A UNITED STATES DEPARTMENT OF COMMERCE PUBLICATION **n, o» " Free Trade Zones and Related Facilities Abroad U.S. DEPARTMENT OF COMMERCE Bureau of International Commerce Free Trade Zones and Related Facilities Abroad *<°'j o \ U.S. DEPARTMENT OF COMMERCE Maurice H. Stans, Secretary Rocco C. Siciliano, Under Secretary BUREAU OF INTERNATIONAL COMMERCE Harold B. Scott, Director a. o u o a « a July 1970 ^ For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 - Price $1.25 S3 FOREWORD It is the policy of the U.S. Government to assist U.S. businessmen in expanding their exports in the market places of the world. The Department of Commerce, which plays a major role in this endeavor, has prepared this booklet to acquaint exporters and potential exporters with customs- privileged facilities such as free trade zones located in or near their over- seas markets. Such facilities may be of use in expanding their foreign business. While the United States is the world's leading foreign trader, its exports account for a smaller percentage of its gross national product than is the case for many other countries. This export figure can and must be increased. In virtually every market abroad there is a demand for U.S. products. But, in order to compete with suppliers from third countries, it is often essential for U.S. exporters to have their goods readily available to be in a position to process, sell, distribute, service, and supply spare parts from a base at the doorstep of their foreign customers. Customs-privileged areas such as free trade zones often can serve this need. They are not a new device. However, as international trading opera- tions have grown in volume and complexity and the pressures of competition have intensified, governments and traders alike have become increasingly interested in the potentialities of developing and using customs-privileged areas to facilitate the handling of import and export shipments. We hope, therefore, that you will find this comprehensive booklet useful and informative. M^7>^> HAROLD B. SCOTT Director Bureau of International Commerce July 1970 n CONTENTS Page Introduction iv Part One Development and Use of Free Trade Zones and Related Facilities v Chapters 1 Development of Customs-Privileged Facilities 1 2 Types of Customs-Privileged Facilities in Use Abroad 4 3 Advantages of Using Customs-Privileged Facilities 9 4 When to Consider Using a Free Trade Zone 13 5 What to Look For in a Free Trade Zone 14 6 Where to Obtain Background Information 15 7 Factors Affecting the Establishment of Free Trade Zones ; Some Recent Trends 16 Part Two Free Trade Zones and Related Facilities Operating Abroad 19 Chapters 8 Free Trade Zones and Related Facilities in Europe 22 9 Free Trade Zones and Related Facilities in Latin America, the Caribbean and Bermuda 72 10 Free Trade Zones and Related Facilities in Asia 96 11 Free Trade Zones and Related Facilities in Africa 118 in Introduction This booklet presents the "what, why, how and where" of free trade zones and related facil- ities abroad. Part One gives a general view. It describes the several major types of customs- privileged facilities to be found abroad and dis- cusses the basic economic factors involved in using them. The second part contains brief sum- maries, grouped by geographic region, of those facilities presently in operation. Each summary contains sections which de- scribe the location of the facility and its prox- imity to markets and onward transportation, the types of operations authorized, the restric- tions and controls employed, the internal facili- ties available to users, the name of the admin- istering authority, and the mailing address of at least one source of further information. It is strongly recommended that any serious pro- spective user of a facility described in this book- let communicate directly with the administer- ing authority or other competent source listed for assurance the information given is still cur- rent and for further essential details, particu- larly those relative to storage charges and fees, prior to attempting to establish an operation. Where the address is given in a foreign lan- guage, it is usually advisable to write to the addressee in that language. Part Two describes primarily those customs- privileged areas which seem likely to offer prac- tical opportunities to U.S. exporters. Minor cus- toms-privileged areas lacking convenient access to markets and those in which internal facilities for handling or storing shipments have not been developed have been omitted, as have new facil- ities which have not yet become operational. Additionally, a few free trade zones have been omitted because it has not been possible to verify their operational status. The material contained in this booklet has been assembled over a considerable period of time. Although every effort has been made to obtain and pre- sent information on facilities pertinent to our export trade and to verify the accuracy of the data provided, the Department of Commerce cannot assume responsibility for errors or omis- sions. Material on the foreign-trade zones of the United States has not been included. The For- eign-Trade Zones Board publishes an Annual Report to the Congress of the United States in which the individual facilities are described and the names and addresses of their administering authorities are listed. Copies are available from the Superintendent of Documents, U.S. Govern- ment Printing Office, Washington, D. C. 20402 at a cost of 35 cents apiece. Further information may be obtained from the Foreign-Trade Zones Board, Bureau of International Commerce, U.S. Department of Commerce, Washington, D.C. 20230. Recent general published materials on free trade zones are not extensive. However, for ad- ditional information on the subject it may be useful to consult Free Ports and Free Trade Zones, by Richard S. Thoman, Cornell Mari- time Press, Cambridge, Maryland 21613; and Foreign-Trade Zones and International Busi- ness, by William A. Dymsza, Department of Conservation and Economic Development, State of New Jersey, Box 1889, Trenton, New Jersey 08625. This booklet has been prepared as a business information service by the Transportation and Insurance Division of the Bureau of Interna- tional Commerce. It was written by Helen D. Grayson, Free Trade Zones Specialist, under the direction of Jerome Sachs, Director, Trans- portation and Insurance Division. The sum- maries of the individual free trade zones and related facilities presented in Part Two are based largely on reports submitted by U.S. embassies and consulates abroad. IV Part One DEVELOPMENT AND USE OF FREE TRADE ZONES AND RELATED FACILITIES Digitized by the Internet Archive in 2012 with funding from LYRASIS Members and Sloan Foundation http://archive.org/details/freetradezonesreOOunit Chapter 1 Development of Customs-Privileged Facilities Most countries presently maintain tariff sys- tems and tax most categories of imported goods intended for consumption or use within their boundaries at the time of entry according to rates specified in a customs tariff. Such cus- toms tariffs are instruments of national eco- nomic policy. Their more common objectives are the protection of domestic industry and the production of national revenue. When import limitation is an important policy aim, so-called "non-tariff barriers" such as supplementary import taxes, quota systems, import licensing requirements and foreign exchange controls are frequently employed in combination with tariffs. Conversely, most tariff-enclosed nations cur- rently do not impose customs duties or other import regulations on shipments of foreign goods clearly documented for onward transpor- tation to a third country. Such "transit" ship- ments are usually subject only to the minimal controls necessary to ensure that the goods act- ually leave the territory of the country they are transiting. Depending on transportation patterns and other factors a variety of means of handling transit shipments are employed. "Transit sheds" on or near wharves are fre- quently provided for the temporary storage of shipments awaiting water transportation, and movement under bond or customs seal is usually possible for overland shipments. There is, however, a third category of import shipments, in which the ultimate destination is undetermined at the time of landing or for which immediate onward shipment would not be Practical. Since the handling and storage of such shipments generally result in economic benefit, most countries have found it desirable to grant some form of relief from customs duties. This publication deals with this category of shipments and the customs-privileged facil- ities that some countries have established to accommodate them. Special Customs Treatment Special customs treatment is the central fea- ture and the essential benefit of the free trade zones and other facilities described in this book- let. Their purpose is the stimulation and facili- tation of international trade, or at minimum, the attraction of a measure of economic activity which might otherwise go elsewhere. The means employed is the extension of customs privileges based on exemption from customs duties under a system of specified controls. Variations are wide in other respects, but all facilities permit entry of raw materials, com- ponents and finished goods of foreign origin and later reexportation without payment of cus- toms duties. They afford international traders the opportunity to store and often to process imported goods free of customs duties and with- out the application of most other import control requirements while awaiting sale or onward shipment to another market for consumption or use. Typically, customs duties become payable and other import controls become operative only if and when foreign goods are removed from a free trade zone or similar facility for use or consumption in the country in which it is located. Consequently, the possibilities for the utilization of any such facility tend to be af- fected by the customs tariff levels of the host country and of nearby countries which might easily be supplied from the facility. Customs-privileged areas have been in use for a long time; but their growth has not been steady, their institutional form has been subject to change and many countries have not seen a need to establish them. Rather, they have varied with the flow and direction of interna- tional trade and with the presence or absence of customs tariffs or similar barriers to trade. They have tended to appear along international trade routes, primarily at those places with a substantial volume of transshipment or reex- port trade that would have been impeded or would have transferred to a more hospitable location if local customs duties were imposed. They have been employed frequently as a com- petitive device to attract trade and shipping activity from more restrictive nearby trade centers or other previously established cus- toms-privileged areas. Origin of Facilities Customs-privileged facilities are believed to have had their origin in the ancient Mediter- ranean area. They are known to have been oper- ative during the Middle Ages in the form of "free cities" which permitted the free transit of goods to and from market fairs. The Hanseatic League which contributed substantially to the stimulation of trade and economic development in Germany was originally a confederation of trading towns whose purpose was the reduction of obstacles to trade. Some modern free trade zones, that at Hamburg for example, trace their origin to these medieval towns. As European trade with the Middle and Far East developed after the fifteenth century, a number of port cities in the Mediterranean area extended customs privileges to traders. More facilities were developed in the eighteenth and nineteenth centuries when the European colo- nial powers frequently established free ports in their overseas possessions, and non-colonial states created customs-privileged enclaves in their home ports to attract trade from their more prosperous neighbors. Both Great Britain and the Netherlands employed the free port device in the Caribbean during this period, and Great Britain extended it to transshipment and ship outfitting ports in other areas such as Aden and Hong Kong. In Europe a substantial wave of activity took place after the unification of Germany. During this period central governments generally tend- ed to increase in strength and extend their control over subordinate local govern- mental bodies, and industrialized countries gen- erally tended to adopt protectionist customs tariffs. Additionally, the opening of the Kiel Canal and the later defeat of Germany in World War I presented new possibilities for the han- dling of transshipment cargoes in the Baltic and Scandinavian areas. These developments had two effects on free port activity. On the one hand, the device took its modern form, that of the "free trade zone" in which freedom from customs duties and sim- ilar controls is restricted to a delimited area. Although there had been earlier instances of its use, the free trade zone became the prevalent form of customs-privileged place in Europe when the formerly independent free cities of Germany were brought into the German Cus- toms Union and lost their tariff-free status except for the actual port areas and their imme- diate environs. On the other hand, a number of new customs-privileged facilities were estab- lished in Germany and in the Scandinavian countries with the result that the use of the device reached its high point in Europe during this period. The new facilities were usually called "free ports," although they were all es- tablished as free trade zones of limited area. The national attitudes of the major trading and industrial powers of Europe toward the employment of the free trade zone device also apparently crystallized during this period. With few exceptions, those developed countries which had not established customs-privileged zones by 1935 have not since done so. The United King- dom, France, and the Benelux countries are in this category. Conversely, those countries in which the device was employed during this pe- riod have generally retained it. Recent Developments In recent years, the free trade zone move- ment has achieved new momentum. Since the end of World War II, many new facilities have been created, their geographic distribution has become more widespread, and their institution- al forms have become more varied to meet di- verse local conditions. Most of the new activity has taken place in developing countries. Many countries in Latin America, the Middle and Far East, and Africa have sought to employ the de- vice as a tool of national economic development. Frequently facilities in these areas take the form of combination free trade and free indus- trial zones; they are intended not only to im- prove the possibilities for the use of national ports but also to facilitate the development of national export industries utilizing foreign materials. The widespread distribution of the free trade zone device attests to its usefulness in accord- ing relief from customs duties to shipments other than those intended for immediate use or consumption in national territory. However, it is only one of a number of alternative means. Many major trading countries which do not em- ploy free trade zones have developed other sat- isfactory systems for the purpose. These in- clude special temporary entry provisions, bonded warehousing facilities and customs drawbacks (duty refunds on reexports). De- pending upon the liberality of the legal frame- work, the flexibility of the institutions and the efficiency with which they are administered, alternative systems can offer advantages com- parable to those of a free trade zone. In fact, a major seaport where such a system is employed advertises itself as "freer than a free port." Chapter 2 Types of Customs-Privileged Facilities in Use Abroad The fundamental purpose of the customs- privileged facilities described in this publica- tion is to facilitate the exchange, transfer, movement or industrial use of goods among na- tions having different international trade re- strictions. They tend to be situated therefore in or near important commercial centers on world trade routes where goods can be easily received, dispatched and distributed interna- tionally. The greater number are located in sea- ports, but some can be found at airports, rail- road stations and border towns. In general, their regulations are such that both foreign ex- porters and local importers may use their in- ternal physical facilities and customs privileges. Five Basic Categories These customs-privileged facilities vary greatly in detail as the result of differing his- torical backgrounds and particular economic conditions. They can be divided, however, into five basic categories: free trade zones, free ports, transit zones, free perimeters and special customs-privileged facilities. The first four are specific, limited areas, usu- ally within a tariff-enclosed territory or coun- try, which are legally permitted to receive imported goods without levying customs duties. There are more than 100 of these so-called "free areas" now in operation throughout the world. The last category is a more general classifica- tion, encompassing countries where liberal and flexible customs procedures have been so sys- tematized that they offer privileges comparable to the specific customs-exempt areas of the first four categories. Aside from the extension of duty-free treatment, there are no fixed concepts or criteria applicable to all the facilities now in operation. Even the terms commonly used by the host governments to describe the facilities, such as "free trade zone" or "free port," will frequently differ in local interpretation. The classifications used in this publication follow the generalized definitions given below which enjoy wide usage. Each individual facili- ty described in Part Two has been placed in the category which it most nearly approximates in accordance with these definitions. In some cases, the classification will differ from that of the host government where the latter's termi- nology is at variance with such usage. Free Trade Zone The free trade zone is the most important of the customs-privileged facilities of limited area now in operation abroad. It has the widest geo- graphic distribution and is the form most com- monly employed by tariff-enclosed industrial- ized nations. A free trade zone is an enclosed, policed area in a seaport or at an airport or other inland point treated for customs purposes as lying out- side the customs territory of the country. Goods of foreign origin may be brought in pending eventual transshipment, reexportation, and in some cases, importation into the local market, without payment of customs duties. Domestic goods intended for export or for admixture with foreign goods may also be brought into the free trade zone. At minimum, free trade zones allow interna- tional traders to store such goods within their confines and to undertake such operations as may be necessary to preserve them; more fre- quently, processing and commercial activities such as exhibiting, sampling, blending, mixing, sorting and packing, which would facilitate the sale, distribution, or onward shipment of the goods without changing the customs tariff clas- sification are also permitted. Industrial activi- ties such as assembling or manufacturing which would tend to change the customs tariff classi- fication of the goods to a category different from that applicable at the time of entry are permitted in some zones, usually in those es- tablished more recently, but not in others. In some countries, terms such as "free zone," "free port," or "free airport" are used to describe a facility which is actually a free trade zone as that term is defined above. In the United States, the term "foreign-trade zone" is used to designate the free trade zone facili- ties operating in this country. The laws and regulations applicable to free trade zones throughout the world tend to have certain similar features that can be considered as characteristic of this type of customs- privileged facility. Although not all are present in every case, they produce in sum a convenient model with which individual facilities subse- quently described in this booklet can be com- pared. For the most part, these characteristics are not repeated in the descriptions of particu- lar facilities; unless otherwise stated, it can generally be assumed that they are applicable. In all instances where departures from the norms are known to exist, the specific facts are given. These characteristics are substantially as follows: Free Trade Zone Characteristics • A free trade zone is "free" only with re- spect to customs duties, import taxes, and possi- bly other import controls normally imposed by customs laws and regulations. All other penal and civil laws applicable elsewhere in the coun- try, for example, those concerning public safe- ty, health, sanitation, labor, business organiza- tion, business and personal taxes, etc., are usually applicable within a free trade zone. • Goods brought into a free trade zone from abroad are not "declared" as customs entries into the host country. Customs examination generally occurs at the surrounding fence and not at shipside or in warehouses or other struc- tures within a zone. Although goods brought into a zone are frequently subject to inspection or documentary controls, these formalities are usually held to the minimum necessary to pre- vent smuggling or other illegal activities. • Bond or other security is not normally re- quired. • There are few restrictions as to the types of goods which may be brought into a free trade zone. In general, any goods from any country with which the host country has normal trade relations can be accepted. However, goods which are prohibited entry or free circulation within other areas of the host country such as narcotic drugs, firearms, ammunition, objectionable printed matter, etc., are usually denied entry into its free trade zones. In addition, certain goods that present possible hazards to other goods, such as highly inflammable substances, or that can be easily smuggled, such as high- value jewelry, may either be denied entry or subjected to special handling and storage re- strictions. • Domestic goods and duty-paid foreign goods brought into a free trade zone are usually con- sidered exports from the customs territory of the host country unless special steps are taken to retain their nationality. Upon introduction into a free trade zone such goods can become eligible for any applicable export incentive, tax refund or drawback payment. • Foreign goods brought into free trade zones for use or consumption within their confines are generally regarded as imports and subject to the payment of customs duties and import taxes in full. The customs treatment of capital goods and office supplies intended for operations within a free trade zone, however, can vary widely. The free trade zones of developing coun- tries frequently accord them duty-free entry, but those of industrialized nations usually re- quire payment of duty. • Goods removed from a free trade zone for use or consumption in the host country are at the time of their removal subject to the pay- ment of customs duties and taxes at the full rates applicable to like goods imported directly from abroad. Compliance with any other im- port control requirements must usually be made before the removal can be completed. The chief exception to this rule is that goods manufac- tured in free trade zones are sometimes accord- ed duty-free or reduced duty entry into local markets. • There is generally no limit on the length of time during which goods can be held in a free trade zone, provided storage charges and other fees are paid. • Goods held in a free trade zone can usually be sold at the wholesale level through auction or other means. Title to such goods can be transferred; also, such goods can be used as collateral for loans. • With few exceptions retail trade in goods held in free trade zones is prohibited, or, if permitted, is subject to strict control. The most common exception to this rule is ship chandler- ing, that is, the sale of supplies to outbound ships or aircraft. Another sometimes found is the sale of goods to departing passengers. Any retail trade in goods of national origin or im- ports on which duty has been paid is generally confined to snack bars and catering services for the convenience of persons employed within a zone. • A free trade zone will usually have general or public warehousing facilities for short-term or occasional use on a storage charge basis. For long-term storage or for processing operations, space can frequently be rented under contract. Where rentable space does not exist there often are favorable provisions for its construction on land leased by zone users. • Arrangements can usually be made to use a free trade zone for freight forwarding pur- poses. These services may be provided either by the administering authority of such a zone or by local firms operating within it. In some cases, local firms offer agency-type arrange- ments under which they will act in behalf of a foreign company to undertake any authorized operation. • Residence within a free trade zone is gen- erally prohibited, and access to its premises confined to persons having business there. The Free Port A free port is an area, generally encompass- ing an entire port and its surrounding locality, into which goods of foreign origin may be brought without the imposition of customs du- ties or subject only to a minimal revenue tariff, whether such goods are intended for reexport or for local consumption. In some cases, selected goods, for example, alcoholic beverages and to- bacco, may be subject to relatively high rates of duty. Free port customs treatment may either ex- tend throughout an entire territory as in Hong Kong, or be confined to a limited, but usually substantial, portion of a country as in the Bra- zilian free port of Manaus. Where the free port is a portion of the national territory, customs duties are levied on foreign goods which pass from the free port into other areas of the coun- try. In such instances, the free port is a con- trolled facility. The free port type of customs-privileged area, as defined above, is relatively rare today. The greater number of such facilities are co- lonial or former colonial territories such as Aden, Gibraltar, Hong Kong and Singapore, which had not been tariff-enclosed. Although these areas generally attempt to retain the tra- ditional free port status that made possible their development as international transship- ment, processing and commercial centers and still facilitate such operations, changing cir- cumstances have forced some adjustments. Many have imposed customs duties or other taxes on an increased number of imports in- tended for local consumption and raised the level of duty on previously dutiable items in re- sponse to pressures for increased revenue and protection of local industry. Care is usually taken, however, to insure that such measures do not affect goods intended for transshipment or reexport. As a consequence some of these facilities now function as part free port and part free trade zone. A few other free ports have in recent years been established in tariff-enclosed countries. Generally, the areas selected to be free ports have been less well developed than other parts of the host countries and remote from the main- stream of their commerce. In such cases, the free port device has been adopted to stimulate local development through international eco- nomic activity. Typically, the host country de- liberately chooses to do without potential cus- toms revenues for possible long-term gains in 6 the form of increased employment, a broadened tax base, and new sources of foreign exchange earnings. Some of these free ports tend to be multi-purpose facilities in that they seek to ac- commodate local and international commercial activities, industry, particularly export-orient- ed industry, and tourism simultaneously. Ma- naus, Brazil is an example of a free port in a tariff -enclosed area. In terms of legal framework the free port tends to be the freest and most flexible form of customs-privileged territory. In addition to the fact that most categories of goods can be brought in freely and even sold in the local market for consumption there without the im- position of customs duty or subject only to rela- tively low rates of duty, there are usually fewer restrictions or controls governing the entry, handling, processing and reexport of goods than would be applicable in a free trade zone. In general, there is little regulatory distinction be- tween export or reexport-oriented operations and purely local ones. However, with the exception of a few particu- larly well located and active facilities, many free ports are less well equipped than the aver- age free trade zone to serve the needs of inter- national trading and distribution operations. Because these facilities are often situated in economically underdeveloped areas away from major world trade routes, shipping services may be infrequent, the local market may be small and nearby markets few, and internal facilities such as transit sheds, warehouses, and handling equipment limited. The Transit Zone A transit zone is a port of entry in a coastal country established as a storage and distribu- tion center for the convenience of a neighbor- ing country without adequate port facilities or access to the sea. It is so administered that goods in transit to and from the neighboring country are not subject to the customs duties, import controls, or many of the entry and exit formalities of the host country. The terms "en- trepot," "free zone," and "free transit zone" are sometimes used in place of "transit zone" as defined above. A number of transit zones have been estab- lished under bilateral treaties between the gov- ernments of the coastal and neighboring coun- tries; but others have simply been designated by coastal countries for purposes of administra- tive convenience in distinguishing transship- ment cargoes from those intended for local consumption. In either case the transit zone is a more limit- ed facility than either the free trade zone or the free port. In its most extensive form, a transit zone may consist of a segregated portion of a port with its own piers, sheds, and other facilities. In its more restricted form, the facil- ity may consist only of a single warehouse or shed in the general port area. In some transit zones, customs officials or other authorized agents of the neighboring country that it serves may actually function in the facility and ad- minister it. In general, transit zones do not permit pro- cessing operations. Most authorize only storage and such repacking or other steps as may be essential to insure that the goods reach their final destination in good condition. In some cases the duration of storage is also limited. The Free Perimeter A free perimeter is similar to a free port but is generally confined to a remote or underde- veloped region in a country. In contrast to free ports which are usually intended to stimulate or facilitate international trade or at least gener- ate some form of foreign exchange earnings, free perimeters function primarily to serve lo- cal consumption requirements that cannot be supplied conveniently through the usual domes- tic commercial channels. Most free perimeters are not completely "free" from tariff and other import control mechanisms. More generally they offer only a reduction from the level of tariffs in force else- where in the country or permit the importation of a limited number of items on a free or re- duced duty basis or subject to fewer import controls than would be applied elsewhere. Many free perimeters confine their customs-privileges to imports such as foodstuffs and medicines, capital goods, and urgently required consumer items. The laws and regulations governing busi- ness activity in a free perimeter will usually be the same as those applicable elsewhere in the country. Special Customs-Privileged Facilities The term "special customs-privileged facili- ties" has been devised for use in this publica- tion to describe the systems employed by some countries that do not maintain delimited areas to facilitate international trading operations but which offer comparable advantages to trad- ers. The means employed are usually liberal cus- toms procedures for temporary entry and an ex- tensive network of sheds, bonded warehouses and other storage areas. Such systems frequent- ly accord users a high degree of flexibility. In general, these facilities permit the entry and storage and reexportation of imported goods without the payment of customs duties and under minimal customs formalities. Cus- toms duties become payable, however, if the goods are released from storage for use or con- sumption in the local market. Depending on the facility and the type of goods, bond or other se- curity may or may not be required. In some cases, processing, assembly and manufacturing operations may be carried on. Chapter 3 Advantages of Using Customs-Privileged Facilities Well-located, well-equipped, and well-adminis- tered customs-privileged facilities can offer substantial benefits to international traders. They can provide a better means of handling old business and facilitate the establishment of new business. In some cases, they can accommo- date trade activity that might not otherwise be possible, particularly for the transshipment, re- exportation and staging of goods for later ship- ment across national or customs boundaries. As a rule, the more liberal such facilities are, the greater the possible advantages may be. Briefly stated, these advantages take the form of reductions in capital outlay and operat- ing costs, increased convenience and opportuni- ties for innovation and flexibility. They result from a combination of the customs privileges accorded with the freedom of activity and dis- posal permitted. They will be obtainable to a greater or lesser degree in any customs-privi- leged facility, depending upon the laws and reg- ulations that govern its use, the internal facili- ties available and the economic environment surrounding it. Most customs-privileged facilities can be used for two quite different marketing processes. One is the consignment, transshipment and re- exportation of merchandise to market outlets near the host country. The other is the tem- porary storage of dutiable goods for eventual importation into the customs territory of the host country. The advantages to be gained may differ accordingly. Free Trade Zone Advantages Since the free trade zone is the prevalent form of customs-privileged facility of limited area, the specific possible advantages of using customs-privileged facilities are described with- in the free trade zone framework. This type of facility is defined and its general characteristics are outlined in the preceding section. The ad- vantages commonly associated with the use of free trade zones are as follows: Financial Benefits • Funds are not tied up in the payment of cus- toms duties, import taxes or the posting of bond or other security while goods are held within a zone. • Host country duties and taxes do not become payable if goods are subsequently transshipped, reexported or destroyed within a zone. Funds are not tied up pending drawback payments, tax refunds or the discharge of bond. • Host country duties and taxes on foreign goods intended for domestic consumption are levied only at the time of their actual transfer from the zone and on the quantities actually transferred. Funds for customs duty and tax payment need not be disbursed therefore until the goods have been sold or local market condi- tions appear conducive to their sale, and with- drawal or delivery outside of the zone takes place; moreover, since withdrawal and duty as- sessment are not generally confined to full lots 9 or shipments, but can be made for any quantity of goods and in any frequency at the option of their owner, customs duty and tax payments can be adjusted to the market activity of the goods. • The processing of foreign goods in a free trade zone can sometimes result in savings on host country duties and taxes by providing a different basis for duty assessment. Although foreign goods introduced to a country through a free trade zone on its territory are usually as- sessed customs duties and taxes at the same rates applicable to like goods imported directly from abroad, a free trade zone can usually be used for the removal of moisture, dirt, culls, other waste, and substandard or damaged arti- cles prior to actual customs entry. Such process- ing can result in substantial savings, particu- larly where duties are levied according to spe- cific (quantity) rather than ad valorem (value) rates. Similarly the use of a zone for the stor- age of goods subject to loss of weight, shrink- age or evaporation over a period of time (e.g., alcohol) can sometimes result in a lower basis for duty assessment. Occasionally non-industri- al processing operations such as drying, roast- ing, sorting, blending, packaging, etc., under- taken in a free trade zone can result in placement of the goods in a tariff classification or category different and possibly more advan- tageous than that which would have been applicable if the goods had been entered di- rectly. • The products of industrial type operations (assembly, manufacturing, etc.) undertaken in free trade zones frequently enjoy considerable duty and tax advantages over comparable wholly foreign made products when introduced for use or consumption in the customs