At the OECD Headquarters in Paris on March 15, 2018 the Transnational Alliance to Combat Illicit Trade (TRACIT) presented its latest report, “Trade in Counterfeit Goods and Free Trade Zones: Evidence from recent trends”, to the 6th annual meeting of the OECD Task Force on Countering Illicit Trade.
The report sheds new light on the abuse of free trade zones (FTZs) to facilitate a wide range of illicit activities, ranging from illegal wildlife trade, tobacco smuggling, and counterfeiting and piracy of products.
According to the report, the effects of criminal activities in FTZs highlights a pressing need for governments to improve coordination and address the lack of law enforcement in the zones.
The study identifies data trends that show a tendency towards increased illicit trade, such as an additional FTZ being associated with a 5.9% increase in the average value of exported counterfeited and pirated goods.
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TRACIT Director-General Jeffrey Hardy commented: “The report highlights what business has long experienced – that FTZs are routinely exploited to facilitate trade in counterfeit and pirated products, as well as smuggling and money laundering.
We encourage the OECD to continue taking a leadership role in addressing transparency in FTZs, strengthening cooperation with stakeholders and encouraging the development of good practices to reduce zone vulnerabilities to illicit trade.”
The OECD also presented a draft Guide on Enhancing Transparency in Free Trade Zones during the meeting that is set to be finalized through a process driven by member countries and private consultants.
The guidance includes measures for governments to take to reduce abuse of FTZs as conduits for illicit trade.
