Free Trade Zones and Trans-shipment Types of Free Trade Zones Free Trade Zone • Fenced-in duty free areas offering warehousing, storage and distribution for trade, trans-shipment and re-export of products (most ports) Freeport • Accommodates all types of activity to promote overall economic growth through relaxed customs duties and or controls over trans- shipments Traditional Export Processing Zones • Industrial areas focused on assembly and manufacturing aimed primarily at foreign markets Hybrid Export Processing Zones • Combine traditional EPZ with non-export activities Emphasis on Trade Facilitation Trans-shipment and FTZs • Trans-shipment occurring with licensing and the option of Customs inspections • Trans-shipment occurring with licensing and Customs exemptions • Trans-shipment without licensing and the option of Customs inspections • Trans-shipment without licensing and with Customs exemptions Export and Free Trade Processing Zones in Asia Taiwan: Kaohsiung EPZ , Taichung EPZ, Chungkang EPZ, Pingtung EPZ Vietnam: Hai Phong 96 EPZ, Da Nang EPZ, Tan Thuan EPZ, Linh Trung I EPZ, Linh Trung II EPZ, Linh Trung III EPZ Malaysia: Ulu Kelang FTZ, Bayan Lepas FTZ, Port of Tanjung Pelepas EPZ/FTZ, Port Klang FTZ/EPZ, Pasir Gudang Industrial Estate/Johor Port EPZ/FTZ Indonesia: Batam FTZ, Bintan FTZ, Karimun FTZ China: Hong Kong, Macau, Shanghai Pilot Free Trade Zone Thailand: Bangkok FTZ, Laem Chabang FTZ, Chieng Saen FTZ, Chiang Kong FTZ, Ranong South Korea: Incheon, Busan-Jinhae, Gwangyang bay area, Yellow Sea, Daegu- Gyeongbuk, Saemangeun-Gunsan, East Coast, Chungbuk Japan: Naha FTZ, Nakagusuku Bay District FTZ Philippines Export Processing Zones (66) Singapore Freeport Trans-shipment Procedures for Singapore Trans-shipment of controlled items within the same FTZ: • Obtain a Transhipment Permit through TradeNet® if goods were brought into the FTZ from overseas for temporary storage, pending transhipment via same FTZ. • For transhipment of goods from one FTZ to another: • Obtain a Transhipment Permit through TradeNet® if goods were brought into the FTZ from overseas and subsequently transhipped via the second FTZ. Singapore (conventional cargoes) • No Customs Transhipment/Removal permit is required for the transhipment of non- dutiable and non-controlled cargo within the same FTZ. • For goods under through bills of lading/airway bills, Transhipment/Removal permits are required for transhipment of dutiable goods except: • if the goods are imported by air and to be re-exported by air within Changi FTZ; and • if the goods are imported by sea in a container and are to be re-exported in the same container (without undergoing unstuffing and re-stuffing operation) by internal delivery. Risk Associated with FTZs/EPZs • Inconsistencies between countries • Limited Customs controls for transit goods • Equating trade facilitation with lack of oversight in EPZs • Reliance on licensing in country of origin for trans- shipped goods • Emphasis on volume and speed • Lack of emphasis on end-user (catch-all) Recommendations • Include specific guidelines for brokering and trans-shipment facilities in strategic trade management regulations • WCO Cargo Targeting System for risk assessment • Register of compliant brokers and trans-shippers .