terri- tory of the host country. Sometimes duties and taxes are calculated by deducting the amount of value added through the use of local labor and components from the duty normally assessed. Sometimes duties and taxes are assessed on only the actual foreign components contained in the final product. In a few cases customs duties may be entirely waived. Where the final pro- duct can be considered as substantially manu- factured within a free trade zone, the host country may be willing to issue a certificate of origin thereby entitling the goods to free cir- culation or preferential entry into third country markets. This advantage can be particularly important in customs unions and common mar- kets. • Host country excise tax refunds, export in- centive provisions and drawback payments us- ually apply as soon as domestic goods and duty- paid foreign goods are brought into a free trade zone pending export. They are considered ex- ports when they enter the zone ; payments need not be delayed until they actually leave the country. • Ocean transportation costs can frequently be lowered by shipping goods in bulk quantities to a free trade zone for repacking there. Unas- sembled furniture, machinery, etc., are also often cheaper to ship than complete items; they can usually be assembled in a zone at or near their market. • Loans to finance local operations are gen- erally obtainable because goods held in a free trade zone can be used as collateral. The ad- ministering authority of a zone will usually issue warehouse receipts or other certification concerning the goods. • The use of local materials in either manu- facturing or processing operations (e.g., for packaging) can sometimes result in cost sav- ings and give the product a price advantage over wholly foreign produced items. Where such goods are intended for sale in the local market the nationality of the local components can us- ually be retained and customs duty payment on them avoided. Increased Convenience • Since there is no limit on the amount of time during which goods may be held in a free trade zone, this type of facility is particularly useful as a storage place in which to hold foreign goods which require aging or which are not affected by lengthy storage or in anticipation of a rise in prices. • A free trade zone may be a better place for the packaging, marking and labeling of goods in accordance with local consumer preferences e.g., size, shape, color, type of lettering, etc., than the factory production line in the country of export. Local marketing consultants can be conveniently employed and marketing adjust- ments easily made. 10 • Goods which do not meet local marking and labeling requirements (e.g., metric measure specifications) may be marked and re-labeled in a free trade zone to meet such requirements. • Similarly, goods which do not meet local sanitary requirements can sometimes be recon- ditioned or upgraded in a free trade zone to the level necessary for entry. • The use of a free trade zone at or near a final market as a distribution and storage point can considerably reduce the time-lag between order and delivery and thereby strengthen a foreign supplier's competitive position in the local mar- ket. New inventory and spare parts can be re- leased from storage in accordance with local market demand. Improved local delivery sched- ules can be met and there are likely to be fewer disruptions arising from delayed ship arrivals, lack of cargo space availability, etc. • A free trade zone permits prospective buyers actually to see and take samples of goods stored there. It permits the seller to display and act- ually to sell his goods rather than merely take orders. • Ship chandlers and other firms doing pri- marily export and reexport business may oper- ate most advantageously from a free trade zone where duties and taxes do not affect their business. • Goods in excess of quota may in some cases be stored in a free trade zone pending the is- suance of additional quota allocations. After is- suance of such quotas the goods may be mar- keted in the host country without delay. Goods intended for reexport to other countries may usually be stored and processed without refer- ence to host country quotas. • In many free trade zones the charges for storage or lease of facilities are published and may be less likely to fluctuate than those in other areas of national territory. • A well-organized free trade zone is likely to have within its confines a variety of services for international traders. They might include international post, telephone and telegraph ser- vices, shipping agents and booking offices for inland transport, banks with foreign exchange and transfer departments, freight forwarding agents, etc. • The owner of the goods or his agent usually has freer access to them in a free trade zone than would be the case in many bonded ware- housing facilities. Neither his time nor his funds are consumed in waiting and paying for the presence of a customs official when he de- sires to see the goods, perform operations on them, or enter or remove them from their storage place. • Facilities usually exist in a free trade zone under which foreign goods may be received or released in accordance with the supplier's in- structions. In some cases various types of pro- cessing will also be carried on in behalf of the supplier. Such services may be performed either by the administering authority or independent warehouse operators and freight forwarders within the zone. Flexibility and Innovation • The choice of destination for foreign goods is less limited in a free trade zone than would be the case in other areas of national territory. Usually they may either be sold into national customs territory or be transshipped to another country. Destination need not be decided until delivery contracts are concluded. When goods cannot be profitably sold into national territory or other nearby markets they may be dis- patched elsewhere. • Goods can be stockpiled in a free trade zone pending an anticipated increase in price level or quota changes and released when advantageous. • Quotations on foreign goods can be calculated more closely from a free trade zone at or near the ultimate market than from the country of supply because exact per unit ocean transporta- tion and insurance costs are known by the time goods arrive in the zone and allowance can be made for damage, breakage or inferior quality. • Merchandise can be released into national ter- ritory or reexported in quantities or lots that are larger or smaller than the original ship- ments. It can be repacked into larger or smaller containers in accordance with market condi- tions. Large lots can be broken down into smal- ler packages and removed from the zone as sales are completed. • Damaged merchandise can be stored in a free trade zone pending decision as to its sale or salvage. Salvage operations may be permitted within the zone. • Domestic materials may be mixed or consol- idated with imported merchandise and subse- 11 quently marketed inland or abroad in any com- components, and semi-processed goods of both bination that will best serve the needs of the foreign and domestic origin can be combined market. Both procurement and distribution can to achieve a marketing advantage over either be better adjusted to supply and demand factors. wholly foreign or wholly domestic produced • For industrial operations, raw materials, goods. 12 Chapter 4 When to Consider Using a Free Trade Zone Generally speaking, the costs of doing busi- ness in a free trade zone will be comparable with those in the surrounding territory. Harbor transportation costs, handling charges and storage fees are not likely to differ from one side of a customs fence to the other. Labor, con- struction and plant costs will also tend to ap- proximate those outside the free trade zone. However, some free trade zones permit the duty-free importation of capital goods intend- ed for use within the zone itself, thereby lower- ing plant costs. Thus, the primary purpose of using a free trade zone is to carry out commercial activities on a free trade basis in an area that is strate- gically located with respect to a foreign customs territory. Such opportunities occur principally, but not exclusively, under the fol- lowing conditions : • When the duration of storage is uncertain or prolonged. • When the ultimate destination of export goods is uncertain. • When large export shipments are to be re- packed and entered in smaller lots. • When the processing of merchandise can re- sult in a savings in duties or transportation on- ward (e.g., through weight reduction). • When merchandise for importation is sub- ject to high rates of duty relative to sales. • When merchandise is subject to quota. • When merchandise must be marked, relab- eled or upgraded to meet local entry require- ments. • When foreign merchandise eligible for drawback is destined for reexport. • When manufacturing based on the use of wholly or partly foreign materials is under- taken for sale in export markets or in both lo- cal and reexport markets. 13 Chapter 5 What to Look for In a Free Trade Zone To be of substantial use to an international trader, a free trade zone should meet three basic qualifications. It should be well-located, well-equipped, and well-administered. The location of the facility must be such that it can easily serve one or more markets of suf- ficient size to support a zone-based operation. The international and local transportation ser- vices which link the zone with both suppliers and markets are an important aspect of loca- tion. As a rule, the more frequent and varied such services are, the more flexible any zone- based operation can be and the greater the num- ber of markets it can serve. The facilities inside a free trade zone should be adequate for the needs of zone users and com- parable with similar facilities outside the cus- toms fence. Buildings, open and covered storage areas, utilities, and cargo-handling equipment should be available at reasonable rates and be in good repair. Similarly, the services offered within the zone (e.g., public warehousing and freight forwarding) should be comparable in quality and cost to those operating outside the zone. The free trade zone should be administered efficiently. From the point of view of the zone user, this means that administrative restric- tions and controls should be kept to a minimum, that expeditious procedures for the processing of documents and the entry, dispatch and cus- toms clearance of goods should be employed, that shipments should be adequately protected from damage or theft while in the zone, and that charges should be comparable with those of competing facilities outside the zone. 14 Chapter 6 Where to Obtain Background Information The same types of economic information that would be useful in considering the feasibility of doing business in a foreign country without reference to using a free trade zone will be re- quired. Basing operations in a zone or related facility may be of considerable aid in surmount- ing trade restrictions, cutting costs, distribut- ing products locally, etc., but essentially the same economic and marketing characteristics will affect such operations as those carried out on the other side of a customs fence. Fac- tors to be considered in this regard include the labor, tax and business laws and economic cli- mate of the host country and nearby countries, the size, wealth, and preferences of the market, the activities of competitors, etc. The Department of Commerce publishes a number of reports on the economies of individu- al countries, their marketing characteristics and some specific product studies. They are list- ed by title and subject and their prices given in a semi-annual Checklist of International Busi- ness Publications, available without charge from the U.S. Department of Commerce, Sales and Distribution Branch, Washington, D.C. 20230 and from Department of Commerce Field Offices. Non-governmental sources such as banks, shipping and airline companies, and freight forwarders frequently can provide use- ful information. The attractiveness of any free trade zone or related facility as a base for international busi- ness operations will depend in large measure on the tariffs and trade regulations of the host country and those of nearby market areas and also on the laws and regulations applicable to the zone itself. A potential user should be thor- oughly familiar with both. General information on the trade regulations of most countries in the world is regularly pub- lished by the Department of Commerce. It is contained in the Overseas Business Report series, "Foreign Trade Regulations of (coun- try)." These publications are cited in the Checklist mentioned above and are obtainable at nominal cost. Specific information on the tariffs, taxes and import controls imposed on a given commodity by an individual country will be furnished upon request by the Office of In- ternational Regional Economics, Bureau of In- ternational Commerce, U.S. Department of Commerce, Washington, D. C. 20230. Any re- quest should contain a full description of the product. The laws and regulations pertaining to in- dividual free trade zones are summarized in Part Two of this publication. Where known, full citation to text is given. In most cases, copies or summaries will be available from the admin- istering authority of the particular zone. 15 Chapter 7 Factors Affecting the Establishment Of Free Trade Zones; Some Current Trends In the past, most free trade zones and related facilities had as their primary purpose the stor- age and transshipment of foreign goods intend- ed for neighboring countries. They were usually established by coastal countries in seaports that had direct access to major overseas trade routes and that handled or were believed likely to han- dle substantial volumes of third-country traffic. When trans-oceanic shipping services were slow, sailings infrequent, and calls seldom made at secondary ports, the use of such intermedi- ate transshipment points was often essential. In recent years, the importance of this func- tion in many free trade zones has undergone a relative decline. The size of markets and the volume of shipments have generally increased, and fast, frequent and direct shipping services between countries of origin and countries of destination have generally become available. As a consequence, a large number of free trade zones have become primarily import-serving fa- cilities; most of the foreign shipments they re- ceive subsequently enter the customs territory of the country in which they are located. However, there are some indications that im- proved transportation technology such as con- tainerization may in the future restore the transshipment function of certain free trade zones. Trade Is Expedited In most cases, free trade zones and related customs-privileged facilities do not create or generate trade. Rather, they tend to facilitate, expedite and sometimes promote the conduct of trade that is economically feasible for an area. In a sound economic setting, they can provide the means for trade and related activity that might otherwise not be possible. These facilities are generally of greater di- rect benefit to business firms than to the coun- tries that sponsor them. Although a free trade zone or related facility can be subsidized or permitted to operate at a loss in order to pro- vide a convenience in a port, to cut down on inspection costs and control procedures for transit and reexport goods, to provide local la- bor with jobs, etc., most are intended to be economically viable or self-supporting. One very important factor contributing to the ability of a zone to be self-supporting is the number and size of markets to which it affords access. These markets, in turn, are usually de- termined by the geographical location of the country and city in which the facility is locat- ed and by the presence of competition, e.g., bonded warehouses and nearby zones. Even with these conditions favorable, the volume of business likely to be carried on in a zone will depend upon the establishment of an environ- ment conducive to its use. The essentials in- clude the selection of a site which has conve- nient access to both international and inland transportation (usually a portion or the whole of a major port or airport), the promulgation of legislation or regulations which will permit a wide range of operations, provision of ade- 16 quate internal facilities (warehouses, storage areas, security safeguards, handling equipment, etc.), and the adoption of efficient administra- tive procedures under which goods can be en- tered, dispatched and cleared expeditiously. Imports Are Facilitated As noted above, however, many of the free trade zones presently in operation have turned out to be vehicles for facilitating imports. The greater part of the foreign merchandise brought into such a zone is subsequently trans- ferred into the customs territory of the host country. The role of facilitating imports which characterizes these zones is to be distinguished from the role of "reexport" where much of the merchandise brought into a zone is stored, pro- cessed, or manufactured before reexport or transshipment to nearby countries. The import facilitation role is usually attributed to vastly expanded and improved transportation facili- ties serving nearby countries and to the spread of industrial technology and capability which has reduced the importance of traditional inter- mediate storing and processing areas. Alteration of this pattern on any appreciable scale, particularly by a new free trade zone, appears to demand a strategic geographic loca- tion and a stable national political and econom- ic climate, as well as the presence of the conditions mentioned above. Newly Organized Zones Newly organized zones which have succeeded in establishing a volume of reexport business in recent years are located at the convergence points of heavily-used international sea and air routes. They have had the benefit of developed commercial sectors, an abundance of skilled, rel- atively low-cost labor, and exercised minimal regulatory controls over business and foreign exchange operations. Moreover, they have ex- tended to zone users tax incentives additional to customs privileges in the form of tax holidays for manufacturers and whole or partial tax ex- emption on sales abroad. It might be noted that the technique of granting such fiscal incentives to zone users has been adopted by a number of countries which have recently established zones intended to promote manufacturing for export. "Import zones," while less successful in terms of promoting new trade and employment, can serve useful purposes by speeding up the han- dling, processing, and eventual customs clear- ance of merchandise for import. Many if not most of the free trade zones in developed, in- dustrialized countries are in this category. Few countries possess the special characteris- tics apparently needed for "reexport zones," while many of the less developed countries find the establishment of "import zones" to be out of line with their development priorities. Howev- er, in recent years there has developed an adap- tation of the free trade zone concept, intended to foster manufacturing (based on imported components or raw materials) for export, and which has been employed by several less devel- oped countries. This is the "export processing zone," an industrial site surrounded by a cus- toms fence in which duty free entry privileges are restricted to the raw materials and com- ponents and usually, capital equipment and supplies required by users of the zone. Location in such a facility is usually limited to export manufacturers and ancillary service enterprises ; imports into the host country of either import- ed materials or finished manufactured items are frequently prohibited. Again, favorable loca- tion, regulatory conditions, physical facilities, investment climate and efficient procedures seem to be required. The development of a successful free trade zone of any of the three types described in the preceding paragraph requires the allocation of substantial resources and the expenditure of considerable administrative effort. Frequently, a lengthy time-lag occurs between initial outlay and realization of benefit. The facility must have a hinterland with sufficient economic resources to support it, and it should be designed for the specific functions and operations required by the business community that will use it. For this reason, any decision to develop such a fa- cility should be preceded by a careful evaluation of the factors involved. These include a realistic appraisal of the market potential of the pro- posed facility and, if possible, advance survey or solicitation of the views of prospective zone users. Where the prospective volume of business does not appear to justify the creation of either a free trade zone or an export processing zone, customs-bonded warehousing and manufactur- ing systems are sometimes satisfactorily uti- lized and, depending on local regulations, afford many of the advantages of a free trade zone. 17 Part Two FREE TRADE ZONES AND RELATED FACILITIES OPERATING ABROAD 19 EUROPE ATLANTIC OCEAN IRELAND Shannon International Free Airport 1. Graz, Austria 2. Linz, Austria 3. Solbad Hall, Austria 4. Vienna, Austria 5. Copenhagen, Denmark 6. Hanko, Finland 7. Helsinki, Finland 8. Turku, Finland 9. Bremen, Germany 10. Bremerhaven, Germany 11. Cuxhaven, Germany 12. Emden, Germany 13. Hamburg, Germany 14. Kiel, Germany 15. Gibraltar 16. Piraeus, Greece 17. Thessaloniki, Greece 18. Shannon International Free Airport, Ireland 19 Trieste, Italy 20. Venice, Italy 21. Barcelona, Spain 22. Cadiz, Spain 23. Vigo, Spain 24. Canary Islands, Spain 25. Ceuta, Spain 20. Melilla, Spain 27. Gothenburg, Sweden 28. Malmo, Sweden 29. Stockholm, Sweden 30. Belgrade, Yugoslavia 31. Koper, Yugoslavia 32. NoviSad, Yugoslavia 33. Rijeka, Yugoslavia 34. Split, Yugoslavia Europe COUNTRY TYPE OF FACILITY PLACE Austria Free Trade Zone Graz Free Trade Zone Linz Free Trade Zone Solbad Hall Free Trade Zone Vienna Belgium Special Facilities Major ports and airports Denmark Free Trade Zone Copenhagen Finland Free Trade Zone Hanko Free Trade Zone Helsinki Free Trade Zone Turku Germany, Federal Republic of Free Trade Zone Bremen Free Trade Zone Bremerhaven Free Trade Zone Cuxhaven Free Trade Zone Emden Free Trade Zone Hamburg Free Trade Zone Kiel Gibraltar Free Port Greece Free Trade Zone Piraeus Free Trade Zone Thessaloniki Ireland Free Trade Zone Shannon International Free Airport Italy Free Trade Zone Trieste Free Trade Zone Vienna Special Facilities Bari, Genoa, Imperia, Leghorn, Naples, Palermo The Netherlands Special Facilities Major ports and airports Spain Free Trade Zone Barcelona Free Trade Zone Cadiz Free Trade Zone Vigo Free Ports Canary Islands, Ceuta, and Melilla Special Facilities Algeciras, Alicante, Bilbao, Huelva, La Coruna, Las Palmas, Malaga, Pasajes, Santander, Seville, Valencia Sweden Free Trade Zone Gothenburg Free Trade Zone Malmo Free Trade Zone Stockholm Switzerland Special Facilities Major cities Yugoslavia Free Trade Zone Belgrade Free Trade Zone Koper Free Trade Zone Novi Sad Free Trade Zone Rijeka Free Trade Zone Split 21 Chapter 3 Free Trade Zones and Related Facilities in Europe Austria Austria has four free trade zones lo- cated in Graz, Linz, Solbad Hall and Vienna. Austria, because of its location, functions as a gateway for trade and commerce between northern and southern Europe and between eastern and western Europe. The country, which is land-locked, has a population of about 7.3 million. It is bordered by Yugoslavia and Italy on the south, Switzerland on the west, the Federal Republic of Germany and Czechoslova- kia on the north, and Hungary on the east. Austria straddles the Danube River, which serves as a major water transportation artery. Austria is a member of the European Free Trade Association (EFTA) and has recently expressed interest in association with the Eu- ropean Economic Community (EEC or "Com- mon Market"). Austria is also signatory to the General Agreement on Tariffs and Trade (GATT). The Austrian Customs Bill of 1955 is the leg- islation authorizing the establishment and oper- ations of the free trade zones in Austria. Its provisions are applicable to the four free trade zones. Free Trade Zone in Graz Location The free trade zone is located in Graz, the 22 capital of the Province of Styria in southeast- ern Austria. Although about three-quarters of the land area of Styria's 6,300 square miles are wooded or agricultural, some 11 percent of Aus- tria's industrial enterprises are located in the province, concentrated primarily in and around the city of Graz. Iron ore deposits are mined in the northern part of the province. The popula- tion of Styria is about 1,165,000, of whom about 252,000 live in Graz. Graz is situated on rail and highway routes that cross Austria. It functions as a transship- ment center for trade between the western Eu- ropean countries and Yugoslavia, Hungary and other countries of southeastern Europe. Over- land transportation links Graz with the nearest maritime ports of Trieste in Italy, and Rijeka in Yugoslavia. Authorized Operations Foreign products may be brought into the free trade zone without the payment of cus- toms duties. Duties are collected only if the goods are imported into the customs territory of Austria from the free trade zone. Upon entry into the customs territory, goods are subject to duties which may be determined either on the basis of their condition upon entry into the free trade zone or upon withdrawal, at the op- tion of the importer. If products produced or manufactured in the zone from domestic and foreign component materials are imported into the customs territory of Austria, import duties are levied only on the value or quantity of for- eign components utilized in such products. Any Austrian materials or accessories which are used in production remain free of duty. For- eign capital equipment brought into the free trade zone for use within the zone and foreign consumer goods destined for consumption in the zone are subject to customs duties and taxes upon entry. Products brought into the zone may be stored, processed, manufactured, and packed without the payment of customs duties. Certain tax advantages are granted to firms operating in the zone. Austria has a system of so-called turnover taxes beginning at the manu- facturing level and assessed each time the goods change hands. The system is applied to all pro- cesses undertaken in Austria. The free trade zone is treated as foreign territory with re- gard to the application of turnover taxes. Deliv- eries and other operations undertaken within the free trade zone are not subject to turnover taxes. An Austrian certificate of origin may be obtained for foreign goods processed in the free trade zone if such goods have been in- creased in value by at least 33 1/3 percent by the processing. If the value of foreign goods is increased by 50 percent or more, or through one of the processing methods authorized under the EFTA Treaty, an EFTA certificate of ori- gin may be obtained for finished products to be shipped from the zone to another EFTA coun- try. Goods covered by such certificates can en- ter any EFTA country free of duty. Restrictions and Controls Regulations, e.g., fire and health, applicable to storage and handling of goods in Austria are also applicable to the free trade zone. Facilities Available Space available for open storage is approxi- mately 110,000 square feet; there is a covered storage area of about 65,000 square feet. Mailing Address: Zollfreizonen-Betriebsgesellschaftm.b.H. Bahnhofguertel 59 A-8020 Graz Styria, Austria Free Trade Zone in Linz Location The free trade zone is situated in the port of Linz, in northwestern Austria. The port, located on the Danube River, is one of the leading Danube transshipment ports in Austria. It pro- vides access to southern Germany, Czechoslo- vakia, Bulgaria, Hungary, Rumania, and Yugoslavia. It is located near an autobahn which connects Linz with Vienna and Salzburg. Its location also gives it convenient access to major railroad routes. The city of Linz, the capital of the Province of Upper Austria, is a transshipment center for western and eastern European trading nations. The industry of both the city and the Province is, to a large extent, involved in exporting. There are in the Linz area important iron and steel producing and manufacturing plants, alu- minum, chemical, asbestos, and textile plants. About 15 percent of Austria's industrial enter- prises are located in Upper Austria. The popula- tion of Linz is about 205,000; the province has about 1,170,000 people. Authorized Operations See section under this heading in the sum- mary of the free trade zone in Graz. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone in Graz. Administering Authority The free trade zone at Graz is operated by Zollfreizonen-Betriebsgesellschaft m.b.H. (Free Zone Management Company, Ltd.), a limited partnership established in 1958. The partners include important industrial enterprises and local government agencies. Facilities Available The free trade zone has about 1,020,000 square feet of open storage space. There are about 425,000 square feet of covered space in warehouses and sheds, 59,000 square feet of refrigerated warehouse space, and an office 23 building with 39,000 square feet of space. The free trade zone has a six-floor industrial build- ing with about 136,000 square feet of ground space for manufacturing enterprises, and as- sembly workshops totaling about 58,000 square feet. The zone is equipped with modern han- dling, loading, and unloading facilities. Administering Authority The free trade zone at Linz is operated by an independent corporation, Oesterreichische Zol- Ifreizonen-Betriebs-A.G. (Austrian Free Zone Management Company). Its shareholders in- clude the municipality of Linz, the provincial government of Upper Austria, and one of the largest nationalized banks of Austria. Mailing Address : Oesterreichische Zollfreizonen-Betriebs- A.G. Stadthafen A-4020 Linz Upper Austria, Austria Free Trade Zone in Solbad Hall Location The free trade zone in Solbad Hall is in west- ern Austria, approximately five miles east of Innsbruck in the Province of Tyrol. Solbad Hall is situated on the main east-west rail and high- way route, Arlberg-Innsbruck-Salzburg-Linz- Vienna. It is on the main arterial road from France and Switzerland to Vienna and Eastern Europe, and from Scandinavia, Western Ger- many, and the Benelux states to Italy and the rest of the Mediterranean area. The Province of Tyrol, with land area of about 4,900 square miles, is mainly mountain- ous including heavily wooded terrain, numer- ous mountain pastures, farms, ski resorts, glaciers and barren areas. A few industrial plants are located in the valleys. Tyrol has a population of 483,000, of whom about 109,000 reside in Innsbruck. Authorized Operations See section under this heading in the sum- mary of the free trade zone in Graz. Special facilities have been provided at the free trade zone in Solbad Hall for companies involved in the processing and trade in wines and beverages, and certain advantages may be granted to such companies using the zone. For example, blending of foreign wines or of do- mestic wines brought into the zone may be carried out without the authorization of cus- toms authorities. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone in Graz. Facilities Available Open storage space in the free trade zone in- cludes about 550,000 square feet. Covered stor- age includes approximately 290,000 square feet. There is a ten-story warehouse, which provides facilities for the storage of heavy goods, bulk articles, automobiles, and wines and other bev- erages. Tank storage for wines and spirits has a capacity of 350,000 U.S. gallons. In addition, there is room for warehousing beverages in transportable barrels and in bottles. Filtering plants are available for the treatment of stored beverages. Warehouse space may be rented, and industrial building sites where foreign firms may erect their own facilities are available in the free trade zone. Administering Authority The free trade zone at Solbad Hall is admin- istered by a limited partnership established in 1955, Tiroler Zollfrelzonen Betriebsgesellsc- haft m.b.H., (Tyrolean Free Zone Management Co., Ltd.), which includes among its partners the provincial government of Tyrol, the munic- ipalities of Solbad Hall and Innsbruck, the Tyrol and Venice Chambers of Commerce, the Aust- rian Credit Institute, and several forwarding, manufacturing, and trading firms. Mailing Address: Tiroler Zollfreizonen Betriebsgesellschaft m.b.H. A-6060 Solbad Hall Tyrol, Austria 24 Information on conditions and charges for storing goods in the free trade zone is contained in Conditions for Storing Goods in the Tyrolean Custom-Free Zone, a publication obtainable from the administering authority. Free Trade Zone in Vienna Location The Vienna free trade zone, opened in 1965 in the Danube harbor area, is the newest of Austria's free trade zones. Vienna, capital city of Austria, is located in the northeastern part of the country and in the midst of its largest industrial concentration. About 35 percent of Austria's industrial enterprises are centered in Vienna itself. The city of Vienna and its sur- rounding area — the Province of Vienna — have a population of about 1,640,000 and a land area of about 160 square miles. Vienna functions as a gateway port for trade between western European countries and south- eastern Europe. Rail and highway transporta- tion afford access to all parts of Austria and southern Germany. Vienna is also centrally sit- uated on the Europakanal, a 2,000-mile water- way currently under construction. At its completion, targeted for 1981, it will link the North and Black seas via the Rhine, Main and Danube rivers, thereby extending the range of Danube shipping to Basel, Strasbourg, the Ruhr area and Rotterdam. Much of this waterway is presently in use. Authorized Operations See section under this heading in the sum- mary of the free trade zone in Graz. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone in Graz. Facilities Available The Vienna free trade zone occupies about 2 million square feet facing on the Danube har- bor. Since its opening in 1965, a central ware- house and a new office building have been built. The warehouse provides 367,000 square feet of storage space on eight floors serviced by ten freight elevators. The first three floors are re- served for manufacturing, processing and re- packing operations. The warehouse is directly accessible from railroad cars, riverboats, and trucks. The nine-floor office building accommo- dates the administration of the free trade zone, as well as the offices of 58 forwarding and trad- ing firms on a total area of 35,000 square feet. In addition to numerous sheds and provisional warehouses, about 324,000 square feet of open storage space are available. Other facilities include storage space for 5,- 000 to 8,000 automobiles, car washing and ser- vicing installations, a post office, and a railroad freight station. Several large manufacturing concerns and forwarding firms have built their own warehouses in the zone, which has also become the seat of the European Carpet Ex- change. Carpet exporting countries (Afghan- istan, Iran, Rumania, Bulgaria, etc.) store their products in the Vienna Free Trade Zone where they meet with prospective buyers from West- ern Europe. A carpet washing plant is also available. Construction of other facilities, such as a refrigerated warehouse, is in progress. Administering Authority The free trade zone is administered by Wie- ner Hafen-Betriebsgesellschaft m.b.H. (Vienna Port Management Company, Ltd.), a limited partnership including representation from the municipality of Vienna, the Vienna Chamber of Commerce, and Vienna Fair Management, Inc. Mailing Address : Wiener Hafen-Betriebsgesellschaft m.b.H. Freudenauer Hafenstrasse 31 A-1020 Vienna II, Austria 25 Belgium Belgium has special facilities — a liber- al customs law and a system of bond- ed warehouses which afford many of the privileges and facilities offered by free trade zones and free ports else- where in the world. The Kingdom of Belgium has an area of 11,775 square miles with a 39-mile seaboard on the North Sea. It is bounded on the north by the Netherlands, on the west and the south by France, and on the east by the Federal Repub- lic of Germany and Luxembourg. With a popu- lation of 9.6 million, it is one of the most densely populated countries in the world. Belgium's economy is predominantly indus- trial. The industrial sector processes raw and semi-manufactured goods and exports some 70 percent of its output. Belgium is a member of the Belgium-Luxembourg Economic Union, the Benelux Economic Union, the European Economic Community (EEC or "Common Mar- ket") and is signatory to the General Agree- ment on Tariffs and Trade (GATT) . Belgium's transportation network is highly developed. With 2,694 miles of railroad track, it has one of the densest railway networks in Europe. The main Paris-Amsterdam and Paris- Berlin rail routes pass through the Belgian capital, Brussels, and much of the United King- dom-European trade passes through the ports of Antwerp, Ostend and Zeebrugge for surface transportation to third countries. Belgium also has 7,300 miles of first-class highways and an extensive inland waterway system. Inland wa- terways, serving most industrial centers, are of greater importance in the domestic carriage of goods than railways. Antwerp, situated 53 miles from the North Sea on the Scheldt River, is the chief Belgian maritime port. Although special warehouses for the storage or processing of goods intended for reexport or in transit may be established anywhere in Bel- gium, they are concentrated in port areas. Ma- jor warehousing areas are located in Antwerp, Ghent, Brussels, Ostend, Brugge-Zeebrugge, and at the National Airport in Zaventem near Brussels. Authorized Operations and Facilities Although there are no free trade zones or free ports as such in Belgium, the applicable lib- eral customs system affords many of the privileges, services, and facilities customarily afforded by free trade zones and free ports else- where in the world. Under this system, goods in transit through Belgium or intended for sub- sequent reexport may be stored in warehouses without payment of customs duties or other taxes, and are subject only to minimal customs formalities. In addition, imported goods intend- ed for manufacture in Belgium and reexport may be admitted on a temporary basis without payment of customs duties or taxes. Warehousing System : Depending on type, customs classification, probable duration of storage, and whether or not processing is intended, goods of foreign ori- gin may be placed in one of four types of ware- houses without payment of customs duties and taxes. Descriptions of the four types of ware- houses and the facilities they afford follow: Customs bonded warehouses (Entrepots pub- lics) are similar to those operated in most coun- tries. This type of warehouse is under the exclusive control of the customs authorities and located on premises belonging to a commune (municipality). Goods may be stored for unlim- ited periods of time without payment of customs duties or other applicable taxes; more- over, import licenses are not required. Storage in customs bonded warehouses is reserved to dutiable goods; however, perishable, bulky, dan- gerous or highly inflammable goods are pro- hibited. In addition to storage, the operations per- mitted in a customs bonded warehouse include repacking, classifying, sorting, sampling, mix- ing, blending and similar activities. In most cases, permission to undertake such activities must be obtained from the controller of cus- toms in charge of the area. Free transit warehouses (Magasins libres de transit) are reserved for duty-free goods in transit imported from abroad and are not locked by customs. The customs control of these warehouses is limited to casual inspection with- out previous notice intended to verify the actual presence of the goods. 