooperation with Morocco Customs, held a WCO Regional Workshop on Free Zones/Special Customs Zones (SCZs). The Workshop took place in Tangiers, Morocco, and was attended by more than 15 participants from WCO Members of the Middle East and North Africa (MENA) region, as well as representatives from both the private and public sectors and the Organization for Economic Co‑operation and Development (OECD).

The Workshop provided an excellent opportunity for participants to present their national administrations’ experiences of SCZs and to discuss the current situation regarding the economic benefits of SCZs and Customs procedures/control within the SCZ regime, good practices and the challenges that they are facing.

On the first day of the Workshop, the opening remarks were followed by a presentation given by the representative of the Moroccan Ministry of Industry on the economic benefits of the Free Zones, their contribution to the development of the national economy and the various incentives offered to companies established in the SCZs. Such economic benefits and incentives include exemption from a number of taxes (corporate tax, income tax, import-related tax and other taxes), use of foreign currency within the SCZs and provision of a strategic location for suppliers based in Europe.

The representative of the OECD, who had been asked to talk about the challenges Free Zones are facing, began by identifying the various macroeconomic benefits generated by SCZs and went on to present the research work conducted by the OECD on SCZs. Advocating the need for greater transparency in SCZs, he highlighted a number of challenges such as unfair competition, low labour standards and illegal trade, especially in counterfeit and pirated goods.

Representatives of private companies operating in the SCZs outlined the benefits and advantages of the SCZs and raised a number of issues with regard to the management of SCZs, including the need for more flexible Customs working hours and the need for additional measures to make their import and export activities more efficient.

Participants from the Customs Administrations of Algeria, Egypt, Jordan, Libya, Morocco, Palestine, Sudan, Tunisia and the UAE gave presentations of their Customs procedures/control in SCZs and the challenges they are currently facing, as summarized below:

• Despite maintaining adequate control and procedures in their own SCZs, many are encountering a constant influx of illegal activity originating from other SCZs located in neighbouring countries;
• An accurate Certificate of Origin (CO)is essential for preferential tariff treatment under applicable FTAs, as inaccurate COs, especially for goods originating from SCZs, are frequently being used for tax evasion purposes;
• In view of the difficulty in meeting private-sector needs in SCZs, more flexible working hours are needed to bring them into line with the operating hours of companies established in SCZs.

The final day of the workshop was dedicated to a field trip to the Tangiers Free Zone which allowed participants to observe implementation of the various types of Customs control/procedures and to visit a number of facilities in this SCZ. More than 500 companies with a total of 55,000 employees operate in the Tangier Free Zone. A Single Window has been implemented to provide companies with access to all Customs and related governmental procedures necessary for them to operate in the Zone.

This Regional Workshop on SCZs was the second in a series of such workshops on the topic of SCZs and formed part of the WCO’s research work on the difficulties and challenges facing SCZs. The WCO intends to conduct workshops and field studies that will cover all six WCO regions, and these will provide a basis for the discussion of potential WCO instruments and tools to address this SCZs issue and the possibility of reviewing Chapter 2 of Specific Annex D (Free Zones) to the Revised Kyoto Convention.