Risk governance

OECD Recommendation on Countering Illicit Trade: Enhancing Transparency in Free Trade Zones


21 October 2019



Free Trade Zones (FTZs) can offer important economic benefits for host countries and hosted companies, alike, but they can also contribute to trade in fake goods and other illicit activities.

There are more than 3,500 free trade zones, often located at key ports, in 130 countries or economies in North and South America, the Asia-Pacific region, Europe and Africa, up from just 79 spread across 25 countries or economies in 1975. The special zones facilitate trade by offering businesses advantageous tariffs and lighter regulation on financing, ownership, labour and immigration, and taxes. They have helped emerging economies to attract foreign investment and generate jobs and growth.

However, the gains from reduced customs presence in FTZs can offer opportunities for illicit trade. There is a risk that, without additional transparency and oversight, the economic benefits from FTZs could be jeopardised.  To address this issue, the "OECD Recommendation of the Council on Countering Illicit Trade: Enhancing Transparency in Free Trade Zones", is designed to ensure transparency in FTZs and is framed as part of the broader effort to counter illicit trade.


Read the Recommendation