26 Private warehouses (Entrepots particuliers) are primarily used for the storage of wines and spirits and non-manufactured tobacco. They are also used for goods excluded from storage in customs bonded warehouses (i.e., free goods, bulky goods and dangerous goods) and other goods if space is not available in customs bond- ed warehouses. The private warehouses are locked by both the user and the customs author- ities and are located on private property. They are under customs supervision. A guarantee for import duties must generally be deposited, and goods are checked by customs on arrival. Bot- tling and mixing of wines and alcoholic prepa- rations are allowed in private warehouses under certain conditions. "Fictif" warehouses (private bonded ware- houses) are located on private property under the supervision of the owner, but subject to inspection by customs authorities. The ware- houses are neither guarded nor locked by cus- toms. Any depot or defined area such as a factory may be designated as a "fictif" ware- house for the storage of specified dutiable goods. These goods are primarily items on which low duties are levied such as raw mater- ials, semi-finished products, materials required in manufacturing or assembly operations, ply- wood and construction sheets, fuel, vegetable oils, partly manufactured iron and steel pro- ducts, certain grains, wines, flours, and fruits. Such goods may be stored duty free in "fictif" warehouses after a guarantee for import duties is deposited, an import license is presented (if necessary), and verification procedures by cus- toms authorities are completed. Goods may be removed from the "fictif" warehouses for inter- nal consumption, for transfer to another "fic- tif" warehouse, or for reexportation. In "fictif" warehouses, only fruits may be repacked with- out restriction; other commodities may be repacked in exceptional cases. No other process- ing is permitted. Temporary Exemption System for Manufac- turing: Raw materials and parts may be temporarily imported into Belgium, exempt from customs duties for manufacturing, processing or assem- bling purposes if a certain proportion of the goods are to be reexported outside the Common Market. Customs duties are due on the import- ed raw materials and parts in the proportion that such goods are sold within the common market. Temporary exemption permits are val- id for 1 year and are renewable. A guarantee (e.g., a bank guarantee) may be required by the customs authorities. After cus- toms examination and presentation of an im- port license, if necessary, the raw materials and parts are placed at the importer's disposal and they may be privately warehoused anywhere in Belgium. Similarly, raw materials and parts, whether or not subject to import duties, may be im- ported into Belgium with temporary exemption, in whole or in part, from the Belgian purchase tax (taxe de transynission ou de luxe) for man- ufacturing, processing or assembling purposes, provided a certain proportion of the resulting products are to be reexported from Belgium. The tax is due on the imported raw materials and parts in the proportion that such goods are sold in Belgium. In certain cases the temporary exemption may be replaced by a payment at the time of importation but the goods, when exported, receive a compensatory credit. The system of temporary imports may be extended to include the importation of goods simply ware- housed in Belgium for export purposes. Inquiries concerning the temporary exemp- tion system should be addressed to the Admin- istration Centrale des douanes et accises, Minister e des Finances (Central Administra- tion, Customs and Excise, Ministry of Finance), 59 rue Ducale, Brussels, Belgium. Administering Authorities-Mailing Addresses: Information about warehouse facilities and customs practices in Belgium may be obtained from the following authorities: Antwerp: Stad Antwerpen (City of Antwerp) Havenbedrijf, Algemene Directie (Gener- al Management for Port Administration) Stadhuis Antwerp, Belgium Ghent: General Management of the Port Vliegtuigelaan 1 Ghent, Belgium Brugge-Zeebrugge: N.V. Maatschappij der Brugge Zeevaartin- stellingen (Port Authority of Brugge-Zeebrugge) Brugge, Belgium 27 Brussels: S.A. du Canal et des Installations Maritime de Bruxelles (Canal and Port Facilities Co.) Redersplaats 1 Brussels, Belgium Ostend: Stad Ostende (City of Ostend) Havenbedrijf (Port Administration) Slijkenssteenweg 1 Ostend, Belgium Four Belgian airports, Brussels-National (the largest), Ostend-Middelkerke, Charleroi- Gosselies, and Antwerp-Deurne, have customs facilities permitting the duty-free entry and deposit of goods. Information about the facili- ties and privileges applicable to the airports may be obtained from: Regie des Voies Aeriennes (Civil Aviation Authority) 41 Avenue des Arts Brussels, Belgium SABENA (Belgian national airlines) 35 Rue Cardinal Mercier Brussels, Belgium Denmark Denmark has a free trade zone at Copenhagen. The Kingdom of Denmark is made up of three distinct geographic areas, namely, Denmark, the Faroe Islands and Greenland. Denmark con- sists of the Jutland peninsula and about 500 islands in the Baltic Sea, the largest of which is Zealand, where Copenhagen is located. Ex- cept for the Jutland peninsula's short southern boundary with the Federal Republic of Ger- many, Denmark is surrounded by water. It faces the North Sea on the west, the Skagerrak on the north, and the Kattegat, Oresund and Baltic Sea on the east. In all, Denmark has a land area of about 16,620 square miles and a population of about 4.8 million. Long an agricultural country, Denmark has become highly industrialized in the years since World War II. Its chief industries are manu- facture of machinery and electrical equipment, textiles and clothing, chemicals, food processing and shipbuilding. The country, however, lacks many raw materials and is dependent upon im- ports to sustain its industry. Owing to its insu- lar character, Denmark relies heavily on water transportation for domestic distribution as well as international trade. Supplementing water transport are 2,160 miles of railroads, and 5,320 miles of primary roads. Denmark is a member of the European Free Trade Association (EFTA) and is signatory to the General Agree- ment on Tariffs and Trade (GATT). The legal basis for the establishment and operation of the Copenhagen free trade zone is the Copenhagen Free Port Law of March 31, 1891, as amended by the Free Port Act of March 31, 1960. Free Trade Zone at Copenhagen Location Copenhagen is Denmark's capital, principal population center, industrial hub and primary maritime port. It is situated on the eastern coast of the island of Zealand, opposite the Swedish mainland. It faces on the Oresund near the main entrance to the Baltic Sea. This location affords it access to major shipping routes serving northern and central European markets. Water routes connect Copenhagen with all areas of Denmark; additionally, it is served by rail, highway and air transport lines. The Copenhagen metropolitan area has a pop- ulation of approximately 1.4 million. The free trade zone is situated in the port of Copenhagen. It is the largest free trade zone in Scandinavia. About 5,000 ships call at the zone annually. Authorized Operations Goods of foreign origin may be brought into the free trade zone without payment of customs duties or other import taxes. Goods remain free of Danish duties while held in the zone, or if subsequently reexported. Duties become pay- able, however, if goods are removed from the zone for consumption within the customs ter- ritory of Denmark. 28 Authorized operations include storage, sam- pling, sorting, mixing, marking, repacking, pro- cessing, exhibiting, and manufacturing. No con- tributions or taxes are paid either on the value of the goods held in the zone or on profits made on the sale and purchase of goods when handled for foreign account. Within the zone, the administering authority — the Free Port Company — has responsibility for cargo control, stevedoring, weighing, mea- suring and tallying shipments, and internal transportation. Upon request, it will issue warehouse warrants to owners of consignment stocks to enable them or their agents to obtain loans on goods stored in the area. and trailer tractors, and about 17 miles of in- ternal roads and 20 miles of railroad track. Firms operating within the zone may lease space in buildings belonging to the administer- ing authority or may construct their own facil- ities on sites leased from the administering authority. Administering Authority The free trade zone is administered by the Copenhagen Free Port Company, Ltd., operat- ing under the control of the Ministry of Public Works and wholly owned by the Port of Copen- hagen Authority. Restrictions and Controls The consumption of undeclared dutiable goods within the zone is prohibited. Special re- strictions and controls apply to the handling and storage of dangerous or high-value goods. The establishment within the zone of manu- facturing or other processing operations of an industrial character requires the prior permis- sion of the Ministry of Public Works. Prior permission of this Ministry is also required for retail operations within the zone. Facilities Available The free trade zone comprises about 215 acres, including a land area of 161 acres. A total of 56 transit sheds and 26 warehouses provide more than 3 million square feet of covered stor- age space. These facilities include cold stores and special air conditioned and heated ware- houses and transit sheds for fresh fruit and other perishables. Although the zone contains grain silos with a storage capacity of about 30,000 metric tons, these facilities are presently under lease and the administering authority does not have additional grain storage capacity to offer. Special exhibit and sales facilities are available to zone users for the display of goods and the solicitation of orders. The free trade zone has about 26,000 linear feet of quays, with water depths ranging from 25 to 33 feet, and has docking and reception fa- cilities for passenger liners as well as cargo traffic. It is equipped with about 100 dock and mobile cranes, a large fleet of fork-lift trucks Mailing Address : The Copenhagen Free Port Company, Ltd. Copenhagen, Denmark Note: In addition to the free trade zone facilities at Copenhagen, the Danish Government operates warehouses as supplementary fa- cilities at Copenhagen, Helsingor, Odense, Aarhus, Horsens, Aalborg and Esbjerg. Goods may be entered, stored and proces- sed in such warehouses without payment of customs duties. Manufacturing, however, is not permitted. Finland Finland has three free trade zones, lo- cated at Hanko, Helsinki and Turku. Finland, with a land area of 130,000 square miles and a population of 4.7 million, is the fourth largest but one of the most sparsely populated countries in Western Europe. About one-third of its total length lies north of the Arctic Circle. Finland has land borders with the Soviet Union on the east and southeast, with Norway on the north, and Sweden on the west. The southern part of the country is a peninsula surrounded by two arms of the Baltic Sea, the Gulf of Bothnia on the west and the Gulf of Finland on the south. 29 Traditionally agricultural, Finland has be- come increasingly urban and industrialized in recent years. Forestry and forest-based indus- tries are the most significant economic enter- prises and account for nearly two-thirds of total exports. Finland is a member of the General Agreement on Tariffs and Trade (GATT), of the Organization of Economic Cooperation and Development (OECD) and an associate member of the European Free Trade Area (EFTA) . Internal transportation is well developed in the central and southern parts of the country. Railroads connect major cities and agricultural areas, and in recent years, emphasis has been placed on improving and extending the road network as well. Finnish railroads and high- ways link with those of the Soviet Union. Inter- national maritime transportation is performed by Finnish and foreign carriers. Major Finnish maritime ports are Helsinki, Kotka, Turku, Hanko, Hamina, Pori and Maarianhamina. In- ternational air transportation is performed by the national airline, Finnair, and by a number of major foreign carriers. The establishment of free trade zones in Fin- land is a comparatively recent development. Pursuant to authorization from the Finnish cabinet, the zone at Hanko was opened in 1961 and the zones at Helsinki and Turku in 1965. These zones are locally administered; however, their operations are subject to the supervision of the National Board of Customs of the Ministry of Finance. Storage and handling charges are set by Government decree. Free Trade Zone at Hanko Location The port of Hanko (Hango), southernmost maritime port on the Finnish mainland, is situ- ated near the tip of the Cape of Hanko which juts out from the southwestern coast of Finland into the Baltic Sea near its entrance to the Gulf of Finland. Hanko has a population of about 8,000. Roads and rail lines link the area with Helsinki, about 100 miles to the east, and other population centers. The Hanko facility, called "Hanko Free Port," is the largest of the three Finnish free trade zones and is situated near the harbor area. Authorized Operations Goods of foreign origin may be brought into the free trade zone for storage or processing pending entry into Finland or reexport to third countries without payment of customs duties or the application of most other import controls. Full payment of applicable duties and compliance with other regulations are required, however, if the goods are subsequently entered into Finnish customs territory. Goods of Finnish origin, or duty-paid foreign goods, brought into the free trade zone are con- sidered exports. Upon entry into the zone, they become eligible for sales tax rebates or draw- back payments. Goods brought into the zone may be stored, broken down from bulk, sorted, mixed, blended, sampled, assembled, inspected, exhibited and re- packed. Manufacturing operations require spe- cific authorization from the Finnish Govern- ment. Restrictions and Controls Merchandise imports prohibited by Finnish customs law, e.g., explosives, highly inflamma- ble substances, or other goods which may be harmful to public health or have an injurious effect upon storage accommodations or other stored goods, are not permitted in the free trade zone. Additionally, Bank of Finland import pay- ment requirements apply to certain categories of goods (mostly passenger vehicles and con- sumer appliances) brought into the zone prior to importation into the customs territory of Finland. Facilities Available The Hanko free trade zone contains 10.8 mil- lion square feet of storage area, including ex- tensive covered space, both heated and unheat- ed. Designated areas have been set aside for assembly and repair operations and for exhibit- ing. Firms using the free trade zone may rent storage space in warehouses operated by the administering authority, or may lease land for the construction of their own buildings. The administering authority provides trans- portation and handling services within the zone. 30 The services of freight forwarding agents are also available. Administering Authority The free trade zone at Hanko is administered by a joint-stock company, Oy Saomen Vapaasa- tama (Free Port of Finland, Ltd.). The mu- nicipality of Hanko holds 15 percent of its capi- tal stock while the balance is held by various commercial enterprises or associations. Mailing Address: Managing Director Oy Suomen Vapaasatama Hanko, Tulliniemi Finland The Helsinki zone does not permit display, retail sales or open public offer of goods held within its confines. In practice, manufacture, fabrication and assembly operations are also precluded because of limitations of space. Facilities Available The Helsinki free trade zone is made up of four areas of the City of Helsinki Port Authori- ty's Storage and Quay Goods Control Service. Two buildings provide about 70,000 square feet of space for storage and other operations. Open space presently amounts to approximately 800,- 000 square feet and incorporation of an addi- tional open area of almost 200,000 square feet is planned. Free Trade Zone at Helsinki Location Helsinki is the largest city, principal port and capital of Finland. With a population of 560,000 Helsinki is situated on the southeast- ern coast facing the Gulf of Finland. Railroads and highways connect the city with other parts of Finland and the Soviet Union. There is reg- ularly-scheduled rail and motor transport ser- vice between Helsinki and Leningrad and Mos- cow. Helsinki is also the site of Finland's major international airport. The free trade zone is made up of a section of the City of Helsinki Port Authority's premises. Authorized Operations The customs treatment accorded goods brought into the free trade zone at Helsinki is the same as that described in the section under this heading in the summary of the free trade zone at Hanko. Goods brought into the Helsinki zone may be stored, broken down from bulk, sorted, mixed, blended and sampled. Assembly, manufacture or fabrication of goods in the zone requires spe- cific permission from the national government. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Hanko. Administering Authority The free trade zone is administered by Hel- singin Kaupungin Vapaavarasto (Helsinki Mu- nicipal Free Port Authority). Mailing Address : Helsingin Kaupungin Vapaavarasto Satamalaitos Etelaranta 10 Helsinki, Finland Free Trade Zone at Turku Location Turku is situated on the southwestern coast of Finland near the entrance to the Gulf of Bothnia. With a population of more than 140,- 000, it is the third largest city in Finland and the second largest port. The port has regular maritime cargo service to and from most ports in Western Europe. It is also an important rail hub and the terminus of major highways from the north and east. The free trade zone is locat- ed in the port area, but does not have immediate access to docking facilities. Authorized Operations The customs treatment of goods is the same as that described in the section under this head- ing in the summary of the free trade zone at 31 Hanko; the types of operations authorized in the zone are the same as those described in the section under this heading in the summary of the free trade zone at Helsinki. Industrial op- erations are permitted only with specific per- mission from the national Government. Federal Republic of Germany Restrictions and Controls See section under this heading in the summa- ry of the free trade zone at Hanko. The Turku zone does not permit display, retail sales or open public offer of goods held within its con- fines. Facilities Available The Turku zone has an area of 10 acres; an enlargement to 30 acres is planned. Covered fa- cilities consist of a 700,000 cubic-foot ware- house. Space, both heated and unheated, is available for rent in the warehouse, or firms may construct their own facilities on leased land. Freight forwarding services are available through resident freight forwarding agents. By special agreements with the shipper, the admin- istering authority also may act in the capacity of consignee (without taking title to goods) and release them in accordance with the ship- per's instructions. Administering Authority The Turku free trade zone is administered by a joint-stock company, Turun Vapaavarasto Oy (Turku Free Port, Ltd.). One-third of its own- ership is held by the City of Turku, and the re- mainder by private corporations. Foreigners may also hold stock in the company. Mailing Address: Managing Director Turun Vapaavarasto Oy Turku, Finland The Federal Republic of Germany has six free trade zones. They are located at Bremen, Bremerhaven, Cuxhaven, Emden, Hamburg and Kiel. The Federal Republic of Germany borders Denmark and the North and Baltic Seas in the north, and Switzerland and Austria in the south. Bordering on the east are East Germany and Czechoslovakia, and on the west France, Luxembourg, Belgium and the Netherlands. The Federal Republic, including West Berlin, has a land area of 95,929 square miles and a population of 60 million. The German Federal Republic is largely urban and heavily industrialized. Foreign trade is highly important to its economy, accounting for some one-third of its gross national product. As a world trader, the country ranks second only to the United States. It is a member of the European Economic Community (EEC or "Com- mon Market"), and is signatory to the General Agreement on Tariffs and Trade (GATT). Germany's transportation network is well de- veloped. There are approximately 21,000 miles of railroads and 100,000 miles of classified highways including an extensive autobahn system which interconnect all points and extend to the borders to link with the transportation systems of neighboring countries. Inland water- way transport also is important in international and domestic commerce. The principal inland water arteries are the Rhine River and its trib- utaries and a network of canals which links the Ruhr area in west-central Germany with the North Sea ports. Numerous international maritime carriers serve eight major seaports. International air transportation is handled at nine commercial airports in the Federal Repub- lic and at the two airports in West Berlin. The Federal Republic's free trade zones, which in German are called Freihafen (free ports), have been long-established. Although some trace their history back to medieval times as "free cities," their modern form developed 32 after the unification of Germany. Legal sanc- tion for their activities has been incorporated into the customs law and regulations. Free Trade Zone at Bremen Location Bremen is an industrial and port city span- ning both banks of the Weser River approxi- mately 67 miles upstream from the North Sea. It is the second largest and southernmost of Germany's seaports. It can accommodate most types of ocean-going freighters, but is not ac- cessible to large passenger liners or the larger bulk carriers- Together with the port city of Bremerhaven, some 40 miles downstream it makes up the Land (State) of Bremen. The state, with a land area of 156 square miles, is the smallest in the Federal Republic. It has a population of 752,000, of whom more than 603,000 live in the city of Bremen. In addition to activities related to trade and shipping, Bremen functions as a major indus- trial complex. Principal industries include air- craft production, electronics, radio and televis- ion manufacturing, iron and steel rolling mills, oil refineries, sawmills, wool processing plants, shipyards, tobacco companies, breweries and food processing factories. International commerce to and from the ports of Bremen and Bremerhaven is served by some 240 shipping companies, which offer more than 550 scheduled liner sailings per month and numerous unscheduled sailings. The city of Bre- men also has an international airport. Railroads are the principal means of inland transportation to and from the port. Port facilities include a dense network of railroads and equipment to load directly to and from rail cars. There are frequent rail connections to major production and distribution centers including a daily con- tainer train to inland industrial centers. Road and inland water transportation are also avail- able. The Weser River intersects the German canal system making possible the transfer of goods by barge to the area served by the Rhine on the west and the Elbe on the east. The free trade zone in the port of Bremen has functioned since 1888, when Bremen, for- merly a "free city," was incorporated into the German Customs Union. Today the zone is made up of two distinct areas. The first or traditional "free port," consists of Europahafen and Ueberseehafen, two port basins in the cen- tral part of the harbor on the northeast bank of the Weser. The second, Neustadter Hafen, was opened in 1964 and consists of a dock area on the southwest bank of the river. This area is devoted largely to the handling of container- ized shipments. The Bremen and Hamburg free trade zones are the most active of such facilities in the Federal Republic of Germany. Authorized Operations Goods of foreign origin may be brought into the free trade zone without payment of customs duties or becoming subject to the usual customs formalities. They remain free of duties while held in the zone or when subsequently trans- shipped or reexported abroad. Customs duties become payable, however, if the goods are re- moved from the zone for consumption in Ger- many. Similar treatment is accorded with re- spect to the "Import Turnover Tax" (Einfuh- rumsatzsteuer) , i.e., the tax is not levied on foreign goods brought into, held or processed within the zone until such time as they may be removed for consumption in German customs territory. Goods of German origin brought into the free trade zone are considered exports and receive corresponding tax treatment. Goods may be held within the zone for an unlimited period of time. The principal operations authorized within the zone are: loading, unloading, forwarding, storage, sampling, sorting, dividing, repacking, refilling, marking, labeling and exhibiting. In addition, such processing as may be necessary to prevent damage to or deterioration of goods is permitted. Permissible industrial activities are confined to ship building and repair and such other operations on imported materials as may be specifically licensed by the Federal Ministry of Finance in Bonn. The main criterion for the issuance of a special license is that the proposed activity be to the general benefit of the national economy. Sales and auctions of merchandise may take place within the free trade zone. They are, how- ever, usually subject to controls designed to pre- vent unregulated retailing. Ship chandlering 33 may be carried on with the permission of the customs authorities. Restrictions and Controls With the exception of ship building and re- pair and specially licensed industries (as noted in the preceding section), manufacturing, as- sembly, and processing operations are not nor- mally permitted in the free trade zone. Addi- tionally, any operation (including repacking, refilling, sorting and dividing) which would change the customs classification of merchan- dise to a more favorable category than at the time of entry is expressly forbidden, unless es- sential to the salvage of merchandise. Both special salvage operations and specifically li- censed processing industries are subject to cus- toms surveillance. The consumption or permanent use within the free trade zone of customs-privileged goods is prohibited. Purchases and sales in small quantities are subject to special regulation. The renting of long-term storage space in the free trade zone is subject to approval by the customs authorities, and customs officials have the right to inspect long-term storage facilities. Customs approval is also required for the con- struction of new private facilities. Special regulations cover the entry, storage and exit of highly inflammable, explosive and unsanitary materials, valuables, works of art, precious metals, money, securities, highly fra- gile or perishable items, live animals, and goods apt to cause particular difficulty to the free trade zone operators. Facilities Available The traditional free trade zone on the north- east bank of the Weser River (the Europaha- fen and Ueberseehafen basins) covers about 455 acres of which approximately 75 percent is land. It provides berthing facilities at quays totaling about 19,500 feet in length. Quayside sheds, used mostly for short-term storage of transshipment cargoes, occupy about 2.2 mil- lion square feet, while warehouse space for longer-term storage and processing totals about 1.6 million square feet, including a re- frigerated storage plant with floor space of 58,000 square feet. Open storage space amounts to more than 500,000 square feet. The second area, Neustadter Hafen, on the southwest bank of the Weser covers an area of about 148 acres. It has about 5,000 feet of quays, transit sheds with an area of about 710,- 000 square feet, and open storage space of about 1.1 million square feet. Most of the Neustadter Hafen facilities are devoted to the Bremen Container Terminal. Most of the facilities in the free trade zone, including transit sheds and warehouses, are city-owned and operated by the Bremer Lager- haus-Gesellschaft (Bremen Warehouse Compa- ny). Some storage facilities, however, are pri- vately controlled. Space may be rented from the operators by firms wishing to use the zone. Traders may either set up their own operations or engage the services of warehouse companies or other firms operating in the zone. In princi- ple it is possible to erect buildings or other structures within the free trade zone, but in practice space limitations and local custom would probably preclude new private construc- tion. Customs services are available 24 hours a day. Special provisions have been made by the Bremen customs authorities to expedite the clearance of goods from the zone to inland des- tinations or in transit to other countries through Germany. These include customs clear- ance of such shipments within the storage fa- cilities of the zone prior to their actual exit, and for eligible firms, i.e., those which con- tribute to a customs guarantee fund adminis- tered by the Bremen Chamber of Commerce, authorization to remove goods from the zone pending billing for customs duties. Goods shipped from the Bremen free trade zone in transit to other countries through German cus- toms territory are subject to a minimum of customs control. Administering Authority The land and port installations in the Bre- men free trade zone are owned and controlled by the City of Bremen. The official of the city government which exercises general supervi- sion over the operations of the zone and port facilities within its confines is the Senator fur Hafen, Schijfahrt und Verkehr (Senator for Ports, Shipping and Transport). Actual opera- tion and administration of the municipally 34 owned facilities, including storage warehouses and the Container Terminal, however, have been delegated by the City of Bremen to the Bremer Lagerhaus-Gesellschaft ( Bremen Warehouse Company). The city holds a con- trolling interest in this corporation. Customs surveillance of the free trade zone in the port of Bremen is exercised by the Hawptzollamt (Chief Customs Office) for the zone. The Hauptzollamt supervises the opera- tions of three customs offices which control merchandise leaving the zone for inland desti- nations, merchandise in transit through Ger- many to other countries, and the agency which polices the zone. The customs operation is car- ried out under the general supervision of the Federal Ministry of Finance in Bonn. Mailing Address: Bremer Lagerhaus-Gesellschaft Ueberseehafen 28 Bremen, Federal Republic of Germany Senator fur Hafen, Schiffahrt und Verkehr Kirchenstrasse 4 28 Bremen, Federal Republic of Germany Hauptzollamt Bremen-Freihafen Hans-Bockler-Strasse 56 28 Bremen, Federal Republic of Germany Free Trade Zone at Bremerhaven Location Bremerhaven, with a population of about 150,000, is the Federal Republic's major pas- senger terminal and commercial fishing port and is also developing container terminal facili- ties. It is situated approximately 27 miles from the North Sea on the northeastern bank of the Weser River, some 40 miles downstream from Bremen, for which it serves as an outport. Bremerhaven accommodates ocean liners and large bulk carriers which do not have access to Bremen. It has specialized facilities for the handling of bananas, bagged cargo, ammonia, bulk ore and unitized shipments. The transportation facilities serving Bre- merhaven are essentially the same as those at Bremen. (See section under this heading in the summary of the free trade zone at Bre- men.) Inland road and rail transportation serv- ing the port is routed via Bremen, and Bre- men's airport also serves Bremerhaven. Bremerhaven is part of the Land (State) of Bremen, and its port facilities are largely owned by the City of Bremen. The free trade zone is located in the port area. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Bremen. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Bremen. Facilities Available The Bremerhaven free trade zone covers the major part of the port of Bremerhaven, exclud- ing only the oldest section of the port, unimpor- tant in international trade and shipping activi- ties, and the commercial fisheries port. The zone has a total area of about 1,730 acres, of which about three-fourths is land area. It in- cludes four port basins with a total berthing space of 32,808 feet and an ocean liner terminal, "Columbus Quay," with berthing space of 3,362 feet. Covered storage space in the zone amounts to about 1.1 million square feet, of which about one-fourth has been leased on a long-term basis, while open storage space amounts to about 2.5 million square feet. Space for storage and other activities in the Bremerhaven free trade zone may be rented from the operators of existing facilities. New construction within the zone may be permitted under contract with the City of Bremen on land leased from the municipality on a long-term basis. Such arrangements are subject to cus- toms approval. Firms wishing to make use of the facilities in the zone may set up their own operations, or engage the services of warehouse operators or other firms operating in the zone. The same type of customs clearance facilities as at Bremen are available in the Bremerhaven free trade zone. See section under this heading in the summary of the free trade zone at Bre- men. 35 Administering Authority The land and port installations of the Bre- merhaven free trade zone, with the exception of an ore transshipment port placed in service in 1964, are owned and controlled by the city of Bremen. The Bremerhaven zone operates in the same manner and under the same general juris- diction as the Bremen zone. See section under this heading in the summary of the free trade zone at Bremen. Operation of the Bremerhaven zone is also carried out by the Bremer Lagerhaus-Gesell- schaft (Bremen Warehouse Company) under contract with the city of Bremen. This corpora- tion has a separate Bremerhaven office, Ka- jeanstalt Bremerhaven der Bremer Lagerhaus- Gesellschaft. Customs surveillance is exer- cised by the Hauptzollamt (Chief Customs Of- fice) for the Bremerhaven area. Mailing Address : Kajeanstalt Bremerhaven der Bremer La- gerhaus-Gesellschaft 285 Bremerhaven-Kaiserhafen Steubenstrasse Federal Republic of Germany Hauptzollamt, Bremerhaven Kaistrasse 285 Bremerhaven Federal Republic of Germany Senator fur Hafen, Schiffahrt und Verkehr Kirchenstrasse 4 28 Bremen Federal Republic of Germany Free Trade Zone at Cuxhaven: Location Cuxhaven is a seaport located near the junc- tion of the Elbe River and the North Sea. It is situated on the southwest bank of the Elbe in the Land (State) of Lower Saxony which has an area of 18,200 square miles and a population of about 7 million. However, many of the port installations are owned and administered by Land Hamburg (Hamburg State) and it func- tions as an outport for the port of Hamburg, some 56 miles further upstream on the Elbe River. Cuxhaven has a population of about 45,000. Cuxhaven serves primarily as a passenger terminal, bunkering facility and commercial fisheries port. Inland transportation is avail- able by rail and truck and the inland waterway routes which are joined to the Elbe. The near- est commercial airport is that of Hamburg. The free trade zone is located in the port area. Authorized Operations The customs treatment accorded goods brought into the zone is the same as that ac- corded in the other free trade zones of the Fed- eral Republic. See first paragraph of section under this heading in the summary of the free trade zone at Bremen. The only operation presently authorized within the Cuxhaven free trade zone, however, is storage. