– Press release

The Trinidad and Tobago Manufacturers Association (TTMA) Illicit Trade Desk views this country’s Free Trade Zones as a double-edged sword acknowledging that while it supports a myriad of trade activities, it can have devastating effects when these zones are used for criminal purposes.

The World Bank defines free trade zones (FTZ) as enclosed duty-free areas for the purpose of providing warehousing and distribution facilities supporting trade, particularly re-exports. They are found near a point of entry, such as a port, an airport, or a land border, and the focus is on commerce, such a finished and semi-finished goods.

Increasingly, governments around the world have turned to free trade zones to help stimulate their economy and promote growth and production. Examples include Hong Kong, Singapore, Colón (Panama), Copenhagen, Stockholm, Gdańsk (Poland), Los Angeles, and New York City. Trinidad and Tobago is no exception.

According to our local ttconnect website, our Free Trade Zones Programme is designed to encourage local and foreign investment in export-driven projects that create jobs, develop skills, and create external markets for products, and is administered by the Trinidad and Tobago Free Zones Company Ltd. (TTFZ) under the Free Zones Act (1988).

In the Free Zones Act, it states  activities which may be carried out in a free zone include warehousing and storing, manufacturing operations, transshipment operations, loading and unloading operations, exports, imports, service operations including banking, insurance and professional services, packaging and shipping, assembling, processing, merchandising, constructing, sale, lease rental or management of free zone land and shared support services (processing of payments through wire transfers, loan adjudication etc.).

The World Bank states that FTZs are used as “experimental laboratories” to test out new policies without national consequences, even though it can help attract foreign direct investment (FDI’s) to facilitate greater labour mobility and education, infrastructure improvements and enhanced competition.

Exemptions in FTZs can include import duties and taxes (often meaning no declaration is required or verified), direct taxes, sales taxes and VAT, national incorporation laws and regulations, certain labour laws and financial reporting.

According to a report dated July 2019 by the Ministry of Trade and Industry, the current Free Zone regime was “modernized” allowing for the introduction of an Special Economic Zone framework which allows for the increase of economic and social impact of economic zones in Trinidad and Tobago; enhancement of the international appeal of Trinidad and Tobago’s economic zone regime, and  improvement of existing and advance new mechanisms and procedures to effectively develop and manage economic zones. The report however does not mention the possibility of illicit trade occurring under these zones.

However, the TTMA’s Illicit Trade Desk states FTZs are like havens for illicit trade, and wonders whether Customs has sufficient oversight, whether goods are ever inspected, and whether companies operating in these zones are subject to rigorous disclosure and transparency requirements. It says there is an immediate and pressing need to revisit or to address the risks, especially as it pertains to alcohol, pharmaceutical and tobacco smuggling, illegal wildlife trade, arms trafficking, illegal gambling, and numerous other forms of criminal activities. Finally, while there is no opposition to the implementation of the SEZ policy, there must be measures geared towards addressing illicit trade.