Free Trade Zones and Potential Trade Of Counterfeit Goods

Last updated on June 23rd, 2022 at 04:30 am

Classified as Special Economic Zones, Free Trade Zones (FTZ) are a geographical area where different goods and products are manufactured, stored, landed, or handled or re-exported after reconfiguration under certain regulations and guidelines.

FTZs are not generally subjected to customs duties. They are generally located near major seaports, international airports, or National Frontiers that are advantageous for trade and commuting of goods across nations.

As defined by the World Bank, a Free Trade Zone is “duty-free areas, offering warehousing, storage, and distribution facilities for trade, transshipment, and re-export operations.”

Features of Free Trade Zones

Benefits to Local Business

Free Trade Zones offer benefit to the local businesses that are located within the geographical range of the Free Trade Zones. These secured Areas may reduce custom duties and regulatory requirements for setting up a business. They also offer indefinite storage systems, security, and insurance.

Special Laws and Regulation

The basic laws and regulations of the country apply to the FTZs in which they operate. Nevertheless, they have some special rules and regulations subject to them. They are located in a separate area based on customs, and they are free from the policies and custom duties that are usually applied to imported goods.

Easier Regulation and subsidies

FTZs also make trade easier. Through its lighter regulations on environment and labor and a subsidies infrastructure for manufacturing businesses as per the review of USTR, 2018. They make import and export effortless. Building a supply chain and delivery of products can be beneficial for companies through their FTZ.

Counterfeit Goods in the FTZs

While the Free Trade Zones are a good business and economic setup, it also attracts different illegal activities that also include the manufacturing and trafficking of fake products.

It can be due to various reasons, like an oversight by the management, or lighter regulations. Lack of proper product oversight or customs can open the way for the conduct of illegal activities and improper businesses.

While the duty-free status of the FTZ makes it easier for other businesses, it also makes way for the illegitimate manufacturers to easily divide the bulk shipments to several small ones and repackage the goods to mislead identification.

Goods can be transported through a complex route of shipment, which helps remove the trace of goods and brands and forge the documents.

Online Brand Protection Services

One of the ways to counter this problem of fake product processing and manufacturing in the FTZs is through Brand Protection. There are Online Brand Protection Services Available that help in protecting and prevent grey market selling.

Wisermarket, an IP protection agency, is one of the solutions that offer brand protection online all over the world. This anti-counterfeit service protects the trademark, domain name, grey market selling, and infringements of brands.

Moreover, there are other threats too related to the FTZs such as theft of intellectual property, in which Wisermarket is adapted with combating the revenues, brand, reputation, and other online risks that can cause trouble for a brand’s trust.