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Bremen. Facilities Available The free trade zone is made up of two sepa- rate areas, totaling about 135 acres. The first consists primarily of the Amerikahafen basin and ancillary shore installations in the main harbor area. It includes about 25,000 square feet of covered storage space. Open storage is permitted only for short periods of time dur- ing the transfer of goods. No particular space has been assigned for open storage. This por- tion of the free trade zone area also includes a large passenger terminal, Steubenhoeft. The second area consists of 50 acres to the north of Amerikahafen. It is used primarily by fishing craft. Firms wishing to use the facilities of the Cuxhaven free trade zone may rent space in the warehouse area. All contracts, leases, building modifications and new construction undertaken in the free trade zone area must be approved by the customs authorities. Administering Authority Most of the free trade zone facilities in Cuxhaven are owned and administered by Land Hamburg (Hamburg State). Operations are 36 directed by the Hamburgisches Hafen-und Bauamt Cuxhaven (Hamburg Port and Build- ing Authority-Cuxhaven), which is a division of the Amt fur Hafen und Schiffahrt (Harbor and Shipping Office) of Hamburg. The smaller northern section of the free trade zone is under the control of Land Niedersachsen (State of Lower Saxony). Mailing Address: Hamburgisches Hafen-und Bauamt Cux- haven Lentzkai 219 Cuxhaven Federal Republic of Germany Free Trade Zone at Emden Location Emden is situated about 50 miles from the North Sea on the northeast bank of the Ems River. It is a major seaport, specializing in the handling of iron ore, coal, grain, petroleum and bulk goods. It is also the economic center of the East Frisia area. In addition to port-related activities, it has shipbuilding industries, her- ring fisheries, a large automobile production plant, an oil refinery, and a number of manu- facturing plants. Emden, with a population of 47,000, is located in Land Niedersachsen (the State of Lower Saxony), which has a total land area of 18,200 square miles and a population of about 7 million. The port of Emden functions as a major transshipment center for iron ore imported for processing in the Ruhr area and other indus- trial centers, including the Saar region. About 3,500 ocean-going vessels and 6,000 barges en- ter the port annually. Emden is linked with the Ruhr through the Dortmund-Ems canal, which intersects the other canal and river systems of the area. Road and rail transportation to all interior points is also available. The interna- tional commercial airport nearest Emden is that at Bremen, some 90 miles to the south- east. There is also a small airport in Emden which handles charter services and some sched- uled domestic flights. The Emden free trade zone was established about 1901, and is situated within the port area. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Bremen. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Bremen. Facilities Available The Emden free trade zone is made up of Neuer Binnehafen (New Inner Harbor), one of the major port basins in the harbor, and ad- jacent onshore facilities. It covers a total area of 511 acres, of which about 60 percent is land. The free trade zone is used predominantly for the transshipment and storage of ore, coal and coke, although it is also used for the handling of other bulk commodities, and some ship chan- dlering is carried on. The length of quays in the free trade zone totals 4,650 feet. Open storage space for ores and coal is about 1.3 million square feet, and there are several smaller open storage areas for other goods. The zone also contains one shed with about 5,000 square feet of covered storage space. The erection of buildings and other struc- tures inside the free trade zone may be permit- ted. The required land would have to be leased on a long-term basis from the owner, the State of Lower Saxony, and any construction would be subject to the approval of the customs au- thorities. Special customs arrangements have been made to facilitate the transshipment of bulk cargo through the Emden free trade zone to in- land destinations. The customs authorities will accept declarations of incoming ore and coal bulk cargo immediately upon arrival on the basis of the ship's manifest and permit subse- quent storage and removal of such cargo with- out additional customs clearance. All other merchandise is handled in the normal manner by customs, i.e., imports are declared only if and when they actually leave the zone. Customs services are available 24 hours a day. 37 Administering Authority The free trade zone facilities for loading and unloading bulk cargo, as well as the storage facilities located in the free trade zone, are operated and maintained by Emder Hafen- Umschlags Gesellschaft m.b.H. (Emden Port Transfer Company, Ltd.), a corporation con- trolled by the Government of Land Niedersac- hsen (State of Lower Saxony). The land and most of the installations in the zone are owned by Land Nieder sacks en, and administered by the Wasser-und Schiffahrtsamt Emden (Em- den Port Authority), a public entity. Customs surveillance is exercised by the Hauptzollamt Emden (Chief Customs Office, Emden). Mailing Address: Emder Hafen-Umschlags Gesellschaft m.b.H. Am Delft 2 297 Emden Federal Republic of Germany Wasser-und Schiffahrtsamt Emden Friedrich Naumann-Strasse 9 297 Emden, Federal Republic of Germany Hauptzollamt Emden Ringstrasse 7 297 Emden, Federal Republic of Germany Free Trade Zone at Hamburg Location Hamburg spans both sides of the Elbe River at a point approximately 75 miles from the North Sea and about 56 miles upstream from Cuxhaven. It is the largest port in the Federal Republic and the easternmost port serving the North Sea-Atlantic shipping routes. In addi- tion to activities related to trade and shipping, Hamburg is an important financial and indus- trial center. Major industries include ship- yards, petroleum refineries, metallurgical works and flour mills. With a population of al- most 2 million, it is the second largest city in the Federal Republic. Together with the Ham- burg-administered portion of the port of Cux- haven, it forms Land Hamburg (State of Hamburg), which has a total area of 296 square miles. The port of Hamburg handles more than 20,- 000 sea-going vessels annually, about one-half of which are in the liner services of German and foreign shipping companies. Coastal vessels link the port with Scandinavia and other nearby areas, while the Elbe River provides an inland artery for barge traffic to and from Berlin, East Germany and Czechoslovakia. The Elbe is also intersected by canals which link it to the other German inland waterways. In addition, Hamburg offers rail and road transportation to all points in the Federal Republic and some adjacent areas, and has a major commercial airport. Freight patterns show that the port serves a market area which extends from south- eastern Germany and Switzerland through east- ern Europe to Scandinavia. The free trade zone in Hamburg has func- tioned since 1888 when Hamburg, formerly a "free city," joined the German Customs Union. The Hamburg free trade zone, called Frei- hafen Hamburg (Free Port of Hamburg), forms the core of the port area. With a total area of 5.6 square miles, it is the largest and most active of the German zones. It is made up of two separate sections, the first, or "Old Free Port," is situated east of the Kohlbrand channel which links the north and south arms of the Elbe and includes most of the basins and adjacent onshore facilities in that area of the port. The second and smaller area is made up of several basins and onshore installations west of the Kohlbrand. Authorized Operations The customs and tax treatment of goods in the Hamburg free trade zone is the same as that accorded in the other free trade zones of the Federal Republic. See section under this heading in the summary of the free trade zone at Bremen. The operations permitted in the other Ger- man free trade zones are also permitted in the Hamburg zone. In addition, however, the ad- ministration of the Hamburg zone is empow- ered to approve manufacturing, assembly and other processing operations, whether or not using imported materials. The chief criterion for the approval of such an operation is that its end products be intended primarily, although not necessarily exclusively, for reexport. The 38 permission of the Federal Ministry of Finance at Bonn is not required. Processing, e.g., clean- ing and sorting of goods intended for consump- tion in Germany, may be approved in the Ham- burg zone, even if it should lead to placement of goods in a more favorable tariff classification than at the time of entry into the zone. As in the other German free trade zones, ship chandlering and sales and auctions of merchandise (usually subject to controls de- signed to prevent unregulated retailing) nay be carried on. Restrictions and Controls With the exceptions that manufacturing, as- sembly and processing operations may be per- mitted in the Hamburg zone, and that customs surveillance, lease and construction approval and other regulatory functions are generally carried out by the zone's administering author- ity rather than by customs officials, the restric- tions and controls applied are similar to those in the other zones. For example, trade on a small quantity basis is subject to special regulation, facilities are subject to official inspection, and traffic in certain commodities may be prohib- ited or subject to special regulation. See section under this heading in the summary of the free trade zone at Bremen. Facilities Available The Hamburg free trade zone includes most of the basins in the central part of the harbor area. The "Old Free Port" section, or the area to the east of the Kohlbrand channel, includes most of the basins which handle general cargo and fruit as well as the greater number of the port's ship yards. It also incorporates Ham- burg's free port "warehouse town," made up of a series of large six to eight-story buildings and a central dispatch facility for consolidated ex- port cargoes called Uebersee-Zentrum. The area to the west of the Kohlbrand includes, primarily, the free trade zone's petroleum stor- age area and extensive container terminal facilities. Numerous warehouses with a total storage area of approximately 6.5 million square feet are located in the zone. It also contains 74 transit sheds with approximately 8.2 million square feet of area. Special facilities are avail- able for the handling of grain, petroleum prod- ucts, tropical fruit, raw tobacco, coffee, fish, edible oils, timber, coal and a variety of other products. The facilities for storing, exhibiting, sam- pling, packaging, etc., are maintained by pri- vate firms in warehouses which they own or lease. Space permitting, new facilities may be constructed on land leased from Land Hamburg (State of Hamburg), subject to the approval of the zone's administering authority. Many of the transit sheds and some warehouses of the free trade zone are operated by a city-owned ware- housing company, Hamburger Hafen-und Lagerhaus A.G. (Hamburg Port and Ware- house Company), which may sublet space to private firms. Administering Authority The Hamburg free trade zone is owned and administered by Land Hamburg, which leases plots of land to private operators. Administra- tive responsibilities are divided among several government offices. They include the Hafenbe- triebsdirektion (Port Administration), which is responsible for basic policy matters and overall harbor management; the Oberhafenamt (Port Supervision), which controls traffic in the har- bor and on the Elbe and allocates berthing space; Strom-und Hafenbau (Waterway and Port Construction), which plans, constructs and maintains installations in the harbor and on the Elbe River; Freihafenamt (Free Port Author- ity), which enforces federal customs regula- tions, and other regulations, in the free trade zone and approves the leasing or construction of facilities; and Zolltechnische Pruefungs-und Lehranstalt (Customs Technical Testing and Training Institute), a local division of the Min- istry of Finance, which gives official customs information for the free port. Among these agencies, the Freihafenamt (Free Port Author- ity) acts in the capacity of administering au- thority for most free port functions. Mailing Address : Freihafenamt 2 Hamburg 11, Bei St. Annen 2 Federal Republic of Germany 39 Hafenbetriebsdirektion 2 Hamburg 11, Alter Stein weg 4 Federal Republic of Germany Zolltechnische Pruefungs-und Lehranstalt 2 Hamburg-Altona Zeiseweg 9 Federal Republic of Germany Specific inquiries concerning the availability and leasing of free trade zone facilities may be directed to: Hamburger Hafen-und Lagerhaus A.G. ( Hamburg Port and Warehouse Company) 2 Hamburg 11, Bei St. Annen 1 Federal Republic of Germany Verein Hamburger Lagerhalter e.V. ( Hamburg Warehouse Operator's Association) 2 Hamburg 11, Mattentwiete 2 Federal Republic of Germany Specific inquiries concerning the availability and leasing of free trade zone real estate may be directed to: Finanzbehoerde, Freie und Hansestadt Hamburg (Office of Finance, Free Port of Hamburg) 2 Hamburg 36 Gaensemarkt 36 Federal Republic of Germany Free Trade Zone at Kiel Location Kiel is a seaport located on the southeastern coast of the Jutland peninsula facing the Baltic Sea. It is also the eastern terminus of the Kiel Canal, which links the North and Baltic Seas. The city of Kiei is the capital of Land (the State of) Schlesivig Holstein, an area of 6,046 square miles. About 270,000 of the State's 2.5 million residents live in Kiel. Industries in and near Kiel include shipbuilding and metalwork- ing. International transportation to and from Kiel is performed by numerous German and foreign- flag shipping companies. Inland connections with all points in Germany and some adjacent areas are available by road, rail and inland wa- terway transport. The nearest international air- port is at Hamburg, some 56 miles to the southwest. The Kiel free trade zone was established in 1922. It is situated at the southeastern entrance to the Kiel Canal. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Bremen. The primary activities actually carried on in the zone are storage and the supply of goods to ships passing through the canal. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Bremen. Facilities Available The free trade zone has an area of about 42 acres. It contains several warehouses owned by ship chandlering firms. No facilities are pres- ently available in the zone for manufacturing or processing of goods. Administering Authority The Kiel free trade zone is administered by Wasser-und Schiffahrtsdirektion (Waterways and Shipping Administration), an agency of the City of Kiel. Customs supervision is exer- cised by a Federal Customs Office at Kiel. Mailing Address: Wasser-und Schiffahrtsdirektion 2300 Kiel-Wik Federal Republic of Germany 40 Gibraltar Gibraltar is a free port. Gibraltar, a British colony approximately 214 square miles in area, is situated on a rocky promontory commanding the western en- trance to the Mediterranean Sea. It is bound- ed by Spain on the north and is connected with the adjacent Spanish mainland by a road over a one-mile isthmus. On the west it is bounded by a body of water variously known as the Bay of Gibraltar or the Bay of Algeciras, on the east by the Mediterranean Sea and on the south by the Strait of Gibraltar. Gibraltar, which lies about 20 miles north of the African (Mo- roccan) coast, is linked with the port of Tan- gier by scheduled passenger sea ferry and air service across the Strait. Owing to its strategic location at the cross- roads of trade routes between the Atlantic and Mediterranean, Gibraltar functions as an important shipping center and transfer point for commerce. It is also the site of a British naval base. The port of Gibraltar, which has bunkering, provisioning and ship repair ser- vices, receives over 3,000 merchant vessels an- nually as well as numerous small craft, private yachts and NATO naval vessels. Gibraltar is also served by an international airport. Activities related to shipping and trade are the main components of Gibraltar's economy, although in recent years tourism has also be- come an important factor. The colony has a resident population estimated at 25,000. Its work force, however, is supplemented by an in- flux of daily or temporary workers from Spain and Morocco. Authorized Operations Gibraltar may be considered a free port in that its customs duties are nominal and levied only for revenue and not for protective pur- poses. In addition to goods for members of the Diplomatic Corps and NATO, only foodstuffs, pharmaceuticals and medical supplies, lubricat- ing oil, newsprint and publications are com- pletely free of customs duties when imported for consumption in Gibraltar. Most other non- luxury goods are assessed customs duty at a rate of 5 percent ad valorem. Slightly higher duty rates are applied on imports of luxury goods and consumer items such as alcoholic beverages, tobacco, perfumes, gasoline, motor vehicles and certain mechanical and electrical appliances. In general, goods in transit through Gibral- tar or intended for subsequent reexport are accorded exemption from payment of customs duties. There are three principal procedures through which such exemption may be ob- tained: storing the goods in a reserved area known as "Government Stores," furnishing proof that the goods are in transit, or import- ing the goods under bond for eventual reexport. In addition, drawback procedures make possi- ble the refund of duties, or a portion of the duties, upon certain duty-paid goods subse- quently reexported from Gibraltar. Government Stores is a government-operat- ed reserved warehouse area in which dutiable goods may be stored without payment of cus- toms duties pending reexport or entry into the customs territory of Gibraltar. The stated max- imum storage time in this area is three months, though this period is normally extended. Al- though processing may be permitted, the small size of the area tends to limit such activities. Goods in transit through Gibraltar — other than alcoholic beverages, gasoline, perfumes, tobacco (except cigarettes), mechanical light- ers, cameras, motion picture projectors, and razor blades, which must either be warehoused in Government Stores or imported under bond if they are to obtain exemption from duty — may qualify for "relief from duty" when it is proved that the introduction of the goods into Gibraltar is only a portion of a journey begin- ning and ending at different points outside Gi- braltar and the final destination of the goods has been identified by the consignor before the goods arrive in Gibraltar. Unless otherwise au- thorized, transit goods qualifying for "relief from duty" must be removed from Gibraltar within a 14-day period. These duty-exemption procedures for transit and reexport goods notwithstanding, Gibraltar imposes an export duty on fuel, diesel and gas oil (including bunkers) of 1 shilling/4 pence ($0.16) per ton. 41 Goods entering Gibraltar may be trans- formed, assembled, stored, mixed, blended, re- packed, manufactured or offered for sale. Restrictions and Controls The importation of arms, ammunition, nar- cotics and similar goods is restricted or pro- hibited. Import licenses are required for the importation of sugar, flour, frozen meat, canned milk, edible oils and fats in order to ensure that importers maintain reserve stocks of these commodities, and also for potatoes, gems, gold and gold manufactures, and gaso- line. An export license is required for most com- mercial exports from Gibraltar. Foreign firms wishing to engage in the sale of goods from Gibraltar to other countries must obtain an Ex- porter's License from the Financial Secretary. The unpacking and repacking of goods in Gov- ernment Stores may be carried on only with the written permission of the administering authority. Facilities Available Government Stores covers about 120,000 square feet, all of which is covered space. In- dividual firms may rent small private bonded stores within this area for their operations. Other facilities in Gibraltar are privately owned and operated. Detailed information about the amounts of open and covered space is not available. Administering Authority The free port of Gibraltar and the Govern- ment Stores are administered by the Financial Secretary, Government of Gibraltar. Mailing Address: Free Port & Government Stores: Financial Secretary Government of Gibraltar Gibraltar Other Sources of Information: The Gibraltar Shipping Association Gibraltar Gibraltar Chamber of Commerce Gibraltar Greece Greece has two free trade zones. They are located at Piraeus and Thessa- loniki. There is also a transit zone (for Yugoslavia) at Thessaloniki. The Kingdom of Greece is made up of the southernmost part of the Balkan peninsula and numerous islands. It is bounded on the north by Albania, Yugoslavia and Bulgaria; on the east by Turkey and the Aegean Sea; on the west by the Ionian Sea; and on the south by the Medi- terranean Sea. In all, Greece has a land area of 50,942 square miles and a population of about 8.7 million. Greece's economy is predominantly agricul- tural, but has a growing industrial sector. Its trade policies emphasize export expansion and the realization of opportunities connected with participation in the European Economic Com- munity (EEC or "Common Market") of which it is presently an associate member. Greece is signatory to the General Agreement on Tariffs and Trade (GATT). Shipping to and from Greece is provided by many Greek and foreign-flag carriers serving some ten major seaports. The Greek merchant fleet ranks seventh in the world in tonnage. Greece also has seven international airports served by many international airlines. Domestic transport is by coastal shipping, road, and rail. Coastal shipping is heavily used in domestic transportation. There are approximately 1,700 miles of railroad track with main lines linking the Athens-Piraeus area to the southern city of Kalamata in the Peloponnesus and to Thes- saloniki in northern Greece. Branches of the northern line extend to the Yugoslav, Bulgarian and Turkish borders, connecting with the rail systems of the two former countries, but not with that of Turkey. There are about 27,500 miles of roads in the country of which about 7,400 miles are hard-surfaced. Free Trade Zone at Piraeus Location Piraeus is a port city on the Saronic Gulf, an arm of the Aegean Sea. It is situated about 6 42 miles west of Athens, the capital, largest city and financial and commercial center of Greece. The Athens-Piraeus area also contains the country's principal industrial concentration. Its industries include shipbuilding and repairing, oil refining, textiles, food processing, cigarette manufacturing, steel and metal works, fertil- izers, chemicals and pharmaceuticals. The re- gion has a population of about 2 million of whom more than 450,000 live in Piraeus. Affording access to the Athens area, Piraeus is the most important passenger and commer- cial port in Greece. About 60 percent of the country's shipping volume passes through the port. More than 21,000 vessels representing numerous Greek and foreign-flag lines call at Piraeus annually. International air traffic is handled at the Athens airport located some seven miles east of Piraeus and served by num- erous international airlines. There is regular, frequent public transport service by rail and road between Piraeus and Athens. Two rail lines link the port with Athens and other points via Athens. Highway transportation is also available. The free trade zone at Piraeus is situated in the main harbor area. It was established in 1932. The zone's operations are governed by Article 5 of Basic Law E. L. 1559 of 1950 "On the Port of Piraeus Authority," as amended. This law also prescribes the organization and functions of the Port of Piraeus Authority which has responsibility for overall port opera- tions as well as the administration of the free trade zone. Authorized Operations Goods of foreign origin may be brought into the free trade zone without payment of customs duties or other taxes and remain free of all duties and taxes while held in the zone or if subsequently transshipped or reexported abroad. Similarly, documents pertaining to the receipt, storage or transfer of goods within the zone are free of stamp taxes. Customs duties and taxes become payable, however, if the goods are consumed within the zone or removed from the zone for consumption in Greece. Goods destroyed in the zone are not subject to duties. Goods of Greek origin may be allowed into the free trade zone under special permit from the administering authority. Transit goods may be held in the zone pend- ing transshipment free of bond. Goods intended for consumption in Greece either in their ori- ginal state or after processing in the zone, and goods held in the zone for processing pending reexport must be placed under bond. Goods in bond may be stored for an unlimited period of time, sampled, reclassified, packed, repacked, processed, cleaned, graded and sorted. Standing regulations also permit manufac- turing in the zone with the permission of the administering authority and subject to specific authorization by the Ministries of Merchant Marine and Finance. Manufacturing enterprises in the zone are eligible for duty-free entry priv- ileges for raw materials and other commodities intended for processing and reexport. Ship chandlering and minor repairs involving the sale or use of goods and materials on which customs duties have not been paid are permit- ted within the zone. Sales and auctions of mer- chandise may also take place within the zone. Restrictions and Controls Explosive, inflammable, poisonous or other- wise dangerous goods are prohibited entry into the free trade zone. Entry and storage of other goods may be prohibited or restricted, including goods subject to Greek Government monopoly (e.g., cigarette paper, matches, playing cards, saccharin, salt, kerosene, and denatured alco- hol), and items subject to high rates of customs duty (e.g., watches, jewels, etc.). The approval of the customs authorities is required before goods intended for consumption in Greece can be processed in the zone. Facilities Available The free trade zone has approximately 3.5 million square feet of open storage space and approximately 1.2 million square feet of covered storage space. Storage facilities include transit sheds which are intended for the temporary landing of goods pending transshipment, bonded warehouses for long-term storage and processing operations, and a grain elevator with a storage capacity of 42,000 tons. 43 Administering Authority The free trade zone at Piraeus is adminis- tered by the Piraeus Port Authority (OLP), an autonomous legal entity supervised by the Min- istry of Merchant Marine. Mailing Address: The Piraeus Port Authority (OLP) Directorate of Free Trade Zone 2 II Merarchias Street Piraeus, Greece. Free Trade Zone at Thessaloniki Location Thessaloniki is a port city in the Macedonian district of northern Greece situated at the in- nermost part of the Gulf of Salonika (Therma- ikos), an arm of the Aegean Sea. Thessaloniki is the second-largest port, industrial area and population center in the country. Its industries include a major oil refinery-petrochemical-am- monia complex, a steel plant and agricultural processing enterprises. The population of the city numbers about 380,000, with an additional 200,000 people in outlying areas. Thessaloniki is the port nearest the Mediter- ranean trade routes for the central Balkan area. Its hinterland therefore includes not only sur- rounding Greek territory, but also parts of Yugoslavia and Bulgaria. More than 1,200 ships arrive in the port annually from foreign ports, with numerous Greek and foreign-flag carriers represented. The city has an international air- port. Thessaloniki is linked with the Athens- Piraeus area and other parts of Greece by rail and road. It is also an important coastal ship- ping port. Rail and road routes extend north from the port to link with the Yugoslav and Bulgarian systems. The Thessaloniki free trade zone, called the "Free Zone of Thessaloniki," incorporates the greater part of the land area of the port. It was established in 1925. Free trade zone operations are governed by Law 2551 of 1953. Authorized Operations The customs treatment of goods brought into the zone is the same as that at Piraeus. As at Piraeus, goods intended for eventual entry into Greek customs territory either in their original state or after processing, or those intended for processing prior to reexport abroad, must be placed under bond. See section under this head- ing in the summary of the free trade zone at Piraeus. The zone may be used for storing, sampling, mixing, exhibiting, blending, repacking, as- sembling and manufacturing of goods held in bond. There is no limit on the amount of time during which goods may be held in storage in the zone. Industries established within the zone must be approved by the administering authority and the Ministry of Industry. Such enterprises be- come eligible for the duty-free importation of raw materials, components and equipment. They may use wholly foreign or mixed foreign and domestic raw materials and components and their products may be exported without restriction. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Piraeus. Facilities Available The total area of the zone is more than 7 million square feet. Open storage space amounts to about 1.8 million square feet, while covered storage space amounts to about 500,000 square feet. Storage facilities include a number of warehouses, transit sheds, a grain elevator of 20,000 tons storage capacity and cold stores with total capacity of 81,200 cubic feet. The administering authority performs trans- portation and cargo handling operations in the zone. Administering Authority The free trade zone at Thessaloniki is admin- istered by the Organization of the Free Zone and Port of Thessaloniki, an autonomous legal entity under the supervision of the Ministry of Merchant Marine. 44 Mailing Address : The Organization of the Free Zone and Port of Thessaloniki Free Zone and Port of Thessaloniki Thessaloniki, Greece Transit Zone (for Yugoslavia) at Thessaloniki A transit zone for the temporary storage of goods in transit to or from Yugoslavia was established in the port of Thessaloniki in 1929. The agreement between Greece and Yugoslavia provided that the zone was to operate for a period of 50 years. The facility, called the "Yugoslav Free Zone of Thessaloniki," consists of a separate area of about 800,000 square feet in the port of Thes- saloniki. It may be used only for the temporary storage and any necessary repacking of goods originating in Yugoslavia or destined for Yugo- slavia. For customs purposes, the zone is under Yugoslav rather than Greek jurisdiction. Greek customs duties are not levied on ship- ments entering the zone, and inland movement of cargoes between the zone and Yugoslavia is carried out under customs seal. The transit zone has its own administration, the Direction of the Yugoslav Free Zone of Thessaloniki, an agency of the Yugoslav Minis- try of Trade. Mailing Address: Direction of the Yugoslav Free Zone of Thessaloniki Thessaloniki, Greece. Ireland Ireland has a free trade zone at Shannon International Free Airport. The Republic of Ireland has a land area of about 27,000 square miles and a population of about 2.9 million. It is bordered on the east by the Irish Sea and St. George's Channel, on the south and west by the Atlantic Ocean, and on the north by Northern Ireland and the Atlantic Ocean. Although agriculture is still of major impor- tance in the Irish economy, it now ranks second to industry as a source of national income. Government policies foster industrial develop- ment and expansion. Foreign trade also plays a significant role in the economy. Ireland is party to a reciprocal free trade agreement with the United Kingdom, its principal supplier and customer. It is also signatory to the General Agreement on Tariffs and Trade (GATT). Ireland has ten major seaports and two inter- national airports. Numerous international mari- time and air carriers link the country with ports and airports in the United Kingdom, Western Europe and the United States as well as with other areas. Inland transportation is provided by road and rail. There are about 1,455 miles of railroad track and almost 10,000 miles of pri- mary roads interconnecting the country's pop- ulation centers. The free trade zone at Shannon International Free Airport was established pursuant to en- actment of the Customs Free Airport Act of 1947. Its operations are governed by that basic legislation, as amended by the Customs Free Airport (Amendment) Act of 1958, and the Finance (Miscellaneous Provisions) Act of 1958. Free Trade Zone at Shannon International Free Airport Location Shannon International Free Airport is situ- ated on the northern shore of the estuary of the River Shannon in southwestern Ireland (County Clare). It is positioned directly on the main transatlantic air routes and is regularly served by 14 international air carriers. Deliv- eries of air cargo from Shannon to principal cities in Europe and North America can be made within a matter of hours. The airport also has convenient access by road and rail to ports on maritime trade routes. It is about 15 miles by road to the nearest seaport, Limerick ; 130 miles to Dublin, the country's leading port, commercial center and capital ; and 80 miles to the port of Cork. Regular shipping services are available between these ports and ports in the United Kingdom, the European continent, and North America. The area surrounding the airport is predom- inantly rural. Ennis, about 10 miles away and 45 with a population of about 6,000, is the nearest town, while Limerick with a population of about 60,000 is the nearest city. Tourist development and airport-free trade zone operations account for much of the area's economic activity. The entire area of Shannon International Free Airport is a free trade zone. It includes tracts for industrial and warehouse purposes, as well as airport facilities. Authorized Operations Goods of foreign origin, including machinery and equipment for the handling or processing of goods in the free trade zone, may be brought into Shannon International Free Airport with- out payment of Irish customs duties or taxes and without the application of import licensing controls. Foreign goods remain free of Irish duties and restrictions while held in the zone, or if subsequently transshipped or reexported abroad. Such imports and exports may be con- veyed to and from the zone directly by air, or by surface transportation. The transfer of cus- toms-privileged goods overland between Irish seaports and Shannon must take place un- der customs bond. Goods of Irish origin may also be brought into the free trade zone, and upon entry may become eligible for treatment as exports, i.e., for payment of drawback, ex- cise refunds and allowances. There is no time limit during which customs-privileged goods may be held in the zone. If goods of foreign origin are removed from the zone for consumption in Ireland without having undergone any processing in the zone, Irish customs duties and taxes become payable at the rates applicable to like goods imported directly from abroad. However, special pro- vision is made for goods "produced, manufac- tured, processed or packaged" in the zone for home consumption. Such imports can qualify for duty assessment on only the foreign in- gredients actually contained in the final prod- uct, if the producer maintains records in sup- port of this method of assessment and if the foreign ingredients used are not subject to import restrictions. Where ingredients are of undetermined origin or are subject to import restrictions, imports into the Irish market become liable for payment of duty at the rates applicable to like (finished) goods imported directly from abroad. Goods brought into the free trade zone may be stored temporarily or undergo any type of processing or transformation. Operations au- thorized include storage, manufacturing, com- bining with locally produced goods, unpacking, breaking from bulk, cleaning, refining, purify- ing, marking, grading, blending, assembling, altering, labeling, packaging, consolidation, handling and exhibiting. International business activities which do not directly involve the han- dling or manufacture of merchandise may also be permitted in the free trade zone. Such busi- nesses include sales administration, accounting operations, consulting services, mail order houses, financial institutions, etc. The chief cri- terion for their admission to the zone is that they contribute to the use or development of the airport. Substantial financial incentives have also been made available to firms using the free trade zone. Generally, companies operating in the zone may qualify for exemption from Irish income tax and corporation profits tax on all profits arising from exports, except those to Great Britain and Northern Ireland. This tax holiday extends until 1983, and provision has been made for accelerated depreciation allow- ances when tax liability arises. Firms operat- ing in the zone may also qualify for partial exemption from local taxes on real property. There are no restrictions on the repatriation of profits or capital abroad. In addition, firms un- dertaking manufacturing operations of special benefit to the airport in terms of employment of labor and generation of air freight may qualify for non-repayable cash grants of up to 50 percent of the cost of equipment and up to 100 percent of the cost of training workers. Traders wishing to use the facilities of the free trade zone may either establish their own operations, or engage the services of ware- housing companies, freight forwarders, etc., al- ready operating in the zone, to act in their be- half. The administering authority does not un- dertake such operations itself, but will refer potential users of the zone to established com- panies offering the desired services. Restrictions and Controls Before any trade, business or manufacturing activity can be undertaken in the free trade 46 zone, it is necessary for the principals to obtain a license specifying the authorized activity from the Ministry of Industry and Commerce. At the request of the licensee, such a license may be amended by the Ministry to cover ad- ditional operations. To qualify for the tax ex- emptions described in the preceding section, firms operating in the zone must obtain certi- fication from the Ministry of Finance that they are engaged in "exempted trade opera- tions," i.e., export sales, services or related activities. Firms operating in the free trade zone are required to maintain inventory records and other records for 2 years. These records are subject to examination by customs and excise officials. Dutiable goods brought into the free trade zone are required to be stored in ap- proved premises pending their use in manu- facturing or other disposition. Goods not normally permitted entry into Ire- land, e.g., narcotics and arms, may not be brought into the free trade zone. The special restrictions and controls which apply to im- ports of animals, plants, drugs, etc. into other parts of Ireland also apply in the free trade zone. made for the installation of air-conditioning, refrigeration or other equipment. An area of more than 300 acres has been set aside for manufacturing operations in the free trade zone. Factory buildings may be leased or purchased from the administering authority. The manufacturing units take the form of standard factory bays of 18,750 square feet and can be made available in single or multiple units. As these units are not usually construct- ed until the user's requirements are known, ar- rangements can be made for modification or for the installation of special facilities. Options can be obtained on adjoining sites to allow for future expansion. Leases for warehouse or factory buildings may be arranged for periods ranging from 3 to 25 years, subject to renewal, and options exer- cisable within 5 years to purchase the buildings can be negotiated. If a firm wishes to erect its own buildings, land can be leased for a period of 99 years from the administering authority. In addition to warehouses and factories, the free trade zone contains display facilities and office accommodations. Further information may be obtained from the administering au- thority. Facilities Available Open storage area in the free trade zone amounts to 110,000 square feet. The use of this space may be arranged directly with the ad- ministering authority. Covered storage space is maintained by private firms rather than by the administering authority. Public warehouses are operated by several independent warehousing companies and freight forwarders. These firms can provide storage, packing, forwarding and related ser- vices for foreign exporters. Further informa- tion on their facilities, services and charges can be obtained from the administering authority. Firms wishing to operate their own facilities for storage and related operations may arrange to lease or purchase warehouse buildings from the administering authority. These buildings take the form of standard units of 3,750 square feet each and can be made available in single or multiple units. Heating equipment, electric power, water and sewerage are provided with each unit, and special arrangements can be Administering Authority Shannon International Free Airport is owned by the Ministry for Transport and Pow- er, and its aviation facilities are managed and controlled directly by the Ministry. The free trade zone facilities at the airport are man- aged by the Shannon Free Airport Develop- ment Company, Ltd. The Company is owned and controlled by the Government of Ireland. It was established in 1959 to promote the estab- lishment of commercial and industrial enter- prises at the airport by providing facilities and financial incentives for firms operating in the zone. Mailing Address: Shannon Free Airport Development Co. 590 Fifth Avenue New York, N. Y. 10036 The Development Manager Shannon Free Airport Development Co., Ltd. 47 Shannon International Free Airport Ireland The Secretary Department of Industry and Commerce Kildare Street Dublin, Ireland Italy Italy has two free trade zones, located at Trieste and Venice. More limited customs-privileged facilities have been established in other major ports and cities having customs inspection offices. The Republic of Italy, including the princi- pal islands of Sicily and Sardinia, covers a land area of about 117,000 square miles and has a population of about 54 million. Continental Italy is a long boot-shaped peninsula which ex- tends approximately 725 miies from the Alps in the northwest to the Mediterranean Sea in the southeast. In the north, continental Italy is bordered by France, Switzerland, Austria and Yugoslavia. Its peninsular coastline of nearly 2,600 miles borders the Adriatic Sea on the northeast, the Ionian Sea on the south, the Tyrrhenian Sea on the west and the Ligurian Sea on the north. The islands of Sicily and Sar- dinia are situated in the Mediterranean Sea with Sicily located off the toe of the Italian boot and Sardinia about 200 miles to the north- west of Sicily. Italy has a diversified economy with strong industrial and agricultural sectors. It is a mem- ber of the European Economic Community (EEC or "Common Market"), and is signatory to the General Agreement on Tariffs and Trade (GATT). Italy's transportation network is well devel- oped. Its lengthy coastline has made possible the development of a number, of maritime ports, which for the most part serve the regions in which they are located. These ports are served by numerous Italian and foreign-flag carriers. Similarly, Italy has a number of air- ports regularly served by about 30 internation- al air carriers. The airports at Rome and Mi- lan, however, handle the bulk of international traffic. Internal traffic is carried by rail, high- ways and coastal shipping. Italy has some 13,- 000 miles of railroads and an extensive road system, including expressways on the most heavily travelled intercity routes. Its roads and railroads interconnect all production and distri- bution centers and link with the systems of neighboring countries. Each of the Italian free trade zones has been established by special legislation. The provi- sions of these laws do not, however, differ sig- nificantly. All zones are supervised nationally by the Ministero delle Finanze (Ministry of Finance) . Free Trade Zone at Trieste Location Trieste is a city and port located in north- eastern Italy near the Italian- Yugoslav border. It faces on the Gulf of Trieste, an inlet at the head of the Adriatic Sea. Formerly the princi- pal port and commercial center of the Austro- Hungarian Empire, Trieste was transferred from Austrian to Italian jurisdiction at the end of the First World War and since that time has been politically separated from its central Eu- ropean hinterland. Although on a reduced scale, the port has continued to serve that area pri- marily, and much of the traffic it handles is in transit to or from Austria and Czechoslovakia. The population of Trieste is estimated at 300,000. The traditional economic activities of shipping, freight forwarding, banking and in- surance continue, and there has been some in- dustrial development in recent years. Indus- tries located in and near Trieste include two oil refineries, an iron works, a ship repair yard, a cotton mill, a paper mill, a cement plant, shoe and paint factories, distilleries and a brewery. The port is served by numerous Italian and foreign-flag ocean carriers which offer more than 1,500 sailings annually. There is an air- port located about 18 miles northeast of Tri- este; however, it is primarily a local facility. The port is linked by road and rail with points in Italy and Yugoslavia and through them with Austria and other countries. A large oil pipe- line from Trieste to Ingolstadt, Federal Repub- 48 lie of Germany, has recently entered into oper- ation. Trieste has a long tradition as a customs- privileged port. The entire city had free port status prior to 1886 when the free trade zone system was adopted. At present the free trade zone is made up of four non-contiguous areas of the port which are linked by rail. The legal basis for their operation is Decree No. 29 of January 19, 1955. firearms and their parts, jewelry and other pre- cious objects, canes and umbrellas, clothing and furs, alkaloids and their salts (including nar- cotic drugs), synthetic medicinal preparations and patent medicines, and any portable item or merchandise which can easily be concealed. Retail sale is prohibited in the free trade zone. Sales of ship supplies are governed by special regulations. Authorized Operations Goods of foreign origin may be brought into the free trade zone without payment of Italian customs duties and remain free of all such du- ties while held in the zone or if subsequently transshipped or reexported. Italian customs duties become payable, however, if foreign goods are used or consumed in the zone, or re- moved from it for consumption or use in other parts of Italy. Goods of Italian origin or "na- tionalized" goods, i.e., goods of foreign origin on which Italian customs duties have been paid, may also be brought into the free trade zone. Upon introduction, such goods are con- sidered exports unless action is taken to main- tain their Italian nationality. Operations authorized in the free trade zone include loading, unloading, transshipping, mix- ing, warehousing and cargo handling. Mer- chandise brought into the free trade zone may be freely processed, negotiated, transferred, or sold at wholesale. The establishment of indus- trial plants within the zone, however, requires authorization from the Ministry of Finance. Restrictions and Controls As noted above, Italian customs duties must be paid on foreign goods which are consumed or used within the free trade zone. Foreign building materials, capital goods (machinery and equipment), office furnishings and supplies to be used within the zone are specifically in- cluded among the goods liable to payment of duties. Special controls apply to the following items: goods subject to Italian State Monopoly (tobac- co and tobacco products, salt, quinine, etc.), saccharin and saccharin preparations, portable Facilities Available The Trieste free trade, zone is made up of four separate areas referred to collectively as punti jranchi (free zones). All are served by rail lines. They are as follows: Punti Franchi Vecchio e Nuovo (Old and New Free Zones). This facility consists of two major portions of the main commercial port area and contains a number of warehouses. It has a total area of 5.8 million square feet of which 5.1 million square feet are covered. Punto Franco Scalo Legnami di Servola (Free Lumber Zone of Servola). This zone is located to the southeast of the main port area and has facilities for the storage, processing and shipment of lumber. It has a total area of more than 1 million square feet, of which about 640,000 square feet are covered space and about 57,000 square feet are available for open stor- age. Punto Franco Oli Minerali di S. Sabba (Free Oil Zone of San Sabba). This area is located to the southeast of the Free Lumber Zone. It is used primarily for storage of mineral oils and their derivatives, and occupied by oil companies operating coastal depots on a concession basis. Punto Franco Industrials di Zaule (Zaule In- dustrial Free Zone). The industrial free zone is a portion of a larger industrial development area called the Trieste Industrial Port. It is lo- cated to the southeast of the other free zone areas. Its area amounts to some 3.1 million square feet of which about 960,000 square feet remain available for new industrial operations. Most of the firms engaged in processing or in manufacturing in the free trade zone are situ- ated in this area. Warehouse space within the free trade zone is leased to private firms by the Magazzini Generali di Trieste (see the following). 49 Administering Authority The four free trade zone areas are admin- istered by separate agencies. The Panti F ran- ch i Vecchio e Nuovo are administered by the Magazzine Generali di Trieste (Public Ware- house Authority of Trieste). The Magazzini Generali is a semi-public corporation author- ized to operate and maintain the facilities of specified harbor areas. It is a non-profit cor- poration, the shares of which are held by pub- lic, semi-public and trade organizations. It is managed by a board of directors composed in part of representatives nominated by trade as- sociations directly concerned with activities of the port. The Panto Franco Industrials di Zaule is ad- ministered by the Ente del Porto Industriale di Trieste (Trieste Industrial Port Authori- ty); the Punto Franco Scalo Legnami di Ser- vola is administered by the Railway Adminis- tration; and the Punto Franco Oli Minerali di S. Sabba is managed by the Trieste Port Captaincy. Mailing Address: Magazzini Generali di Trieste Punto Franco Vecchio Trieste, Italy Ente del Porto Industriale di Trieste Via S. e G. Caboto, 14 Trieste, Italy Ministero delle Finanze Direzione Generale delle Dogane Viale America Roma, Italy Free Trade Zone at Venice Location Venice is a city and seaport in northern Italy near the head of the Adriatic Sea. Its center is made up of the islands of the Lagoon of Venice, an inlet of the Gulf of Venice which opens into the Adriatic Sea on the east. It also has a main- land industrial area called Mestre-Marghera, which is connected with the islands by means of rail and highway bridges. In all the city has a population of about 350,000. Well known as a center of tourism and resort activity, Venice is an important industrial cen- ter and one of Italy's major seaports. Its indus- tries include shipbuilding, iron and steel works, textiles and chemicals as well as traditional artisan work such as glass-blowing, leather- working, etc. In addition, Venice functions as the primary Adriatic port for maritime traffic bound to and from other northern Italian indus- trial centers. It has railroad and highway con- nections with all points in Italy and adjoining countries. Venice also has an international airport. The free trade zone at Venice operates under the authorization of Legislative Decree No. 268, of January 1, 1948. It is situated in the main port area of the Lagoon. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Trieste. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Trieste. Facilities Available The free trade zone has an area of about 280,000 square feet of which some 231,000 square feet are covered. There are eight ware- houses for the storage of general merchandise, three for the storage of maritime supplies, and four for varied operations including the storage and processing of wine, mineral oil and coffee. These warehouses have a total capacity of more than 3.1 million cubic feet. In addition, there is a refrigerating plant with a storage capacity of 80,000 cubic feet. Administering Authority The free trade zone at Venice is administered by the Provveditorato del Porto di Venezia (Venice Port Authority), under the general su- pervision of the Ministry of Finance. Mailing Address: Provveditorato del Porto di Venezia 1401 Zattere Venezia, Italy 50 Ministero delle Finanze Direzione Generale delle Dogane Viale America Roma, Italy Other Customs-Privileged Facilities In addition to free trade zones, Italy has two types of special customs-privileged facilities, Magazzini Generali (General Warehouses), and Depositi Franchi (Free Depots). The Magazzini Generali are similar to the bonded warehouses of the United States. For- eign goods may be stored, sampled, selected, packed, repacked, mixed and handled in these warehouses without payment of Italian customs duties, provided that no operation changes the dutiable status of the goods. Duties and taxes become payable only when merchandise is re- moved from the warehouse for consumption in Italy. The general warehouse system is extensive, with facilities located in the many Italian cities that have customs offices. More than 800 gen- eral warehouses are in operation with some 20 percent being principal warehouses and the re- mainder branches. General warehouses may be operated by cooperatives, companies or individ- ual persons, pursuant to authorization by spec- ial Ministerial decree. Further information may be obtained from: Ministero dell' Industria, del Commercio e dell' Artigianato (Ministry of Industry and Commerce) Via Vittorio Veneto 33 Roma, Italy The Depositi Franchi offer more limited fa- cilities than the Magazzini Generali. In the depots, located only in ports, foreign goods may be stored, unpacked and repacked without pay- ment of customs duties; no processing is per- mitted. The free depots operate under author- ization in the form of Presidential Decrees. At present there are ten free depots located in the following ports: Bari — Located on the southeast Italian coast, Bari handles Adriatic and Near Eastern traffic primarily. It has one free depot. Genoa — Genoa is Italy's leading port, func- tioning as the major outlet for the industrial areas of the northwest. It is situated on the coast of the Ligurian Sea, and has two free depots. Imperia — Imperia is a Ligurian seaport, located west of Genoa. It has one free depot- Leghorn — Leghorn on Italy's west coast functions as an outlet for the north-central Italian cities of Bologna, Florence, etc. It has one free depot. Naples — Naples is Italy's second ranking port. Located on the west coast, it serves, pri- marily the central and southern areas of the country. It has four free depots. Palermo — Palermo is the principal port of Sicily. It has one free depot. The Netherlands The Netherlands has special facilities — liberal customs practices and an ex- tensive system of bonded warehouses — which afford many of the privi- leges and facilities offered by free trade zones and free ports elsewhere in the world. The Kingdom of the Netherlands is bounded on the north and west by the North Sea, on the east by the Federal Republic of Germany, and on the south by Belgium. It is watered by the Rhine, Meuse and Scheldt Rivers, extending inland into Germany, France and Belgium, re- spectively. In all, the Netherlands has a land area of about 13,000 square miles, and a pop- ulation of 12.7 million. The Netherlands economy is predominantly industrial, and heavily dependent upon imports for most raw materials. About 30 percent of the industrial output, however, is exported. The Netherlands is a member of the Benelux Eco- nomic Union, the European Economic Com- munity (EEC or "Common Market"), and the General Agreement on Tariffs and Trade (GATT). The transportation network of the Nether- lands is highly developed. Its railroad system is made up of about 2,000 miles of track which link all major points in the country, and inter- connect with neighboring countries. The road network totals about 22,000 miles including inter-city four-lane highways. Inland water- 51 ways in the Netherlands consist of 3,573 miles of navigable rivers and canals, and are of sub- stantial importance both in domestic and tran- sit trade. The ports of Rotterdam and Amster- dam can carry commercial traffic on the Rhine to Basel, Switzerland and as far as Bamberg, Germany on the Main River. Connections with Danube and Black Sea shipping will be possible in 1981 with the completion of the Rhine-Main- Danube Canal System. International commerce is handled primarily by two major maritime ports, Rotterdam and Amsterdam. Rotterdam, the most active port on the European continent, is served by more than 30,000 ships annually. Almost one-third of the total traffic handled by Rotterdam is transit trade. Europoort, an extension of the port of Rotterdam, contains industrial sites, and stor- age facilities for petroleum, coal and ores and is accessible to ships of up to 200,000 tons. Amsterdam, the second-largest port, is also the commercial center of the Netherlands. It is ser- ved by about 9,000 ships annually, but handles only about 15 percent of the tonnage handled by Rotterdam. Transit trade is also important in Amsterdam, accounting for about 45 percent of the traffic. International air traffic is handled primarily at Schiphol Airport near Amsterdam. Royal Dutch Airlines (KLM), serving some 68 coun- tries, is based at Schiphol, which is also served by 20 foreign air carriers. Rotterdam also has an international airport which provides facili- ties for short-distance traffic. Although bonded warehouses for the storage or processing of goods may be established at many points in the Netherlands, most facilities are concentrated in Rotterdam, Amsterdam and at Schiphol Airport. Authorized Operations The Netherlands has no free trade zones or free ports as such, but its liberal customs prac- tices and extensive and flexible system of bonded warehouses and customs storage depots offer many advantages of a free trade zone or free port. In the Netherlands, goods in transit or intended for subsequent reexport may be stored in bonded warehouses or customs depots without payment of customs duties or other taxes, and are usually subject only to minimal customs formalities. In addition, goods intended for manufacture for export in the Netherlands may be admitted on a temporary basis without payment of duties or taxes. Warehousing System: Bonded warehouses are divided into four cat- egories: public, private, merchant-controlled (fictief), and factory. In these facilities goods may be stored for any length of time with a minimum of formalities and without payment of duties and taxes normally collected at the time of importation. Duties are imposed on goods when they are released for consumption within the customs territory of the Nether- lands. Public bonded warehouses, which are avail- able in the principal ports, may be the proper- ty of the State, a municipality, or a private company. They are generally owned, managed, and controlled, however, by municipalities and maintained under customs surveillance. The public bonded warehouses in Rotterdam are fi- nanced and operated by the Rotterdam Muni- cipal Council. The administering authority is the Rotterdam Port Authority. In Amsterdam, public bonded warehouses are administered by the Municipal Harbor and Commercial Ser- vices of the municipality of Amsterdam. In some cases space within a public bonded ware- house or an entire warehouse is leased to a pri- vate storage company, importer, or freight for- warder by authority of the local customs house and with the permission of the Ministry of Fi- nance. The private company may sublet this space to others. Storage may be undertaken under direct su- pervision of the municipal authorities. It is subject to customs surveillance which is fur- nished gratis. In general security guarantees are not required for storage, and bond need not be posted. All goods from abroad, even if exempt from duties or excise taxes, may be stored. Goods subject to internal excise tax- es, e.g., sugar, spirits, beer, and tobacco, may also be stored in public warehouses. All types of foreign goods may be sorted, packed, unpacked, examined, sampled, exhibited, relabeled, and in general, mixed, assembled, and processed as long as the identity of the goods remains ascer- tainable and the processing is not considered to be manufacturing. Manufacturing is not per- mitted and permission from the customs au- thorities must be obtained for assembling and 52 processing in certain cases. Inflammable and other dangerous goods may not be brought into public bonded warehouses. In contrast to private warehousing and stor- age concerns, the public bonded warehouses do not supply services for handling goods. Users must supply their own labor for the storing or releasing of goods and other operations, or em- ploy the sevices of freight forwarders. In Greater Rotterdam there are four public bonded warehouses, two of which belong to the municipal administrations of Rotterdam and Schiedam respectively. These are especially suitable for ship chandlers. Two other public bonded warehouses are administered by private companies and are used only for the storing of alcohol. Bonded warehouse facilities cover about 458,000 square feet. In Amsterdam there are eight public bonded warehouses encompass- ing a total covered area of 770,000 square feet. Open storage space varies considerably and must be reserved in advance. At Schiphol Air- port public bonded warehousing facilities have been recently expanded and now total 325,000 square feet. Private bonded warehouses are under private management and require the permission of the Inspector of Customs before establishment. Storage space is officially locked by Customs. Private bonded warehouses are usually main- tained in the facilities of large warehousing companies in port areas. They may, howev- er, be established for certain goods at inland locations. The operations permitted in public bonded warehouses also may be undertaken in private bonded warehouses. The latter are of- ten used for certain specified goods, particular- ly goods subject to excise taxes. Bond is re- quired. Handling of goods in private bonded warehouses is permitted only under the super- vision of a customs officer on a reimbursable basis. In Greater Rotterdam alone there are about 270 private bonded warehouses, 220 of which are tanks. "Fictief" or merchant-controlled bonded warehouses are privately owned storage sites under Government supervision but are not guarded or sealed by customs. The user has ac- cess to the goods without the presence of a cus- toms official. A bond, the amount of which is determined in each case and is dependent on the duty involved, is required for storage. Such warehouses may be established in ports and also for certain goods at inland locations. Operations permitted in the "fictief" ware- houses include storing, packing, sorting, clean- ing, polishing, etc. Goods may not be processed. Goods which may be stored in these warehouses may be dutiable or duty-free, but are limited to a list established by the Minister of Finance. This list may be extended with permission of the Minister. Goods that are easily identified such as petroleum, vegetable oils, and coffee make up the bulk of the list. Goods subject to excise tax and high value goods are excluded. There are about 1,220 ■'fictief" bonded ware- houses in Greater Rotterdam, most of which are tanks for edible and mineral oils. Factory bonded warehouses may be estab- lished in the Netherlands. This system however is little-used. These warehouses may be operat- ed in ports or at any other location which is permanently under customs supervision. They are guarded by customs. The Minister of Fi- nance may designate and license factories pro- ducing chiefly for export as factory bonded warehouses. In these warehouses raw materials and semi-finished products may be stored, pro- cessed, assembled, and manufactured. A securi- ty deposit is not required for goods brought into the warehouses and the settlement of duty is made when the goods are removed from the warehouses. Goods composed of materials of foreign origin produced in factory bonded warehouses and consumed in the Netherlands are subject to import duties on foreign parts and to turnover tax. Customs Depots : In addition to the customs bonded facilities, customs sheds are available for provisional and temporary storage. These are designated in buildings, lots, ships, quays, and in special cases, in bonded warehouses which have been found suitable by customs officials. They are secured by customs locks. The normal provi- sional storage period for goods in customs sheds does not exceed two and one-half to four months. The facilities are generally operated by municipalities, shipping companies, and freight forwarders. The operators of customs sheds are responsible for any missing goods. Goods in transit, goods for export, and goods intended for the internal market, for which no detailed declaration has been made, may be stored in the sheds. In general, the processing 53 of goods in customs sheds is not permitted; however, permission for operations such as cleaning, sorting, unpacking, repackaging, marking, sampling, and examining may be granted if necessary for preservation or fur- ther transportation. There are about 550 cus- toms sheds in Rotterdam, with a total area of approximately 10 million square feet. In the Netherlands, goods may be moved practically unhampered by truck from one part of a port to another, from one warehouse to another, and from the place of unloading to an airport or to a railway station under customs flag. This procedure is known as the "flag con- veyance" system. Transportation under cus- toms flag must be completed within a stipu- lated time limit and follow the shortest route. Only in cases of high-duty goods does a cus- toms officer accompany the vehicle. Temporary Admission for Manufacturing : In contrast to the system of factory bonded warehouses, the Netherlands has a liberal sys- tem of temporary entry under which it is pos- sible for an exporting firm to process, manu- facture, use, or repair foreign goods in its own building for eventual exportation free from import duties, and without official customs guard on the firm's premises. Temporary en- try may be obtained in either of two ways. First, exemptions from customs duties, ex- cise taxes, and turnover taxes may be obtained when importing goods on condition that they are to be exported after being processed. How- ever, a security deposit must be made to cover the taxes. The security deposit is released pro- portionally as goods are exported. Duties are collected on merchandise not exported. Second, under special arrangements with the customs authorities, customs duties, excise tax- es and turnover taxes levied on imported goods are refunded on that part of the goods which is exported after being processed or manufac- tured. Mailing Address: Additional information about the authorized operations, facilities available, charges, and regulations applicable to the customs-privileged facilities in Rotterdam may be obtained from: Havenbedrijf der Gemeente Rotterdam (Rotterdam Port Authority) Afd. Handelsinrichtingen (Commercial Establishments Department) Poortgebouw, 27 Stieltjesstraat Rotterdam, Netherlands Director, Department of Commerce, Traffic and Industry Rotterdam Port Authority Rotterdam, Netherlands Information about the facilities available in Amsterdam may be obtained from: Gemeentelijke Havens en Handelsinrich- tingen (Municipal Harbor and Commercial Ser- vice) Amsterdam, Netherlands The Amsterdam Council for Port and In- dustry 17 Battery Place New York, New York 10004 Inquiries concerning the facilities available at Schiphol Airport may be sent to: Chief, Legal and Commercial Affairs N.V. Luchthaven Schiphol (Schiphol Air- port Authority) Amsterdam, Netherlands Spain Spain has three free trade zones, lo- cated at Barcelona, Cadiz and Vigo. The Canary Islands and the Spanish cities of Ceuta and Melilla on the north African coast are free ports. Special facilities, similar to bonded ware- houses, have been established in other Spanish ports and overseas territories. Spain, including the Balearic and Canary Islands, has a total land area of about 197,000 square miles, and a population of about 32.1 million. Metropolitan Spain is located on the Iberian Peninsula and is bordered on the west by Portugal and the Atlantic Ocean, on the north by the Bay of Biscay and by France, and on the east and south by the Mediterranean Sea. At the southernmost tip of the peninsula, at the entrance to the Mediterranean Sea from the Atlantic is the British fortified station of 54 Gibraltar. The Balearic Islands are situated in the Mediterranean off the eastern coast of the Spanish mainland, and the Canary Islands are situated in the Atlantic, about 75 miles west of the African coast. Spanish African territories include the towns of Ceuta and Melilla on the North African coast and the overseas province of Spanish Sahara. The Spanish economy is largely agricultural, but has a rapidly growing industrial sector. Manufacturing covers a wide range of activi- ties, including textiles, chemicals, iron and steel, shipbuilding, paper, motor vehicles, petro- leum and cement. Spain is a member of the General Agreement on Tariffs and Trade (GATT), and is seeking association with the European Economic Community (EEC or "Com- mon Market"). Although Spain has 300 seaports, most of the country's international maritime trade is handled through 15 primary ports. The most important of these are Barcelona, Bilbao, Val- encia and Seville. The most important inter- national airports are at Madrid and Barcelona with international air services provided by a Spanish carrier (Iberia) and a number of foreign airlines. The internal transportation network is made up of rail, highway and air services. Spain has some 9,600 miles of railroads and about 82,000 miles of highways interconnecting all major production and distribution centers in the coun- try and linking with the road and rail networks of France and Portugal. Domestic air cargo and passenger services link the principal cities of Spain, the Balearic and Canary Islands and Spanish overseas territories. Except for the Guadalquivir River which is navigable by ocean-going vessels between the Atlantic port of Cadiz and the river port of Seville, and by barges from Seville to Cordoba, inland water- ways are not a significant means of transporta- tion. Free trade zones in Spain were first author- ized by royal decree dated June 11, 1929. This law, as amended, remains the basic authority for the zones' activities. Free Trade Zone at Barcelona Location The City of Barcelona is located on the Medi- terranean coastline in northeastern Spain. It is the country's chief port, industrial and com- mercial center and second largest city. It is also capital of Barcelona Province, which has an area of some 2,970 square miles and a popula- tion of about 2.8 million of whom about 1.7 million live in the city. The Spanish textile in- dustry is concentrated in the Barcelona area. Other industries in the area include olive oil, wine, paper, glass, leather, chemicals, motor vehicles, machinery and petroleum refining. About 7,500 ships call at Barcelona annually. Spanish-flag and numerous foreign shipping lines are represented. Barcelona also has an international airport. Rail lines and highways radiate out from the city to link it with other production and distribution centers. The free trade zone is made up of a tract of about 2 square miles adjacent to the commercial port area. Authorized Operations With certain exceptions, merchandise of for- eign origin not permanently prohibited from importation into Spain may be brought into the free trade zone without payment of Spanish customs duties or other national taxes and re- main free of such duties and taxes while held in the zone or if subsequently transshipped or reexported abroad. Duties become payable, however, if the merchandise is removed from the zone for consumption in Spain. Spanish merchandise may lose its nationality when brought into the free trade zone and become subject to customs duties if returned to Spain. Operations authorized in the free trade zone include storing, packaging, mixing, processing, exhibiting, sampling, marking, selling, auction- eering, division of goods from bulk to commer- cial quantities, and manufacturing. The storage of goods not used in manufacturing is limited to a 6 year period ; however, the period may be extended with permission of the customs au- thorities. Any type of industry may be established in the free trade zone, except those which may be considered detrimental to the national economy. The establishment of an industry in the zone requires a permit issued by the Ministry of Finance. Applications for such permits must be submitted through the Ministry of Finance representative (Vice President) of the zone's administering authority. 55 When a product is manufactured in the free trade zone of both foreign and Spanish raw materials and for sale in Spain, duties are levied on the proportion of foreign components to the finished product. Restrictions and Controls The customs privileges of the free trade zone do not extend to the use or consumption of building and construction materials or food or beverages. These items must be procured in Spain, but if not used or consumed in the free trade zone may be returned duty-free to Span- ish customs territory. Special restrictions and controls apply to the entry and storage in the free trade zone of the following items: merchandise restricted or prohibited from importation; goods subject to State Monopoly, e.g., tobacco; objects for per- sonal use such as jewelry, canes, parasols, um- brellas, and similar items; articles of clothing; merchandise of Spanish origin; postal corre- spondence and packages. Retail sales in the free trade zone are pro- hibited. Facilities Available Warehouse facilities are available in the zone for general cargo; additionally, the zone's ad- ministering authority operates warehouses out- side of the zone for bulk commodities. Land is available for lease; warehouses and industrial plants may be erected by lessees. Administering Authority The Barcelona free trade zone is adminis- tered by the Consorcio de la Zona Franca de Barcelona (Barcelona Free Trade Zone Con- sortium), directed by the Mayor of Barcelona. Other members of the consortium include a representative of the Ministry of Finance, (Vice President of the Consortium), other na- tional and city officials and appointees from local trade and industry organizations. Mailing Address: Consorcio de la Zona Franca de Barcelona Paseo de Circunvalacion 1 Barcelona 3, Spain Free Trade Zone at Cadiz Location Cadiz is Spain's chief Atlantic seaport. It is situated about 50 miles northwest of Gibraltar on the southwestern Spanish coastline at the junction of the Guadalquivir River and the Bay of Cadiz. The city is capital of Cadiz Province, which as an area of about 2,800 square miles and a population of about 830,000. The city has about 116,000 residents. It is a commercial center, naval base and has shipbuilding, ma- chinery, drug and agricultural processing in- dustries. About 2,000 ships call at Cadiz annually, rep- resenting numerous Spanish and foreign car- riers. The port is connected with inland points by road, rail and river transportation. The Guadalquivir River is navigable by ocean-going vessels as far as Seville and by barges as far inland as Cordoba. The free trade zone is situated in the main port area. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Barcelona. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Barcelona. Facilities Available There are limited general cargo storage facil- ities in the free trade zone. A complex of tanks, docks and pipelines for the discharge and stor- age of vegetable oils is in operation in the zone. Administering Authority The free trade zone is administered by the Consorcio de la Zona Franca de Cadiz (Cadiz Free Trade Zone Consortium), directed by the Mayor of Cadiz. Other members of the con- sortium include a representative of the Ministry of Finance (Vice President of the Consortium), other national and city officials, and appointees from local trade and industry organizations. 56 Mailing Address : Consorcio de la Zona Franca de Cadiz Cadiz, Spain Free Trade Zone at Vigo Location Vigo is an Atlantic port in northwestern Spain. It is situated in Pontevedra Province, which has an area of about 1,700 square miles bordered to the south by Portugal. Pontevedra Province has a population of about 750,000 of whom 168,000 live in Vigo, the principal city and commercial center. Vigo is a fishing center and has sawmilling, chemical, oil refining, ce- ment, glass, paper, porcelain, leather and agri- cultural processing industries, shipyards and a naval base. Vigo has about 1,500 ship arrivals annually of which about 400 are engaged in trans-At- lantic trade. There are rail and highway links with interior points, and an airport. The free trade zone is located inland from the port area. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Barcelona. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Barcelona. Facilities Available Only limited facilities are available at the present time, and the free trade zone is used principally for the assembly of trucks for ex- port. Land is available for lease. Administering Authority The free trade zone is administered by the Consorcio de la Zona Franca de Vigo, (Vigo Free Trade Zone Consortium), directed by the Mayor of the City of Vigo. The Vice President of the consortium is named by the Ministry of Finance. Other members include other city and national officials and appointees from local trade and industry organizations. Mailing Address : Consorcio de la Zona Franca de Vigo Vigo, Spain Note: An additional free trade zone has been au- thorized for establishment in the port of Carte- gena on the southeastern Spanish coast. Other Facilities In addition to the free trade zones described previously, Spain has established three types of special facilities — free ports, free deposits, and commercial deposits. These special facilities of- fer commercial advantages similar in most re- spects to those offered in other countries under bonded warehousing systems. Free Ports Ceuta and Melilla, Spanish cities situated on the northern coast of Africa approximately op- posite Gibraltar, and the Canary Islands are designated as free ports. The principal ports of entry of the Canary Islands are Las Palmas and Santa Cruz de Tenerife, and secondary ports are Sardinia de Galder, Arrecife, Puerto de Cabras, Puerto de la Cruz, Santa Cruz de La Palma, San Sebastian de Gomera, and Val- verde. In the free ports, the entry and exit of goods is controlled by license. Although Spanish cus- toms duties are not levied in the ports or in their limited hinterlands, excise taxes may be payable. Foreign goods transferred from these areas into other parts of Spain become liable to payment of all applicable duties and taxes. Transit goods must be maintained in customs- controlled areas. The activities permitted in the free ports are similar to those permitted in the free deposits (see below). Control of free port operations is vested in the Directors of Customs of the respective ports. Free Deposits Free deposit facilities are located in the cities of Algeciras, Alicante, Bilbao, Pasajes and 57 Santander, all major maritime ports on the Spanish mainland. A free deposit is a limited area in a major port containing the office of a maritime cus- toms authority and is operated by a conces- sionary company under the general supervision of the customs authorities. Goods may be held in free deposits without payment of customs duties or other taxes. General operations permitted in free deposits include storing, repacking, division of goods from bulk to commercial quantities, mixing, and all other operations which increase the val- ue of goods deposited without changing essen- tially the nature of the goods. In addition, spe- cial operations such as shelling and roasting of coffee and cocoa, shearing of hides, pulveriza- tion of wood, washing of wool, and extraction of oil from copra and oil seeds may be under- taken. Free deposits contain space for storage of all types of foreign merchandise the importation of which is not permanently prohibited by Spanish customs regulations. Combustible ma- terials may be stored in free deposits if ade- quate safety facilities are available. Petroleum may be stored for use in supplying ships. De- posited merchandise may be sold or moved free- ly; however, sale or transfer will not alter the maximum period of storage permitted. Spanish merchandise licensed for export may also be stored in free deposits. Maximum storage time in the free deposits is limited to 4 years. The time limit does not apply to merchandise des- tined for use in the free deposit. For detailed information concerning a free deposit, inquiry should be addressed to the De- posito Franco in the particular city in question. Inquiries may also be addressed to the Director of Customs in each city. Commercial Deposits Commercial deposit facilities are maintained in the ports of La Coruna, Huelva, Seville, Ma- laga, and Valencia on the Spanish mainland and in Las Palmas in the Canary Islands. Commercial deposits are similar to free de- posits but offer more limited privileges. They are also operated by concessionary companies. With a few exceptions foreign merchandise, and merchandise coming from the free ports of the Canary Islands and North Africa, and from other Spanish protectorates and possessions on which no duties or taxes have been paid may be admitted to the commercial deposits without payment of customs duties or taxes. With the approval of the customs authorities, merchandise may be stored, repacked, and re- moved in small quantities for samples. Goods may be freely sold in the commercial deposits; however, the customs authorities must be noti- fied of the sale. Goods may be stored in the deposits for a period of 4 years and may be re- moved for reexportation abroad, for transfer to another commercial deposit, for consumption in the same locality, or for shipment in coastal trade to another Spanish customs area. Merchandise which is prohibited entry in the commercial deposits includes: Spanish national merchandise, foreign merchandise which is eli- gible for importation by virtue of the fact that duties have been paid, goods entitled to enter Spain free of duty, tobacco of any type regard- less of origin, merchandise the importation of which is forbidden by the customs tariff, and gunpowder, dynamite, and explosive mixtures. Additional information about the commer- cial deposits may be obtained from the Deposi- to de Comercio in the particular city in ques- tion. In all cases inquiries also may be addressed to the Director of Customs in each city. Sweden Sweden has three free trade zones lo- cated in Gothenburg, Malmo and Stockholm. Sweden is one of the world's northernmost countries, and in terms of size, the third larg- est country in Europe. It has an area of 173,- 423 square miles and a population of about 7.9 million. The country has land borders with Norway on the west and north and with Fin- land on the north and east, and coastal bounda- ries in other directions. The seas which border Sweden are the Skagerrak, the Kattegat and the Oresund on the southwest, the Baltic Sea on the south and southeast, and the Gulf of Bothnia on the east. 58 The Swedish economy is highly industrial- ized and the population largely urban. Major industries are based directly on the country's most valuable natural resources, forests, iron ore, and water power. Foreign trade and ship- ping are important economic activities. Swe- den is a member of the European Free Trade Association (EFTA) and of the General Agreement on Tariffs and Trade (GATT). Sweden has an efficient network of railroads and intercity highways linking major produc- tion and population centers. The 9,000 miles of railroads connect directly with the Norwegian and Finnish systems and, by means of railroad ferries, with Danish, German, and Finnish sys- tems. In the central and southern portions of the country there are inland waterway routes and along the coast of the Gulf of Bothnia coastal shipping is an important means of transportation. Domestic air services are also available. Although Sweden has numerous ports, inter- national trade is carried on primarily through the three major maritime ports of Gothenburg, Malmo and Stockholm. Sweden is one of the leading maritime nations of western Europe, and numerous Swedish and foreign-flag ship- ping companies provide frequent services be- tween these ports and other countries. Inter- national air transportation is handled primari- ly at the Stockholm airport. A national free trade zone law (Frihamns- stadga), enacted in 1935, established uniform regulations for all free trade zones in Sweden. Free Trade Zone in Gothenburg Location Gothenburg, situated on the western coast of Sweden, is the country's principal port for overseas trade and during recent years has also developed into Scandinavia's major container handling center. With about 450,000 inhabi- tants it is the second largest city in Sweden and an important commercial and industrial center. It has three large shipyards and is one of the leading shipbuilding and repair centers in the world. Gothenburg is also the principal oil port in Scandinavia. There are two large oil refineries in Gothenburg and a major petro- chemical complex is situated nearby. The port of Gothenburg handles about 25,000 ship arrivals annually. There are about 80 lin- er services with frequent scheduled sailings from Gothenburg to all world ports. The Skan- dia Harbor since 1966 has developed into a cen- ter for container handling. Railways and roads radiate from Gothenburg to all parts of Swe- den. Truckload shipments and containers are forwarded every night by special express freight trains to a large number of terminals in Sweden and other Scandinavian countries. The Gota Canal links Gothenburg with lakes which provide inland waterway transportation to Stockholm on the eastern coast. Gothenburg also has an international airport. The free trade zone is situated in the main harbor area, directly across the Gota River from the main business district in the city. The two areas are connected by bridge. Authorized Operations Goods of foreign origin may be brought into the free trade zone without payment of Swe- dish customs duties or taxes and remain free of such duties and taxes while held within the zone or if subsequently transshipped or reex- ported. Duties and taxes become payable, how- ever, if the goods are removed from the zone for use or consumption in Sweden. Goods of Swedish origin and duty-paid foreign goods may also be brought into the free trade zone. Upon entry they are considered exports and become eligible for export rebates or drawback payments. Goods may be stored in the free trade zone without time limit. Packing, unpacking, grad- ing, cleaning, sorting, mixing, blending, break- ing down from bulk, marking and similar ac- tivities are permitted. Such operations may be performed freely on goods in transit or for export or reexport.. Manufacturing operations may also be established in the free trade zone, but require special permission from the na- tional government. Goods held in the free trade zone may be used as collateral or sold. The zone's adminis- tering authority is empowered to issue negoti- able instruments indicating title to goods held on its premises, and thereby make possible their sale or mortgage through documentary transfers. Direct sales of customs-privileged 59 goods to ships or aircraft require special per- mission. Restrictions and Controls The free trade zone is within the jurisdiction of the Swedish customs authorities. Goods held in the zone are under customs control. Storage or other activities related to customs-privileged goods may be subject to supervision by the customs authorities. The use, consumption, or retail sale within the zone of duty-free goods is prohibited. Only foreign goods which have been declared at cus- toms and any applicable duties paid, or Swedish goods whose nationality has been maintained may be sold at retail, consumed or otherwise used within its confines. Facilities Available The free trade zone has a total land area of about 3.2 million square feet. Total covered storage space amounts to about 825,000 square feet of which 565,000 are heated, 212,000 are unheated and 48,000 are refrigerated. The covered storage area comprises seven transit sheds, 11 warehouses and 20 steel light- ers with a storage capacity of 270 tons each. Importers and exporters may rent both ware- house space and office space from the admin- istering authority of the zone, and conduct all arrangements in connection with their ship- ments from such premises. Exhibition facilities are not available. Administering Authority The free trade zone is administered by Gote- borgs Frihamns AB (Gothenburg Free Port Company, Ltd.), a private company which op- erates under a concession from the municipal authorities of Gothenburg. This company is responsible for all storage, warehousing and other operations within the zone. A port authority, Goteborgs Hamnstyrelse (Gothenburg Harbor Board), has responsibili- ty for the administration of harbor facilities, the berthing of ships and the maintenance of sheds and cranes in the free trade zone as well as other port areas. Mailing Address : General Manager Goteborgs Frihamns AB S-40080 Goteborg, Sweden General Manager Goteborgs Hamnstyrelse P. O. Box 2553 S-40317 Goteborg, Sweden Free Trade Zone at Ma! mo Location Malmo, near the southern tip of Sweden, is the country's principal port for trade with oth- er European countries. It is situated on the Oresund almost directly across from the port of Copenhagen, Denmark. This location places it at the junction of main trade routes between the continent and the Scandinavian peninsula. Malmo is also the third largest city in Sweden and an important industrial area. The region served by the port covers a large area and in- cludes more than 1 million inhabitants of whom about 255,000 reside in Malmo. Industries lo- cated in the Malmo area include shipbuilding, foundries and engineering, cement, packaging, tobacco, textiles, and food processing. The port is served by numerous Swedish and foreign-flag shipping companies which pro- vide frequent scheduled services to all points. It is equipped to handle containers and unit loads. Several railroad lines radiate from Mal- mo to other parts of Sweden, and there is train ferry service between Malmo and Copenhagen, Denmark, several times a day. Railroad tracks extend into the port area, including the free trade zone. There are main highways and a ma- jor airport nearby. The free trade zone is situated in the main port area, close to the center of the city. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Gothenburg. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Gothenburg. 60 Facilities Available The free trade zone has a total area of about 3.5 million square feet. There are 843,000 square feet of covered space of which about 415,000 are heated, and 12,000 are refrigerated. The remaining area is unheated. The free trade zone contains about 19 warehouses and sheds and a grain silo. Importers and exporters may rent both ware- houses and office space from the free trade zone's administering authority and may con- duct all arrangements in connection with their shipments from such premises. Administering Authority The free trade zone at Malmo is administered by Malmo Frihamns AB (Malmo Free Port Company, Ltd.), a private company which oper- ates under a concession from the municipal au- thorities of Malmo. This company is responsible for storage, warehousing and other operations within the free trade zone. A port authority, Malmo Hamnforvaltning (Malmo Harbor Ad- ministration) has responsibility for the main- tenance of sheds and equipment and for the berthing of vessels. Mailing Address : General Manager Malmo Frihamns AB Hjalmaregatan 1 S-21120 Malmo, Sweden Malmo Hamnforvaltning Hjalmaregatan 1 S-21120 Malmo, Sweden The port of Stockholm is served by about 50 shipping lines operating regular services to most of the coastal ports of Europe and to other continents. It has access to coastal traffic be- tween Baltic and North Sea ports and there is also inland waterway transport from Stockholm to the west coast port of Gothenburg. Rail and highway lines link the port with inland points in Sweden and with neighboring countries. Sweden's major international airport is located outside of Stockholm. The free trade zone is situated in the main port area and contains a substantial proportion of the port's general cargo handling facilities and storage installations. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Gothenburg. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Gothenburg. Facilities Available The free trade zone covers an area of more than 4.1 million square feet, and contains five storage warehouses, 13 sheds and several grain silos. Covered storage space amounts to approx- imately 1.5 million square feet of which about 1.1 million are heated, 230,000 are unheated and 135,000 are refrigerated. There are special fa- cilities for exhibiting. Free Trade Zone at Stockholm Location Stockholm, situated on the east coast of Sweden at the junction of Lake Malar and the Baltic Sea, is the country's leading Baltic port. It is also the capital, largest city and main in- dustrial center of Sweden. More than 1.2 mil- lion people live in Greater Stockholm. Its in- dustries include iron and steel works, automo- bile production, chemicals, textiles, paper and food processing. Administering Authority The free trade zone at Stockholm is admin- istered by Stockholms Frihamns AB, (Stock- holm Free Port Company, Ltd.), a corporation owned by the municipal authorities of Stock- holm. This company is responsible for storage, warehousing and other operations in the zone, a port authority, Stockholms Hamnstryrelse (Stockholm City Harbor Board) is responsible for the management of the harbor and the maintenance of equipment and installations in the free trade zone and other port areas. 61 Mailing Address: Stockholms Frihamns AB Sandhamnsgatan 57 S-11528 Stockholm, Sweden Stockholms Hamnstyrelse Sandhamnsgatan 57 S-11528 Stockholm, Sweden Switzerland Switzerland has an extensive system of bonded warehouses which offer some of the facilities of free trade zones elsewhere in the world. The larg- est of the Swiss facilities are main- tained in the Basel, Geneva and Zurich areas. Switzerland, situated in the center of West- ern Europe, has a land area of 15,944 square miles and a population of about 6 million. It is bordered by the Federal Republic of Germany on the north, Austria and the Principality of Liechtenstein on the east, Italy on the south and France on the west. The Swiss economy is highly developed and largely industrialized. Commerce, banking, in- surance and tourism are also significant eco- nomic activities. Foreign trade is of great im- portance, with most Swiss industries dependent upon imports for their raw materials and many selling a large proportion of their output abroad. Switzerland is a member of the Euro- pean Free Trade Association (EFT A) and of the General Agreement on Tariffs and Trade (GATT). Efficient rail, highway and air transporta- tion facilities connect all points in the country and link with the systems of neighboring coun- tries. Switzerland is an important international rail transit center, with major junctions at Basel, Brig, Chiasso, Geneva, Schaffhausen and Zurich. In all there are about 3,300 miles of railroads and 31,000 miles of surfaced roads. The Rhine River, which originates in Switzer- land, accommodates inland waterway transpor- tation between the river port of Basel and the North Sea. Basel, on the Upper Rhine at the junction of the French-German-Swiss borders, provides Switzerland with direct water trans- port connections via the Rhine to Strasbourg, the German Rhineland, the Ruhr, Rotterdam and Antwerp. The port handles approximately one-third of Swiss imports. Incoming raw ma- terials and commodities are transferred there to other modes. Major international airports are located at Zurich, Geneva and Basel. A Swiss carrier (Swissair) and numerous foreign inter- national air carriers serve these airports. Customs-Privileged Facilities Switzerland has an extensive system of cus- toms-privileged facilities in which foreign goods can be stored and handled without pay- ment of Swiss customs duties and subject only to minimal customs formalities. These facilities are essentially bonded warehouses, although they also offer certain free trade zone-type privileges. The operations of the customs-privileged fa- cilities are governed by the provisions of the Swiss Federal Customs Law as amended and executive regulations issued to implement the law. The facilities are subject to regulation by the Swiss Federal Customs Administration, which also has the authority to approve new facilities and the responsibility for overall con- trol of merchandise held in them. The ware- houses, however, are operated by public sector corporations, railroads, or private warehousing companies. There are four categories of customs-privi- leged facilities in Switzerland — "free ports," storage facilities for goods in transit through the river port of Basel, federal entrepots, and private warehouses. The first three are oper- ated as public utilities, in the sense that they are available to all prospective users under the same conditions. "Free Ports" The free ports (in French, ports-francs; in German, zollfreilager) are the most privileged of these facilities. They are, in effect, bonded warehouses which can accept shipments of goods that have not been cleared through cus- toms and store them without time limit. Al- 62 though free port premises are guarded by cus- toms officials and police, employees of compa- nies using warehouse space and their visitors have free access to them at all times and may inspect goods and perform work without direct surveillance by customs officials. Swiss customs duties become payable only if the goods are removed from the free ports for use or con- sumption in Switzerland. In addition to storage, other operations which do not change the tariff classification of goods held in the warehouses, such as assem- bling, sampling, mixing, inspecting, blending, and repacking are legally permitted in the free ports. Exceptions or additional operations, in- cluding manufacturing, may be allowed upon special application to the Swiss Federal Cus- toms Administration in Bern. In practice, the Swiss free ports vary widely both as to the categories of goods accepted and the types of operations permitted in individual warehouse facilities. For example, some accept general cargo, others are reserved for specified commodities such as liquid fuels, petroleum products, wines, spirits, etc., and others con- tain only refrigerated space for perishables. Similarly, depending on space and other limi- tations, individual free port facilities may not permit all of the operations listed as legally possible in the preceding paragraph. In addi- tion, special Federal or local regulations may apply to certain commodities, such as foodstuffs, stored or handled in the free ports, and the Swiss Federal Customs Administration may impose particular regulations on some free port operations. Generally, facilities for manufac- turing are not available in the free ports ; they would be the object of special negotiations with the warehouse operators and with the customs authorities. There are 18 free port facilities in Switzer- land, located in or near major transportation centers, e.g., the port of Basel, railroad junc- tions, and the airports of Zurich and Geneva. The largest of the free port facilities are situ- ated in the Basel, Zurich, Geneva and Chiasso areas. Storage Facilities for Goods in Transit through the River Port of Basel Regulations governing the storage facilities for goods in transit through the river port of Basel are similar to those applicable to the "free ports" described above. Goods eligible for storage in these facilities are limited to liquid fuels, cereals, and certain other specified bulk commodities. In addition, shipments of at least 26,400 pounds of other goods may also be ware- housed in these facilities with a maximum stor- age period of 2 years. Federal Entrepots Swiss federal entrepots are also warehouse- type facilities, but they are subject to stricter customs supervision and have more limitations than the free ports described above. They may accept goods that have not been cleared through customs and store them without pay- ment of duty only for a specified period of time. The usual time limit is 2 years. Duties become payable when the goods are moved from the warehouses for use or consumption in Switzer- land. Goods warehoused in entrepots are under customs control. The operations permitted in entrepots are limited to storage, unpacking, repacking and such special handling as may be required by a particular type of goods. Generally, the pro- cessing of goods in entrepots is prohibited un- less necessary to prevent deterioration. There are eight entrepots operating in Swit- zerland. They are located at or near major rail- road stations. The operators of entrepots are principally commercial organizations or coop- eratives. Private Bonded Warehouses Goods eligible for warehousing without pay- ment of customs duties in these facilities are limited to specified items generally of a type for which there would be no danger of substi- tution, mostly bulk items and foodstuffs. The bonded warehousing facilities may be estab- lished anywhere in the country and are not guarded or otherwise supervised by the cus- toms authorities. However, bond must be post- ed and cash or securities deposited against eventual payment of duties in the event the goods are used or consumed in Switzerland. The maximum storage period is 2 years. Bond is released if the goods are reexported from 63 the country. Goods intended for consumption in Switzerland may be processed in any way as the amount of customs duty is established prior to their entry into private bonded warehouses. However, goods intended for reexport may not be processed or altered in any way if bond is to be released; they must be presented to the cus- toms authorities at the port of exit in the iden- tical condition and even in the same wrappings as at the time of entry. Mailing Address : Inquiries about free ports and entrepots may be addressed to: Swiss Federal Customs Administration Monbijoustrasse 40 3000 Bern, Switzerland There are two associations of warehouse op- erators in Switzerland from which information on warehousing regulations may be obtained: L'Association suisse des ports francs Port Franc de Geneve SA Route du Grand-Lancy 6 1200 Geneva, Switzerland Verband schweizerischer Lagerhauser Freigutstrasse 27 8002 Zurich, Switzerland Yugoslavia Yugoslavia has five free trade zones located at Belgrade, Koper, Novi Sad, Rijeka and Split. Yugoslavia is situated in southeastern Eu- rope, largely in the central and northwestern parts of the Balkan peninsula. It is bounded on the west by the Adriatic Sea, on the northwest by Italy, on the north by Austria and Hungary, on the east by Romania and Bulgar- ia, and on the south by Greece and Albania. It has a total land area of 98,766 square miles and a population of about 20 million. Formerly an agricultural country, Yugosla- via has emphasized the development of indus- try in recent years and now has a mixed economy. Important industries include metal manufacturing, textiles, food processing, wood- working, chemicals and electric energy produc- tion. Although Yugoslavia is a Communist state with all but the smallest economic enterprises socially rather than privately owned, in opera- tion it often resembles a free enterprise econ- omy. Plant management is decentralized, individual units have a large degree of indepen- dence and the national Government generally confines its economic activity to fiscal and mone- tary policy. International trade is becoming in- creasingly important to Yugoslavia. The coun- try is a member of the General Agreement on Tariffs and Trade (GATT), and cooperates with both East and West European trading blocs. Railroads are the chief means of transporta- tion within Yugoslavia. There are about 7,200 miles of track interconnecting major produc- tion and population centers and linking with the rail systems of neighboring countries. There is a 49,000-mile road network of which about 9,000 miles are paved. The road network includes two new highways extending from Austria to Greece. Inland transportation is also provided by about 1,200 miles of navigable riv- ers and canals, principally the Danube River and its tributaries. Yugoslavia has six inter- national airports, served by a national airline and a number of foreign carriers. Domestic air transportation is also available. There are three principal maritime ports, Rijeka, Split and Ploce, located on the Adriatic coast. The legal authority for the establishment of free trade zones in Yugoslavia was published in the Yugoslav Official Gazette, Number 13, of 1963, under the title, "Amendment of the Customs Law." Implementing regulations were published in Official Gazette, Number 45, of 1963. Regulations which permit joint business ventures between Yugoslav and foreign firms to operate in the free trade zones appeared in Official Gazette, Number 20, of 1967. All free trade zones in Yugoslavia operate under individual concession, granted by the Secretari- at for Finance in agreement with the Secre- tariat for Foreign Trade and the Secretariat for Transport and Communications. 64 Free Trade Zone in Belgrade Location Belgrade is situated inland in east-central Yugoslavia in the Republic of Serbia at the junction of the Sava and Danube Rivers. It is the capital of Yugoslavia and, with 703,000 residents, its largest city. Belgrade is also the country's commercial hub, principal river port and rail center, and an important industrial area. Industries located in or near Belgrade in- clude machinery, electrical goods, automobiles, leather goods, textiles, shipbuilding (river craft) and agricultural processing. Inland waterways (the Danube), rail lines and highways link Belgrade with other centers in Yugoslavia and with neighboring countries. The city has access to Danube River shipping extending from Austria on the north through eastern Yugoslavia to Romanian Black Sea ports. With completion of the Rhine-Main-Dan- ube Canal in 1981, it will also have access to German and Dutch river and maritime ports. Railroads radiate from Belgrade to all points in Yugoslavia, and Belgrade is a major junc- tion for international trains running between Turkey and the Balkan countries and the West European countries. It is also the site of Yugo- slavia's principal international airport. The free trade zone is located in the port area. Authorized Operations Goods of foreign origin may be brought into the free trade zone without payment of Yugoslav customs duties and remain free of such duties while held in the zone or if subse- quently transshipped or reexported abroad. Customs duties become payable, however, if the goods are removed from the zone for use or consumption in Yugoslavia. Goods of Yugoslav origin may also be brought into the free trade zone for storage, consolidation or processing pending actual export. Goods may be held in the free trade zone without time limit. The operations which may be undertaken in the zone include loading, unloading, storage, breaking down from bulk, weighing, assem- bling, labeling, packing and the taking of sam- ples. Industrial activities such as processing, mixing, manufacturing and repairing are also permitted. Goods held in the free trade zone may be exhibited and sold at wholesale, and ship chandlering may be carried on. Both foreign and Yugoslav firms may use the facilities of the free trade zone for the storage and dispatching of goods. Foreign firms may store their goods in public warehouses and, depending upon availability, lease space in such warehouses. In addition, recent Yugoslav legis- lation permitting joint ventures between for- eign and domestic firms applies in the free trade zone. Such joint ventures are permitted to undertake industrial and commercial pro- cessing of goods in the zone, construct build- ings to house such operations and, subject to special approval, the foreign participant may establish an office in the free trade zone and may employ both foreign nationals and Yugo- slav citizens. Foreign construction equipment and related goods intended for temporary use in joint-venture projects may be admitted to the zone without payment of customs duties. Such equipment, however, must be removed from the zone when its use ceases. Restrictions and Controls Customs-privileged goods may not be used or consumed in the free trade zone. Customs duties are payable and special documentation is required for imports of capital goods, fuels, etc. to be used by firms operating in the zone. With the exception of ship chandlering, retail trade in the free trade zone is not permitted. Special controls apply to the entry and stor- age of goods the sale of which is prohibited by general or specific Yugoslav regulations, and also to goods such as narcotics, weapons, met- als, and jewelry. Inflammable and explosive ma- terials are subject to special handling and stor- age regulations. For purposes of customs control, activities undertaken in the free trade zone are subject to supervision by the customs officials. Zone users are required to submit records to the administering authority, which in turn submits them to the customs authorities, concerning movements of goods in or out of the zone and any movement, handling, or processing within it. The customs authorities are empowered to impose additional special requirements as necessary. 65 Facilities Available Restrictions and Controls The free trade zone contains about 108,000 square feet of covered storage space. Further information on facilities may be available from the administering authority. Administering Authority The Belgrade free trade zone is operated by Preduzece Beogradske Luke (Belgrade Port Enterprise). The zone was established in 1964. Mailing Address : Preduzece Beogradske Luke Belgrade, Yugoslavia Yugoslav Federal Economic Chamber Kneza Mihailova 8 Belgrade, Yugoslavia Free Trade Zone at Koper Location Koper is a port situated on the western coast of the Istrian peninsula near the head of the Adriatic Sea, about 10 miles south of Trieste. Formerly a coastal port, Koper has only in re- cent years developed facilities to handle inter- national maritime traffic. Additional port improvement and modernization projects, in- cluding the construction of a bulk cargo port for iron ore and petroleum storage facilities, are planned. A railroad line linking the port with the Yugoslav railroad network has recently been completed. This line makes possible the direct transfer of goods by rail from Koper to neigh- boring countries. Inland transport by road is also available. There is no airport in Koper; the nearest international airport is located at Ljub- ljana, about 90 miles to the east. The free trade zone is located on the northern shore of the port and includes the entire international cargo- handling area. It is about 77 acres in area. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Belgrade. See section under this heading in the sum- mary of the free trade zone at Belgrade. Facilities Available The free trade zone has sheds and ware- houses which contain more than 430,000 square feet of covered space, open storage facilities comprising about 523,000 square feet, cham- bers for the disinfestation and accelerated rip- ening of fruit, a freezing plant, a cold storage warehouse and tanks for edible oils. An indus- trial area is planned. Forwarding and other operations in connec- tion with goods in transit may be arranged with several Yugoslav enterprises operating in the zone. Administering Authority The free trade zone at Koper is operated by the Podjetje Luke i Skladisca, Koper (Koper Port and Storage Enterprise). The zone was established in 1964. Mailing Address: Podjetje Luke i Skladisca Koper, Yugoslavia Yugoslav Federal Economic Chamber Kneza Mihailova 8 Belgrade, Yugoslavia Free Trade Zone at Novi Sad Location Novi Sad is a rail center and Danube River port situated in northeastern Yugoslavia, about 60 miles north of Belgrade. It is also the capital of Vojvodina Autonomous Province and has a population of about 85,000. Its industries in- clude oil refining, cotton textiles, farm machin- ery and agricultural processing. There are coal mines and natural gas fields in the vicinity. Novi Sad has easy access to river, road and rail transportation, but has no airport. The free trade zone is located in the port area and is roughly 861,100 square feet in area. 66 Authorized Operations See section under this heading in the sum- mary of the free trade zone at Belgrade. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Belgrade. connections with all points in Yugoslavia and neighboring countries. Rijeka does not have an international airport, but is presently served by those at Zagreb and Ljubljana, both about 90 miles distant. However, an international airport to serve Rijeka is under construction on the island of Krk. The free trade zone is situated in the port area. Facilities Available Facilities are still under development. The administering authority may be able to provide specific information. Administering Authority The free trade zone at Novi Sad is adminis- tered by Preduzece Pristanista i Skladista ( Port and Storage Enterprise) . Mailing Address : Preduzece Pristanista i Skladista Novi Sad, Yugoslavia Yugoslav Federal Economic Chamber Kneza Mihailova 8 Belgrade, Yugoslavia Free Trade Zone at Rijeka Location Rijeka is an Adriatic port in northern Yugo- slavia, approximately 40 miles to the southeast of Trieste, Italy. It is situated on the eastern coast of the Istrian peninsula at the head of the Gulf of Kvarner, an inlet of the Adriatic Sea. Rijeka is Yugoslavia's principal maritime port and an important rail terminus and manu- facturing center. Its industries include a major shipyard and repair facility, a large oil refin- ery, sawmills, tuna fishing, and the production of wine, olive oil and tobacco products. With more than 116,000 inhabitants, Rijeka is the sixth largest city in Yugoslavia. The port of Rijeka handles more than 60 percent of Yugoslavia's foreign trade. It is served by numerous Yugoslav and foreign-flag shipping companies which provide frequent scheduled services. There are rail and highway Authorized Operations See section under this heading in the sum- mary of the free trade zone at Belgrade. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Belgrade. Facilities Available The free trade zone contains ten covered warehouses with more than 1,076,000 square feet of storage space and several open storage areas. There are also a grain elevator, a special plant for heating rubber, and a special chamber for cooling cargo. Forwarding and other operations in connec- tion with goods in transit may be arranged with several Yugoslav enterprises operating in the zone. Administering Authority The free trade zone at Rijeka is operated by the Poduzece Luke i Skladista Rijeka (Rijeka Port and Storage Enterprise). The zone was established in 1964. Mailing Address : Poduzece Luke i Skladista Rijeka, Yugoslavia Yugoslav Federal Economic Chamber Kneza Mihailova 8 Belgrade, Yugoslavia 67 Free Trade Zone at Split Location Split is a city and port situated about mid- way down the 1,200-mile Adriatic coastline of Yugoslavia. It is the country's second-ranking port and the principal city of the Dalmatian resort region. Industries located in or near Split include a shipyard, fish cannery, cement works, distilleries, carpet manufacturing plants, and coal mines. Tourism is also an im- portant economic activity. The port of Split handles about 15 percent of the country's foreign trade, and is served by a number of Yugoslav and foreign-flag shipping companies. The port is connected by rail with the major marketing centers at Zagreb, about 250 miles to the northeast, and Belgrade, about 470 miles to the east as well as with other points in Yugoslavia and neighboring coun- tries. Split also has an international airport. The free trade zone is situated in the port area. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Belgrade. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Belgrade. Facilities Available The free trade zone, situated in the northern part of the port, is made up of commercial and industrial areas, totaling about 35 acres. It con- tains multi-storied warehouses which have a total storage area of 430,000 square feet and a grain silo. Industrial enterprises located in the zone include a slaughterhouse, a cement plant, a gypsum factory, a ship-scrapping facility and a marble plant. Administering Authority The free trade zone at Split is operated by Zajednica Lukih Poduzeca Split (Association of Split Port Enterprises). The zone was es- tablished in 1967. Mailing Address : Free Port Zajednica Lukih Poduzeca Split, Yugoslavia Yugoslav Federal Economic Chamber Kneza Mihailova 8 Belgrade, Yugoslavia 68 LATIN AMERICA 2«t Freeport GULF OF MEXICO Ireland Island BERMUDA 1 Freeport \ Grand Bahama Island ITI5U «-' * NORTH ATLANTIC OCEAN BRITISH DOMINICAN REPUBLIC HAITI "!^*N. HONDURAS eO uJ^O & HONDURAS JAMAICA 60Providencia ' _ 9 Aruba ^^Is^nr^^^^ 10 11 /• / u Curacao SALVADOR' / *rv^f^x-i Barranqu : lla , NICARAGUA /^ Colon . \ VENE^ COSTA RICA PANAMA GUYANA SURINAM FRENCH GUIANA &, ECUADOR PACIFIC OCEAN 1. Freeport, Grand Bahama Island, Bahama Islands 2. Freeport, Ireland Island, Bermuda 3. Marians, Brazil 4. Barranquilla, Colombia 5. San Andres Island, Colombia 6. Providencia Island, Colombia 7. Coatzacoalcos, Mexico 8. Salina Cruz, Mexico 9. Aruba, Netherlands Antilles 10. Curacao, Netherlands Antilles 11. Colon, Panama 12. Colonia, Uruguay 13. Nueva Palmira, Uruguay Latin America, the Caribbean, Bermuda COUNTRY TYPE OF FACILITY PLACE Argentina Transit Zones Barranqueras, Buenos Aires, Concordia, Empedrado, Jujuy, La Quiaca, Mendoza, Monte Caseros, Paso de los Libres, Pocitos, Rosario, Salta, San Juan Free Perimeter Tierra del Fuego Bahama Islands Free Trade Zone Freeport, Grand Bahama Island Bermuda Free Trade Zone Freeport, Ireland Island Brazil Free Port Manaus Transit Zones Belem, Corumba, Manaus, Paranagua, Porto Velho, Santos Chile Free Perimeter Northern Zone Free Perimeter Southern Zone Transit Zones Arica, Antofagasta Colombia Free Trade Zone Barranquilla Free Port San Andres Island Free Port Providencia Island Free Perimeter Amazonas Mexico Free Trade Zone Coatzacoalcos Free Trade Zone Salina Cruz Free Perimeters Baja California, Sonora, Quintana Roo Netherlands Antilles Free Trade Zone Aruba Free Trade Zone Curacao Panama Free Trade Zone Colon Paraguay Transit Zones Concepcion, Encarnacion, Asuncion, Villeta Peru Free Perimeter Amazon Region Transit Zones Matarani, Mollendo Uruguay Free Trade Zone Colonia Free Trade Zone Nueva Palmira 71 Chapter 9 Free Trade Zones and Related Facilities Latin America, the Caribbean, and Bermuda Argentina Argentina has designated the follow- ing cities as transit zones: Barran- queras, Buenos Aires, Concordia, Empedrado, Jujuy, La Quiaca, Men- doza, Monte Caseros, Paso de los Li- bres, Pocitos, Rosario, Salta and San Juan. It has also established a free perimeter in the Maritime Province of Tierra del Fuego. The Republic of Argentina occupies almost the entire southern part of South America east of the Andes. It is the second largest country on the continent, with a land area of almost 1.1 million square miles. It is bounded on the west by Chile, on the north by Bolivia and Par- aguay, on the northeast by Brazil and Uruguay, and on the east and southeast by the Atlantic Ocean. The population of the country is around 23 million. Argentina has a temperate-zone economy based largely on agriculture and a growing in- dustrial sector. It is a member of the General Agreement on Tariffs and Trade (GATT) and is a member of the Latin American Free Trade Association (LAFTA). International com- merce is largely centered about the capital city and principal port, Buenos Aires, although cer- tain regional ports located on the Rivers Plate and Parana are becoming increasingly impor- tant. Argentina's freight transportation pattern is typical of that found in most countries on the South American continent, except for land- locked Bolivia, in its heavy reliance on water transportation for the movement of freight. In- ternational freight is usually carried directly to Argentine ports by ocean carriers. Much of the regional and domestic freight is carried by coastal, and to a lesser extent, inland river car- riers. For the most part, the use of overland transport is confined to domestic movements or to trade with contiguous countries where water shipping does not offer an alternative. In Ar- gentina an expanding road network has super- seded rail carriers in importance. Both rail and road networks connect with the systems of contiguous countries. Because of the availability of direct ocean shipping to most South American countries, the use of customs-privileged areas for the facilita- tion of trade with third countries is limited. Free trade zones, free ports and free perimeters might therefore be expected to serve primarily the hinterland of the country in which they are located, and secondarily, remote areas of contiguous countries with which they share regional transportation systems, particularly navigable rivers. For the same reason, the most important transit zones in South America, from the viewpoint of third-country traders, are those which serve Bolivia and Paraguay as neither country has ocean ports of its own. Argentina affords both Bolivia and Paraguay access to Atlantic shipping lanes through a 72 number of transit zones which afford a variety of routes and modes of transport. From Argen- tina's deep water ports, goods may move to Bolivia directly overland by road or rail, or by a combination of river and overland routes. The principal route for Paraguay's international commerce is the Paraguay-Parana River system which connects the river ports and principal cities of Paraguay directly with Argentine deep-water ports. In addition to waterways, both road and rail transportation are available. Transit Zones By international agreement Argentina pro- vides special facilities for goods enroute to Bolivia, Brazil, Chile, Paraguay and Uruguay. Argentina does not levy customs duties or im- port taxes on such shipments, provided certain documentary and entry formalities are observ- ed. Detailed information concerning the avail- able facilities and applicable regulations in these zones may be obtained from the national authority responsible for their administration. The mailing address is as follows: Direccion Nacional de Aduanas (National Customs Administration) Azopardo 250 Buenos Aires, Argentina The cities and ports designated as transit zones are: Barranqueras — for Bolivia: Barranqueras is a port on the west bank of the Parana River. It is located almost 800 miles upstream from Buenos Aires and an approximately equal dis- tance from the Bolivian border. The port is connected with Bolivia by rail. Barranqueras is accessible from Buenos Aires by river craft and small coastal vessels. Its importance as a tran- sit zone lies in the fact that it gives land-locked Bolivia an outlet to Atlantic shipping, balanc- ing those outlets provided by Chile through the Pacific ports of Antofagasta and Arica. (See section on Chile, following.) Buenos Aires — for Bolivia and Chile: Buenos Aires is located in the estuary of the River Plate near the Atlantic Ocean. It is Argentina's capital, principal port, commercial and indus- trial center, and transportation hub. Goods in transit through Buenos Aires for Bolivia and Chile may be shipped by road or rail. Concordia — for Brazil, Paraguay and Uru- guay: Concordia is located on the Argentine side of the Uruguay River, directly opposite Salto, Uruguay. Goods may be shipped by rail or road from Concordia to the countries for which it is a transit zone. Empedrado — for Brazil: Empedrado is a river port on the east bank of the Parana River. Goods may be shipped by rail from Empedrado to Brazil via Paso de los Libres (see below). Jujuy — for Bolivia and Chile: Jujuy is a rail center and provincial capital in northwestern Argentina from which goods may be routed by rail to either of the countries for which it is a transit zone. La Quiaca — for Bolivia: La Quiaca is a bor- der town in northwestern Argentina. It is one of the two points at which the Bolivian and Argentine railroad systems connect. The Bo- livian system extends northward to La Paz, and the Argentine system southward to the ports of Rosario and Buenos Aires. Mendoza — for Bolivia and Chile: Mendoza is located in the west-central portion of Argen- tina. A meter-gauge Trans-Andean railway con- nects Mendoza with Los Andes, Chile. At both terminals, however, onbound goods must be transferred to broad-gauge systems. Monte Caseros — for Brazil and Paraguay: Monte Caseros is located on the Uruguay River, at a point almost directly opposite the Brazil- Uruguay border. Goods may be shipped from Monte Caseros by rail through Paso de los Libres (see below) to Brazil. Goods destined for Paraguay may also be shipped by rail to the Argentine town of Posada where a ferry cross- ing the Alto Parana connects the two systems. Paso de los Libres — for Brazil: Paso de los Libres is located on the Uruguay River almost directly opposite the Brazilian town of Uru- guaiana. Goods may be transferred to the Brazilian rail system at this point. Pocitos — for Bolivia: Pocitos is a border town in northern Argentina, and the second point at which the Bolivian and Argentine rail systems connect. The Bolivian system extends north to serve the western portion of that country. One of the Argentine lines extends southeastward to the upstream ports of the Parana, and the other southward to the ports of Rosario and Buenos Aires. Rosario — for Bolivia and Chile: Rosario is a major port on the Parana River and is accessible 73 to ocean vessels. It is also a rail center and major transportation hub. Goods unloaded at Rosario may be shipped westard to Chile by rail via Mendoza, or northwest to Bolivia. Salta — for Bolivia and Chile: Salta is located in northwestern Argentina. Goods may be routed westward to Chile through the Socompa Pass in the Andes, and thereby to the Antofa- gasta area. Goods may also be routed northward to Bolivia via either Pocitos or La Quiaca. Salta is also connected by rail with the Parana River ports and the lower Argentine ocean ports of Rosario and Buenos Aires. San Juan — for Bolivia and Chile: San Juan is located in west-central Argentina, north of Mendoza. It affords highway and rail transpor- tation to Bolivia and Chile. Free Perimeter of Tierra del Fuego Location The Argentine Territory of Tierra del Fuego lies to the south of the Strait of Magellan. It occupies the northeastern portion of the major island of the Tierra del Fuego archipelago as well as some smaller adjacent islands. The re- mainder of the archipelago is held by Chile. Separated from the Argentine mainland by the Strait of Magellan, the Territory is remote, underdeveloped and sparsely populated. It has a land area of approximately 8,000 square miles and a population of approximately 7,000 per- sons. Entry of all merchandise to this region is made through the Territory's ports of Usuhaia and Rio Grande. Authorized Operations Free perimeter status was given to Tierra del Fuego by Decree-Law No. 7101 of 1956 which had as its goal the promotion of economic and social improvement within that region. Both consumer goods and machinery and equipment to be utilized within the territory are permitted entry free of all customs duties, other import charges and port dues. Such imports, however, are subject to applicable quotas. Imported goods withdrawn from the free perimeter area into the national customs ter- ritory are subject to payment of the duties, charges and dues from which they had been exempted. Restrictions and Controls No unusual restrictions or controls are applied. Administering Authority The free perimeter area is administered by the Governor of Tierra del Fuego. Mailing Address: Gobernador de Tierra del Fuego (Governor of Tierra del Fuego) Usuhaia Gobernacion Maritima de Tierra del Fuego Argentina Bahama Islands A free trade zone has been established at Freeport on Grand Bahama Island. The Bahama Islands extend in a southeast- erly direction for about 700 miles in the Atlan- tic Ocean with the northernmost point approxi- mately 50 miles east of Florida and the south- ernmost point approximately 90 miles from Haiti. There are about 2,000 islands in the group of which about 20 are important. The land area of these islands is approximately 4,400 square miles and their population totals about 160,000. The Bahama Islands received complete inter- nal self-government under a constitution which went into effect in January 1964. Foreign af- fairs, defense and internal security are reserved to the British Crown, which is represented in the Bahamas by a Governor. Tourism is the principal basis of the economy of these islands. Free Trade Zone at Freeport Location Freeport is situated on Grand Bahama Island, the third largest and northernmost of the 74 Bahamas group. The population of the island is approximately 15,000 and its land area 560 square miles. Freeport lies 120 miles northeast of Miami and 145 miles northwest of Nassau, the capital of the Bahamas and the principal population center. The free trade zone includes Freeport Harbor as well as some adjacent territory. It is served by a deep water harbor and an international airport. shipbuilding, lumbering, engineering, contract- ing, bunkering and stevedoring. A tax holiday incorporated into the 1955 agreement provides that the Government will not levy real estate or personal property taxes within the zone until 1980. In addition, the Port Authority, firms operating in the zone, and their employees are guaranteed freedom from income taxes on earnings generated from their activities within the zone until 1980. Authorized Operations The legal basis for the free trade zone at Freeport is a 1955 agreement between the Gov- ernment of the Bahama Islands and the Grand Bahama Port Authority, a private corporation. With the exception of "consumable stores," defined below, foreign goods to be utilized within the free trade zone or intended for sub- sequent reexport may be brought into Freeport by licensees of the Port Authority for the pur- poses of their business without payment of customs duties, excise taxes or other levies. Goods of foreign origin are subject to payment of customs duties if shipped from Freeport to other areas of the Bahama Islands. Goods leav- ing the free trade zone for foreign destinations are not subject to duties or excise taxes. Consumable stores on which customs duties must be paid are articles imported for the per- sonal use of any person or made available after importation for such personal use by sale, gift or any other means, whether or not the recipi- ent is employed or resides within the free trade zone. Goods eligible for free entry into Freeport include building materials and supplies, machin- ery, equipment and vehicles for use in construc- tion and operations within the zone and supplies necessary to the operation and administration of the zone as well as goods intended for stor- age, processing or reexport by licensees of the Grand Bahama Port Authority. Firms undertaking operations within the free trade zone must be licensed by the Grand Bahama Port Authority. With few exceptions, any type of business considered legal by the laws of the Bahama Islands may be licensed to operate in the free trade zone. Operations which are specifically authorized include storing, pro- cessing, manufacturing, exhibiting, repairing, Restrictions and Controls There are no unusual restrictions on the entry, handling or removal of merchandise. Businesses which may not be licensed by the Port Authority for customs-privileged opera- tions within the free trade zone are those en- gaged in the sale of alcoholic beverages, retail trade, and the operation of motion pic- ture theaters. Dutiable goods intended for re- tail sale within the free trade zone are liable to payment of duties prior to their release from storage. Facilities Available Open storage space encompasses about 100,- 000 square feet; covered storage space oper- ated by the Port Authority amounts to about 90,000 square feet. The Port Authority does not lease buildings to firms operating in the free trade zone, but under licensing agreements with the Port Authority, firms are permitted to construct such facilities as they may require. Bunkering facilities have been constructed at Freeport. Administering Authority The free trade zone at Freeport is adminis- tered by the Grand Bahama Port Authority, Ltd., a private corporation under contractual obligation to the Government of the Bahama Islands. The Port Authority is responsible for police, road traffic, schools, hospitals and other governmental services. Mailing Address: Grand Bahama Port Authority, Ltd. 200 Park Avenue New York, New York 10017 75 Grand Bahama Port Authority, Ltd. Freeport Grand Bahama, Bahama Islands Bermuda A free trade zone has been established at Freeport on Ireland Island. Bermuda is a British colony located in the Atlantic Ocean, approximately 570 miles east of the North Carolina coast. The colony is made up of numerous islands and islets of which about 20 are inhabited and interconnected by roads. The total land area of the group is about 21 square miles, and its population is about 50,000. Tourism is the principal economic ac- tivity. Free Trade Zone at Freeport, Ireland Island Location The free trade zone, called Freeport, is lo- cated on Ireland Island about 10 miles from Hamilton, the colony's principal port and pop- ulation center. It is connected with the main island and five other major islands of the group by a road network linked with bridges and causeways. Ferry service also connects Ireland Island with Hamilton. The free trade zone is served by a deep water harbor. Authorized Operations The authority for the establishment of the free trade zone is the Ireland Island Freeport Act of 1956. With the exception of "consumable goods," any goods may be imported into the free trade zone without payment of customs duties or taxes. Goods may be manufactured, processed, mixed, assembled, packaged and stored in the zone and exported to places outside the colony without payment of customs duties or taxes. Goods imported duty-free into the free trade zone become subject to duties if transferred into the customs territory of Bermuda. Firms must be licensed by the administer- ing authority to carry on business in the free trade zone. Firms operating in the zone under such license are exempt from taxes on real and personal property within the zone. Bermuda has no income taxes on earnings derived from op- erations. Companies pay only an exempted com- pany tax of £200 ($480) in Bermuda regardless of the amount of business transacted. Restrictions and Controls Consumable goods which are entered into the free trade zone are subject to customs duties and taxes. Such goods are defined as, "food, liquor, beverages, cigarettes, tobacco and other such goods imported for sale by retail or for consumption in the Freeport." Products or processes which may in any way contaminate the air or water or be offensive to the local population or injure the tourist trade are prohibited. Facilities Available The free trade zone covers approximately 100 acres. Space, whether open or covered, is avail- able to tenants on a lease basis only. Open stor- age space encompasses approximately 250,000 square feet. There are two buildings with about 25,000 square feet of floor space each and a number of smaller buildings each with 10,000 square feet or less of floor space available for use. There are also large areas of dock space, two deep water basins and cargo handling facilities. Administering Authority The free trade zone is administered by the Bermuda Crown Lands Corporation, which is wholly owned by the Government of Bermuda. Mailing Address: The Bermuda Crown Lands Corporation Mechanics Building Hamilton, Bermuda. 76 Brazil Brazil has a free port located at Man- aus; and six transit zones located at Belem, Corumba, Manaus, Paranagua, Porto Velho, and Santos. With a land area of 3.3 million square miles — almost one-half of the continent — and a population of about 87 million, Brazil is the largest and most populous country of South America. It is bordered on the east by 4,603 miles of Atlantic coastline, and to the north, east and south by every other South American country except Ecuador and Chile. The Amazon, and to a lesser extent other river systems, con- nect the interior with the coast, providing ap- proximately 27,000 miles of navigable inland waterways. For these reasons, Brazil's Atlantic ports function as important terminals for ocean commerce, while certain river ports and inland rail centers serve as convenient transshipment points for the trade of neighboring countries. Brazil is signatory to the General Agreement on Tariffs and Trade (GATT), and is a member of the Latin American Free Trade Association (LAFTA). Manaus Free Port Location The free port of Manaus is situated some 1,000 miles upstream from the Atlantic Ocean in the heart of the Amazon region. It covers a territory of some 4,600 square miles which in- cludes the city of Manaus on the banks of the River Negro about 12 miles north of the point where that river flows into the Amazon, and the adjacent area, extending some 31 miles up- stream and 37 miles downstream along the banks of the Negro and Amazon rivers. The city of Manaus and its surrounding area have a population of 200,000. Manaus is the capital of the State of Amazonas, the westernmost and largest of the Brazilian states. The port is the region's principal trading center and gathering point for the downstream shipment of hard- woods, balata and other tropical products. Al- though there are no railroads or arterial roads, river systems connect the port with Venezuela, Colombia and Peru as well as the eastern coast and intermediate points. Air carriers also, serve the city. Certain free port privileges have also been extended to the territories west and south of Manaus. Authorized Operations Legal sanction for a free trade zone at Man- aus has existed since 1957; this was renewed and extended into sanction for a free port by Decree-Law 288 of February 1967. The opera- tions of the free port are regulated by Decree 61,244 dated August 28, 1967 and extended by Decree 63,871 dated December 20, 1968. Goods of foreign origin may be entered into the free port without payment of customs duties, or other state, federal or local taxes on imports, with the exception of arms, ammuni- tion, passenger vehicles, tobacco, alcoholic bev- erages and perfume. Moreover, import licenses are not required. Foreign goods may be with- drawn from the free port for reexport or trans- shipment without the imposition of Brazilian customs duties. However, if such goods are withdrawn from the Manaus free port area for entry into non-free port areas of Brazil, cus- toms duties and taxes must be paid and com- pliance made with all other import regulations. Authorized operations for goods entered into the free port are warehousing, conservation and processing. In addition, assembly and manufac- turing operations are permitted. Capital goods entered into the free port for such purposes, as well as other materials and equipment, enjoy full customs duty and import tax exemption. Packaged and encased goods originating in the free port area must bear the marking Zona Franca de Manaus — Brasil (Free Port of Man- aus — Brazil) when in transit through Brazil. Commercial operations of any type allowed by the laws of Brazil including retail sale are per- mitted within the Manaus free port area. Restrictions and Controls Goods prohibited from entry into Brazil may not be entered into the free port. 77 Facilities Available Goods entering Manaus can be accommodated in warehouses belonging to the port administra- tion or private parties. Private parties may lease land for the construction of warehouses, offices and processing establishments. Administering Authority The free port of Manaus is administered by a Superintendent assisted by an Advisory Coun- cil comprised of representatives of the Federal Ministry of Finance, Ministry of Transport and Public Works, State Government of Amazonas, Commercial Association of Amazonas, and the Superintendency of the Amazon Economic De- velopment Plan. The free port and the advisory council operate under the general supervision of the Customs Division of the Ministry of Fin- ance. Mailing Address : Superintendente da Zona Franca de Manaus Manaus, Amazonas, Brazil Transit Zones The Brazilian tariff law provides that goods in transit through the national territory by the usual channels of international trade enroute to another country are exempt from the payment of import duties. Any sea or air port where federal customs officials are stationed may be used as, a transit zone for countries contiguous with Brazil. As a consequence, many Brazilian ports serve as transit zones although no special facilities have been created for transit ship- ments. In general, there is a 3-month maximum storage period for perishable goods and a 1-year period, extendable for another 6 months, for the storage of other goods. In addition, through bilateral agreements, six ports have been designated officially as transit zones for the trade of specified neighboring countries. They are as follows: Belem — for Bolivia and Peru: Belem, the ma- jor seaport in northeastern Brazil, connects western Bolivia and Peru with the Atlantic coast via the Amazon River system. Situated 70 miles from the sea on the Para river near the mouth of the Amazon, it is served by both ocean and river carriers, and functions as a transshipment point for onbound commerce. Although Belem has an international airport, river shipping is the principal means of trans- ferring goods to and from western points. There is no rail system connecting the city with Bo- livia and Peru, nor is direct road transportation feasible. Corumba — for Bolivia: Corumba is a border town in southwestern Brazil. It is the terminus of the Brazilian section of the railroad which connects the Atlantic port of Santos with the central Bolivian city of Santa Cruz. Highway transportation is also available as the Bolivian and Brazilian road systems connect at Corumba. Manaus — for Ecuador: See above. Paranagua — for Paraguay: Paranagua is a coastal port in southeastern Brazil. It affords direct highway transportation to Asuncion, Paraguay. Porto Velho — for Bolivia: Porto Velho is lo- cated in western Brazil near Bolivia's north- western border. It links this area with Brazil's northern Atlantic ports via the Amazon river system, and with Brazil's southeastern Atlan- tic ports by road networks. A short railroad, unconnected with other systems, extends from Porto Velho to the Bolivian border. Santos — for Bolivia and Paraguay: Santos is a major ocean port in southeastern Brazil. It affords Atlantic commerce direct rail transpor- tation to and from eastern Bolivia via the Brazilian border town and transit zone of Cor- umba. It also connects with Asuncion, Paraguay via road networks, or a combination of high- way-rail transportation. Santos is served by an international airport. Chile has free perimeter areas located in the northernmost and southernmost parts of the country. It also has two major transit zones for shipments to and from Bolivia in the ports of Arica and Antofagasta. 78 Chile, the seventh largest country in South America, extends 2,630 miles in a narrow rib- bon of land along the continent's Pacific coast. To the northwest it is bordered by Peru, to the northeast by Bolivia, and along its long, eastern boundary by Argentina. The country's popula- tion numbers approximately 9 million. Chile's lengthy, irregular Pacific coastline has facilitated the development of many ports which afford direct ocean transportation to most geographic regions of the country. In addi- tion, the northern ports serve as transit points for shipments to and from landlocked Bolivia. Chile's major cities of Santiago, Concepcion and Valparaiso are connected by air, rail and road networks which also link with the systems of neighboring countries. Coastal shipping is an important means of transportation among the cities of the Pacific seaboard. Chile is signatory to the General Agreement on Tariffs and Trade (GATT), and a member of the Latin American Free Trade Association (LAFTA). Northern Zone Free Perimeter (Arica) Location The northern zone free perimeter area ex- tends throughout the Province of Tarapaca, which is the northernmost province in Chile, bordering directly on Peru to the north and Bolivia to the east. Tarapaca is an arid, some- what isolated area with a sparse population numbering approximately 147,000 and a limited local economy. Its ports of entry, sometimes referred to as free ports, are Arica, Pisagua and Iquique on the Pacific coast. Arica, situated almost immediately adjacent to the Peruvian border, is the principal center of economic and commercial activity within the province, as well as the site of most free perimeter operations. In addition to commerce, the more important economic activities are fishmeal processing, light manufacturing and assembly of appliances and automobiles from imported components. The port of Arica also serves as a transit zone for and gateway to Bolivia, and one of its im- portant functions is the export of Bolivian mineral ores. A railroad extends east from the city through the mining areas to the Bolivian capital of La Paz. A shorter rail line runs north to the town of Tacna, Peru. Coastal shipping is the most common means of carrying goods be- tween this area and southern Chile, although the completed portion of the Pan American Highway which run through Tarapaca may also be used. Although the Province of Tarapaca is the principal area in the northern zone free perime- ter, certain limited customs privileges are also accorded to the ports of Taltal in Antofagasta Province, south of Tarapaca, and Chanaral in Atacama Province, south of Antofagasta. Authorized Operations The port of Arica in Tarapaca was given its customs-privileged status by Decree (DFL) 303 of 1953 which had as its purpose the promotion of industry in the northern region. Accordingly, the customs treatment of imported goods varies considerably, depending on their category; how- ever, the Province offers certain advantages similar to those of free ports and free perime- ters elsewhere in the world. Most goods enter- ing Arica are processed or assembled there for subsequent shipment into the mainstream of the Chilean economy. The free perimeter offers special advantages in the case of three classes of imports. First, many types of merchandise which, for the pur- pose of foreign exchange conservation, are not permitted entry into other parts of Chile may be imported into the free perimeter. Such goods — luxury items — brought into the free pe- rimeter are subject to full payment of customs duties plus 200 percent of the CIF value. Sec- ond, goods which are normally permitted entry into Chile benefit in Arica by exemption from prior import deposit requirements, although the regular basic duties are assessed in full. The third category is composed of specified goods on which all customs duties and import taxes are waived. It includes foodstuffs, construc- tion materials, most types of machinery, trucks, fuel, automobile parts, raw materials, and those commodities used in mining, fishmeal produc- tion, agriculture or in the establishment or operation of regular industry. Ports within the free perimeter other than Arica have differing specified privileged import categories. 79 In general, goods obtaining these special ex- emptions may not be shipped to the rest of Chile unless they have first been processed or assembled. In such case they are subject, de- pending on type, to payment of 50 percent or 75 percent of the regular customs duties. In the case of goods receiving 50 percent off regular customs duties and taxes there must be no pro- duction of the goods elsewhere in the country. In the second instance, where 75 percent is deductible from regular duties and taxes, the local production in Chile must be insufficient to meet demand. The Ministry of Economy must certify to facts in both situations. All imports of items involved in these two related situations are exempt from normal deposits, prohibitions and other restrictions applicable elsewhere in Chile. The more important operations authorized for the zone are: assembly of appliances and automobiles, light manufacturing, fishmeal production, and minerals exportation. Restrictions and Controls See above. Facilities Available For detailed information on facilities avail- able in Arica, inquiries should be addressed to the Arica Development Board (see below). Administering Authority The free perimeter in Tarapaca Province is legally administered by a Governor appointed by the President of Chile and directly respon- sible to the Ministry of Interior. Operations in Arica are controlled by the Arica Development Board. Mailing Address: Junta de Adelanto de Arica (Arica Development Board) Casilla 14-D Arica, Chile Information on the northern zone may also be obtained from: Servicio de Aduanas (Customs Department) Ministerio de Hacienda (Ministry of Finance) Teatinos-Moneda — Piso 12 Santiago, Chile Departamento de Comercio (Commerce Department) Ministerio de Economia, Fomento y Reconstruccion (Ministry of Economy) Teatinos-Moneda — Piso 10 Santiago, Chile Southern Zone Free Perimeter (Chiloe, Aysen and Magallanes) Location Chiloe, Aysen and Magallanes are the three southernmost provinces in Chile. They are among the more remote and underdeveloped areas of the country, having among them about 3 percent of the population (233,000) in more than 33 percent of the area of Chile and being devoted largely to agriculture, sheep and cattle raising, mining, fishing, logging, and more recently, petroleum exploration and production. There are two ports of entry for the free perimeter area — Castro in the Province of Chiloe, and Punta Arenas in the Province of Magallanes. Castro is accessible from the north- ern port city of Puerto Montt by a combina- tion of road and rail. Punta Arenas, located near the western end of the Strait of Magellan, is a port in its own right. A road connects this port with the southern Argentinian city of Santa Cruz. Between and among the three prov- inces, coastal shipping is the major means of transportation. Authorized Operations These provinces were established as a cus- toms-privileged area by Law 12,008 of 1956, which had as its goal the stimulation of eco- nomic growth and the promotion of industrial development within the region. Under a recent law involving the Provinces of Magallanes, Chiloe and Aysen — 16,813 of May 1968 — the following merchandise is ex- 80 empt from all duties and taxes: foodstuffs, cattle, essential clothing and shoes, chassis, parts and vehicles for public carriers, industrial equipment and finished and raw materials of all types needed for or used in connection with establishing local industries, especially fishing and mining. Imports of other goods which are restricted from entry into other parts of Chile may be entered into this zone subject to quota alloca- tion, established yearly as a percentage of the zone's exports. Such imports, however, are sub- ject to payment of full import duties, but free of prior deposit requirements. In addition to retail trade, operations auth- orized for the perimeter include assembly, manufacturing and mining. Restrictions and Controls See above. Facilities Available For information concerning facilities, in- quiries should be addressed to the administer- ing authority (see below) . Administering Authority Operations are under the direct control of the national Government, and administered by the customs authorities in the respective ports. Mailing Address : The authorities responsible for the adminis- tration of the ports of entry to the southern zone free perimeter are as follows: Administrador de Aduanas (Customs Administrator) Castro, Chile Administrador de Aduanas (Customs Administrator) Punta Arenas, Chile Detailed information on the zone may also be obtained from: Servicio de Aduanas (Customs Department) Ministerio de Hacienda (Ministry of Finance) Teatinos-Moneda- Santiago, Chile -Piso 12 Departamento de Comercio (Commerce Department) Ministerio de Economia, Fomento y Reconstruccion (Ministry of Economy) Teatinos-Moneda — Piso 10 Santiago, Chile Transit Zones According to terms of a Transport Conven- tion signed by Bolivia and Chile in 1937, Bo- livia is given free access to Chilean ports for purposes of international commerce. Such tran- sit shipments are not subject to payment of Chilean customs duties or other taxes. At present, however, Arica and Antofagasta are the principal ports used for this purpose. Arica — See above. Antofagasta — Antofagasta is a major port on Chile's Pacific coastline, and functions as a major transit point for Bolivian commerce. Re- cently, its facilities have been extended to Paraguay as well. It has rail connections with a number of points in eastern Bolivia, and ship- ments may be routed directly by rail to either La Paz or Sucre. Goods destined for Paraguay may be routed overland by rail transiting Ar- gentina. Antofagasta is also served by an inter- national airport. Colombia Colombia has established a free trade zone at Barranquilla, two free ports on San Andres and Providencia Islands, and a limited free perimeter area in Amazonas. Colombia, the fourth largest country in South America, is located in the northwestern corner of the continent, entirely within the tropics. It has a Caribbean coastline to the north, and a Pacific coastline to the west. It has land bor- ders with Panama to the north, Venezuela to 81 the east, Brazil to the southeast, Peru to the south, and Ecuador to the southwest. The coun- try has a land area of 440,500 square miles, in- cluding a number of islands in the Caribbean and Pacific, and a population of approximately 18.5 million. Agriculture is Colombia's major economic activity; coffee is the country's prin- cipal export, accounting for about two-thirds of total foreign exchange earnings. Colombia is a member of the Latin American Free Trade Association (LAFTA). A 22,000-mile road system links population centers in the country and is a principal means of inland transport. It is supplemented by rail and inland waterway systems as well as domes- tic air transport. Most international commerce is routed through the ports of Buenaventura on the Pacific coast, or the Caribbean ports of Barranquilla, Santa Marta and Cartagena. The Pan American Highway system crosses Colom- bia, linking it with Ecuador and Venezuela. Eastern Colombia is accessible from Venezuela via the Orinoco river system, and the south- eastern portion of the country is accessible from Brazil via the Amazon river system. There are no railway connections with the railways of neighboring countries. Free Trade Zone at Barranquilla Location The free trade zone is located in the port of Barranquilla on the Magdalena River — Colom- bia's principal inland waterway — at a point approximately 13 miles from the Caribbean. Barranquilla is one of the country's three lead- ing ports, receiving both ocean traffic from abroad and river traffic from the interior, as well as a major industrial and distribution cen- ter. It has a population in excess of 400,000. In addition to the Magdalena River, which in its 1,025-mile course connects the port with the economic heartland of the country located be- tween the mountain ranges of the west, Bar- ranquilla offers overland transportation via trunk highways to most important inland cities such as Bogota, the capital, Medellin, and Cali, and beyond to link with the road systems of Ecuador and Venezuela. Airlines also serve the city. Although the rail system does not extend to Barranquilla, it does connect at several in- land points with road and river transportation serving the city. Authorized Operations The establishment of the free trade zone at Barranquilla was authorized by Law 105 of 1958. Actual operations began in 1964. With the exception of prohibited goods (see Restrictions and Controls, below), all kinds of merchandise, products, raw materials, packing materials and other commercial items, whether of foreign or Colombian origin, may be brought into the zone, stored there, or processed without payment of customs duties, export duties or other tax levies of any nature. Goods of foreign origin if subsequently reexported remain free of all such duties, while goods of Colombian origin become subject to payment of export duties (if applicable) upon exportation. Goods of foreign origin may be withdrawn from the zone for consumption or use in Colombia upon procurement of an import license and payment of customs duties and other applicable taxes. In the case of goods manufactured in the zone for use in Colombia, duties and taxes are paid only upon the imported components used. Merchan- dise in transit is exempt from all duties and taxes. The operations authorized within the zone in- clude storage, exhibiting, packing and unpack- ing, manufacturing, packaging, assembling, re- fining, and blending. In general, any type of processing may be undertaken on goods entered into the zone. Prior permission of the adminis- tering authority must be obtained before firms may establish operations in the zone. Firms operating within the zone are subject to Colom- bian income taxes and laws regulating indus- trial activity. Restrictions and Controls Unless specifically authorized by the national government, explosives, inflammable materials, firearms and weapons, as well as other articles that may be specified in the regulations of the zone, are prohibited entry. Retail business is not permitted. 82 Facilities Available Authorized Operations The free trade zone has a total area of over 220 acres, of which more than one-half has been designated for use as sites for major in- dustry. The remainder is reserved for ware- houses and small industry. The initial area of operations is, however, considerably smaller. Warehouses operated by the administering au- thority have a total of about 90,000 square feet of storage space. There is also a substantial amount of privately-owned warehouse space. Buildings for offices, warehouses, or fac- tories, if available, may be rented from the administering authority or may be construct- ed by private persons or legal entities on land leased from the administering authority. At the present time the owner of merchandise stored in the zone must make his own arrange- ments for transportation and handling within the confines of the zone. Administering Authority The Free Industrial and Commercial Zone at Barranquilla (Zona Franca Industrial y Com- ertial de Barranquilla) is a non-profit, autono- mous public establishment. It is administered by a Board of Directors and a Manager sub- ject to the supervision and control of the Comp- troller General of the Republic of Colombia. Mailing Address : Zona Franca Industrial y Comercial de Barranquilla Apartado Aereo 2088 Barranquilla, Colombia Free Ports on San Andres and Providencia Islands Location San Andres and Providencia Islands are the most important of Colombia's insular terri- tories. They are situated in the Caribbean more than 430 miles northwest of the Colombian coast and about 130 miles east of Nicaragua. They are isolated from and less developed than the mainstream of the Colombian economy. The free port facilities are of limited importance to international traders. Goods may be imported freely into these is- lands, subject only to a tax of 10 percent of the CIF value. Subsequent shipment to the main- land is restricted to those goods imported by Colombian travelers who remain in the islands for a specified period of time. Maximum values and quantities are established by the Colom- bian authorities. Recently, there have been indications that Colombia is considering modi- fying the status of the free ports. Administering Authority and Mailing Address: Intendente (Governor) de San Andres y Providencia San Andres Island, Colombia Free Perimeter in Amazonas Location Amazonas is a comisaria (territory) located in the southwestern portion of the country. It is bordered directly by Peru on the west and Brazil on the south and east. It is an isolated and sparsely populated area, served neither by trunk highway nor rail. Authorized Operations The Amazonas free perimeter in Colombia is part of a larger free perimeter area officially known as the Zona Libre de la Amazonia Inter- national (International Free Zone of the Ama- zon) which was established by joint agreement of the governments of Colombia and Peru, for the benefit of the remote Amazon territories of the two countries. Raw materials and capital goods of foreign origin to be used in the terri- tory for its development may be entered free of customs duties. If re-shipped to other areas of Colombia, such goods become subject to normal customs duties. The only Colombian port of en- try for this area is Leticia, a river port on the Amazon river. Administering Authority The special tariff arrangements of the Co- lombian section of the free perimeter area are 83 administered under the direct control of the Bureau of Customs of the Government of Co- lombia (Direction General de Aduanas). Mailing Address: Direccion General de Aduanas Carrera 12, No. 15025 Bogota, Colombia Capitania del Puerto de Leticia (Leticia Port Authority) Leticia, Colombia Mexico Free trade zones in Mexico have been established at Coatzacoalcos (Puerto Mexico) and Salina Cruz. Limited free perimeter areas are located in Baja California, northwest Sonora and the Territory of Quintana Roo, and limited free perimeter areas sur- round other major Mexican towns and cities along the border with the United States. Mexico is the third largest republic of Latin America. It has a land area of 761,600 square miles and a population of 46 million. It is bor- dered to the north by the United States, adjoin- ing the States of Texas, New Mexico, Arizona and California. It is bordered to the southeast by British Honduras and to the south and southwest by Guatemala. To the west, Mexico has a Pacific coastline of 4,100 miles, and to the east, a coastline of 1,600 miles along the Gulf of Mexico and the Caribbean Sea. Mexico has a well-developed transportation system. There are 14,500 miles of railroad track which connect at several border points with U.S. railroads. There is an all-weather road network of 38,600 miles which links with the road systems of the United States and Cen- tral America. Air transportation is provided by many airlines of which 20 provide inter- national service. Two Mexican shipping compa- nies and a number of foreign carriers provide service for international seaborne commerce. It has been estimated that two-thirds of Mexi- co's imports are carried by truck and rail, how- ever, and that the greater part of the country's internal distribution is by truck. Mexico partic- ipates in the Latin American Free Trade As- sociation (LAFTA). The authority for the establishment of the free trade zones is the "Law of the Free Ports" (Ley de Puertos Libres Mexicanos), promulgated in 1946. This law ordered the cre- ation of free trade zone facilities at Coatza- coalcos (Puerto Mexico), Salina Cruz, Matias Romero and Topolombampo, but only the first two have actually entered into operation. Be- cause of the title of the law these facilities are frequently called "free ports." Free Trade Zone at Coatzacoalcos Location Coatzacoalcos, also called Puerto Mexico, is located in Veracruz State in southeastern Mex- ico facing the Bay of Campeche, over 300 miles southeast of Mexico City. It is situated south of the port city of Veracruz and at the eastern end of the Tehuantepec isthmus, Mexico's nar- rowest point. It is approximately 190 miles across the isthmus from Coatzacoalcos to Sa- lina Cruz, its Pacific terminus. (See section on free trade zone at Salina Cruz, following.) Coatzacoalcos has a population of about 50,000 and the State of Veracruz a population of about 3.1 million. Petrochemical and sulfur extrac- tion industries are located in the area, although it is also an important agricultural region in which a number of tropical and sub-tropical products are cultivated. Coatzacoalcos and Salina Cruz are connected by trans-isthmian railroad and highway. The railroad links with a north-south rail line, affording transportation to Veracruz, Mexico City and other points. Coatzacoalcos is also the terminus for a southeastern railroad line serv- ing the Yucatan peninsula. Overland highway transportation to Mexico's major population centers and to Central America is also available. Authorized Operations Goods of foreign origin may enter the free trade zone without payment of customs duties ; such duties are levied, however, if the goods are subsequently imported into the customs territory of Mexico. In the case of goods man- 84 ufactured within the zone and entered into Mexican customs teritory, duties are assessed according to the amount of foreign raw materi- al used in their manufacture. Operations authorized within the free trade zone include loading, unloading, storing, sam- pling, mixing, exhibiting, blending, packaging, processing, repacking and manufacturing. Restrictions and Controls Arms and ammunition may not be imported into or manufactured within the free trade zone without prior permission of the Mexican Government. Facilities Available The free trade zone at Coatzacoalcos has three warehouses affording 129,000 square feet of storage space. Open storage space is ample. No facilities for processing operations have been made available; however, land may be leased from the Mexican Government for the construction of facilities. No entire buildings are available for lease for storage purposes. the State of Oaxaca, in which it is located, has a population of about 1.8 million. Salina Cruz is primarily a fishing port. Its surrounding area is agricultural, although because of some nearby archeological sites, tourism is being developed. Salina Cruz lies south of the port and re- sort area of Acapulco, and more than 300 miles south of Mexico City. It is connected with Coat- zacoalcos on the Gulf coast by both road and railroad. Rail transportation also runs south to the Guatemalan border. Highways extend both north to Mexico City and south to link with systems of Central America. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Coatzacoalcos. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Coatzacoalcos. Facilities Available Administering Authority The free trade zone is administered locally by a Superintendencia del Puerto Libre (Superin- tendency of the Free Port), and nationally by the Puertos Libres Mexicanos (Directorate of the Mexican Free Ports) , an autonomous agen- cy of the Government of Mexico. Mailing Address : Superintendencia del Puerto Libre Coatzacoalcos, Mexico Puertos Libres Mexicanos Cuernavaca 5-1 Mexico, D. F., Mexico Free Trade Zone at Salina Cruz Location Salina Cruz is situated on the western side of the Isthmus of Tehuantepec, facing the Pa- cific Ocean. Its population is about 10,000 and The facilities are the same as those described under this heading in the summary of the free trade zone at Coatzacoalcos. Administering Authority See section under this heading in the sum- mary of the free trade zone at Coatzacoalcos. Mailing Address : Superintendencia del Puerto Libre Salina Cruz Oaxaca, Mexico Puertos Libres Mexicanos Cuernavaca 5-1 Mexico, D.F., Mexico Free Perimeters in Baja California, Sonora and Quintana Roo (Mexican free perimeter areas are some- times referred to as "free zones.") 85 Location Baja California — The entire peninsula of Lower California is a limited free perimeter area. The peninsula comprises both the State of Baja California and the Territory of Baja Cali- fornia. It lies between the Gulf of California on the east, and the Pacific Ocean on the west. It is bordered to the north by the State of California. The peninsula has a population of about 1 million. The ports of entry for the free perimeter are Ensenada, La Paz, Los Algo- dones, Mexicali, Santa Rosalia, Tecate, Tijuana and San Jose Del Cabo. Sonora — The Mexican State of Sonora has three limited free perimeter areas immediately adjacent to the Arizona border. They are: So- nora's northwestern tip, including the ports of entry of San Luis Rio Colorado and Sonoyta; the city of Nogales and surrounding area, oppo- site Nogales, Arizona; and the city of Agua Prieta and surrounding area, opposite Douglas, Arizona. Quintana Roo — The Territory of Quintana Roo on the Yucatan peninsula has several lim- ited free perimeter areas with ports of entry facing on the Caribbean Sea. They include two islands, Isla Mujeres and Cozumel; and two cities on the mainland, Xcalak and Chetumal. Authorized Operations The free perimeters are primarily consump- tion zones, remote from the mainstream of the Mexican economy and isolated from it by a relatiye lack of transportation and communi- cations facilities. For this reason, the Govern- ment of Mexico has authorized special import privileges for the areas. These import privi- leges exempt only specified goods from the pay- ment of customs duties and import licensing requirements. The number and kind of privi- leged imports vary from one free perimeter area to another. No list of privileged imports exists, but rather a list of items not considered exempt is maintained by the Mexican authori- ties. In general, the number of items for which special import privileges are granted is being reduced as domestic production is increased and more transportation facilities are devel- oped. Privileged goods of foreign origin re- moved from the free perimeter areas into other regions of Mexico are subject to payment of full customs duties and compliance with import licensing requirements. In addition to imports for comsumption, op- erations authorized within the free perimeter areas include unloading, storing, sampling, mixing, exhibiting, blending, packaging, pro- cessing and manufacturing. All operations must be approved by the General Customs Ad- ministration in Mexico City. Restrictions and Controls The importation or manufacture of arms and ammunition must be approved by the Govern- ment of Mexico. The items eligible for free perimeter import privileges are subject to fre- quent change. Facilities Available Privately-owned storage space is available in many perimeter areas. Official warehouses are located at Mexicali, Tecate, Tijuana, La Paz, Ensenada and in Quintana Roo. Administering Authority The free perimeter facilities in the cities of Chetumal, Cozumel, Isla Mujeres and Xcalak in the Territory of Quintana Roo, and in the cities of Nogales and Agua Prieta in the State of Sonora, are administered locally by the Aduana Fronteriza (Office of Border Customs). The ports of entry and free perimeter areas in northwestern Sonora, San Luis Rio Colorado and Sonoyta, and in Baja California, are ad- ministered locally by an Administrador de la Aduana (Administrator of Customs). Each of these offices is responsible to the General Cus- toms Administration in Mexico City. Mailing Address: Direccion General de Aduanas (General Customs Administration) Palacio Nacional Mexico, D.F., Mexico 86 Netherlands Antilles The Netherlands Antilles has two free trade zones located on the islands of Aruba and Curacao. The Netherlands Antilles comprises two groups of islands lying at opposite sides of the Caribbean Sea about 500 miles apart. The larg- er and economically more important group is made up of the islands of Aruba, Bonaire and Curacao which lie some 15 to 70 miles from the coast of Venezuela. The other group is made up of the islands of St. Eustatius, Saba and the southern half of the island of St. Maarten (the northern half being the French St. Mar- tin) in the Leeward Islands chain. The total land area of the Netherlands Antilles is about 380 square miles and total population is about 200,000. The economy is based largely on the oil refineries of Aruba and Curacao which process petroleum imported mostly from Vene- zuela. Almost all products required for pro- duction and consumption in the Netherlands Antilles must be imported. The Netherlands Antilles is an integral part of the Kingdom of the Netherlands, but has a considerable amount of autonomy for internal affairs. The Antilles is an associate member of the European Economic Community (EEC or "Common Market"), and goods produced in the Antilles which meet the EEC's origin require- ments are allowed unrestricted and duty-free entrance into the EEC. The authority for the establishment of free trade zones on Netherlands Antilles territory is the "National Ordinance on Free Zones" of 1956. Free Trade Zone on Aruba Location The free trade zone is located in the harbor of Oranjestad, the main port and capital of Aruba. Oranjestad is situated at the southwest- ern end of the island which has a total land area of about 71 square miles and a population of about 60,000. Aruba lies 50 miles west of Curacao and 15 miles north of the Venezuelan coast. Its location gives it access to a number of shipping lanes and air routes connecting Eu- rope and the United States with the Panama Canal and the ports of the Caribbean and Cen- tral America. Aruba's principal indusry is pe- troleum refining. There is also a petrochemical company. Authorized Operations Goods may be imported into the free trade zone without payment of customs duties or ex- cise taxes. Such charges, however, become pay- able if goods are transferred from the zone into the customs territory of the Netherlands An- tilles. Goods exported from the free trade zone to places abroad are not subject to export duties or to excise taxes. Within the free trade zone goods may be stored, packed, handled, manufactured, exhib- ited and taken out of bond. Firms operating within the free trade zone are accorded substantial tax incentives. For a period extending until 1981, the profits tax lev- ied on businesses established within the free trade zone (excluding such earnings as may be derived from sales to the domestic market) is reduced to one-third of the normal tax rate. In addition, industrial enterprises meeting the criteria of the "National Ordinance for the Promotion of Industrial Establishment and Ho- tel Construction" of 1953 may qualify for a 10- year tax holiday with respect to the profits tax, income taxes on dividends and certain other taxes. The principal requirements set forth are that the enterprise must be an industry not existing in the Netherlands Antilles on Janu- ary 1, 1948, and that a minimum investment equivalent to $53,500 or the employment of at least 10 persons be undertaken. Restrictions and Controls Use of the free trade zone is restricted to limited liability corporations established under Netherlands Antillean law. An exception to this rule may be granted by the Governor of the Netherlands Antilles. These companies must operate exclusively in the zone and must con- tribute to making the Netherlands Antilles an 87 international distributing center. Free trade zone regulations require that goods brought into the zone and stored there without being packed, assembled, or otherwise processed must be traded principally with other countries. Entry into the zone of the following items is prohibited: absinthe, printed matter copyright- ed in the Kingdom of the Netherlands, coins, certain explosives, arms and ammunition, and certain species of animals. Narcotics are sub- ject to special restrictions. Facilities Available The free trade zone consists of 40 acres of land adjacent to the Oranjestad harbor. Stor- age facilities may be built by the tenant or by the Government at the tenant's request and leased. Land within the free trade zone is made available on a ground-rent basis. Administering Authority The zone is under the direct control of the Island Government of Aruba. Mailing Address : Netherlands Antilles Economic Mission 866 United Nations Plaza New York, New York 10017 Department of Economic Development Oranjestad Aruba, Netherlands Antilles For special permission to operate in the free trade zone, foreign companies should apply to: Governor of the Netherlands Antilles Fort Amsterdam Curacao, Netherlands Antilles Free Trade Zone on Curacao Location The free trade zone is situated in the Wil- lemstad harbor on Curacao, the principal is- land of the Netherlands Antilles. Willemstad is the largest city and the capital of the Neth- erlands Antilles. The free trade zone is less than 3 miles from the center of the city of Wil- lemstad and 8 miles from the airport. Curacao, centrally located in the Caribbean area, occu- pies a position of importance as a transit port and an international center of trade and dis- tribution. Curacao lies about 38 miles north of the Venezuelan coast. There are regular con- nections by sea with Western Europe, the Unit- ed States, and the Latin American countries. The island has a road system interconnecting the city of Willemstad, the harbor area, and the airport. Curacao has an area of 179 square miles and a population of 137,000. Its principal in- dustry is petroleum refining. Other important operations include phosphate mining, and dry- dock and ship repair works, and electronic com- ponent manufacture. Authorized Operations See section under this heading in the sum- mary of the free trade zone on Aruba. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone on Aruba. Facilities Available Total land area consists of 18.5 acres ad- jacent to the harbor. Covered storage space presently amounts to 123,000 square feet. Addi- tional covered storage is to be provided. Land is available for lease to any concern wishing to construct its own facilities. There is established within the free trade zone a private company which will transact business in behalf of foreign firms that do not wish to undertake direct activities in the zone. This company offers such services as receiving shipments, clearing them into the free trade zone, storing the merchandise in its own ware- houses, processing, packing, sorting, keeping stock control of goods, marking, repacking, and reexporting, as directed by its clients. Infor- mation about this firm may be obtained from the Insular Service for Economic Affairs, Scharlooweg 160, Curacao, Netherlands Antilles. 88 Administering Authority The free trade zone is under the direct con- trol of the Island Government of Curacao. Mailing Address : Netherlands Antilles Economic Mission 866 United Nations Plaza New York, New York 10017 Manager, Industrial Promotion Division Insular Service for Economic Affairs Scharlooweg 160 Curacao, Netherlands Antilles For special permission to operate in the free trade zone, foreign companies should apply to: Governor of the Netherlands Antilles Fort Amsterdam Curacao, Netherlands Antilles Panama has a free trade zone located at Colon. Because of its geographic position at the crossroads of two oceans and two continents, Panama is an important transportation center. It is served by most major international ship- ping lines as well as a number of international airlines. In addition, it has access to short-range coastal shipping serving the Caribbean, Central America, and the northern countries of South America. Shipping is the primary means of in- ternational freight transport. Panama also is linked with Costa Rica via the Pan American Highway, which runs along the southern (Pa- cific) portion of the country. Panama City and Colon are connected by a good all-weather high- way and a railroad operated by the Panama Canal Company. The Republic of Panama has a population estimated at 1.3 million. The largest source of Panama's income derives from services, includ- ing earnings of Panamanian citizens employed in the Canal Zone. Otherwise, Panama may be regarded as basically an agricultural country, although its manufacturing and commercial sectors are growing in importance. No exchange controls or restrictions exist in Panama. U.S. currency circulates freely in the country as legal tender. No Panamanian paper currency is in circulation. Panamanian and U.S. coins circulate freely. Free Trade Zone at Colon Location The free trade zone is located in Colon, a city of 80,000, situated at the Caribbean entrance to the Panama Canal. Because of its strategic position at the junction of major shipping and air routes, the Colon Free Zone functions pri- marily as a transfer point, warehousing, manu- facturing and regional sales center. The free trade zone is served by deep water facilities about one-half mile away in the port of Cristobal, within the U.S.-administered Canal Zone. Goods are trucked between the free trade zone and the port. The Colon Free Zone also is served by Tocumen International Airport, outside Panama City and about 50 miles from Colon, with which it is linked by highway. Tocumen Airport is authorized to serve as a duty free depot for air cargo to and from the Colon Free Zone. Shipments from Colon to the Pacific side of Panama are sent by truck, ship, or rail, depending upon the na- ture of the merchandise. Authorized Operations The Colon Free Zone was created by Decree Law No. 18 of 1948. Actual operations began in 1953. Goods of any origin, including machinery and raw materials, may enter the free trade zone without payment of customs duties or taxes of any kind, including consular fees. Generally, merchandise leaving the free trade zone may be consumed in the Canal Zone, transshipped, or exported to a foreign country free of duties or taxes. The only exceptions are products of Panama subject to export duties, or products manufactured within the free trade zone which contain Panamanian raw materials ordinarily subject to export duties. Goods passing into the customs territory of Panama from the free trade zone are subject to the same customs reg- 89 ulations, duties, and fees as merchandise com- ing from a foreign country. The following operations are permitted with- in the free trade zone: storing, exhibiting, packing, manufacturing, bottling, processing, assembling, labeling, sorting, refining, mixing, and, in general, performing operations with and handling all kinds of merchandise, products, raw materials, containers, and other articles of commerce, except those which are prohibited by law from entry into Panama (see Restrictions and Controls, below) . The administration of the free trade zone handles operations connected with the distribu- tion of goods, e.g., storing, assembling, labeling, freight forwarding, and other services, for firms wishing to use the zone without setting up their own establishments within the zone. In addition, several management companies furnish these services to firms using the zone. Wholesale firms operating in the zone may have sales showrooms in which representative stock may be displayed. With the exception of income and social se- curity taxes, commercial operations carried on in the free trade zone are exempt from national, municipal, or local community taxes, fees, or dues. Firms in the zone engaged in reexporting goods to another country are exempt from 90 percent of the regular Panamanian income tax with respect to income derived from sales of merchandise reexported from the free trade zone to countries other than Panama. Manufac- turing operations established within the Colon Free Zone, and elsewhere in the Republic, may also qualify for income tax exemption and other fiscal incentives under Panamanian investment law. There are no Panamanian taxes on invested capital, dividends or remittances abroad, nor is there any tax on capital gains when the prop- erty or securities sold have been owned over two years. Restrictions and Controls The importation into the free trade zone of explosives or inflammable materials, arms and ammunition, narcotics, and certain other goods prohibited by law from entry into Panama, is prohibited. Certain of these materials, how- ever, may be imported and stored in specified segregated areas within the free trade zone with the approval of the Fire Department and with a special permit issued by the appropriate ministry of the Government of Panama. Retail trade within the free trade zone is prohibited. Facilities Available The zone is located on about 100 acres of land. A program is underway to enlarge its area. Although no portion of the free trade zone has been designated as open storage space, ar- rangements may be made for reasonable re- quirements, depending on the duration of the contract between the importer and the admin- istering authority or the warehouse operator. The free trade zone has nearly 60 buildings. The greater number are owned by the free trade zone administration and usually leased on a 20- year basis. However, many buildings are priv- ately-owned. The zone contains installations for the warehousing and processing of almost every kind of goods. A firm may enter into contracts for the lease of whole buildings or for space as needed in buildings. Leases are ordinarily made for periods of 1 to 20 years. However, customers having irregular stock or whose volume does not warrant leasing permanent space may keep their goods in public warehouses owned and operated by the free trade zone or in privately- operated bonded warehouses. Companies using the free trade zone may have buildings con- structed in the zone to meet their own specifi- cations after entering into a contract with the administering authority. The size of a building and special conveniences, such as air condition- ing, cold storage facilities, or humidity control are determined by the contractual conditions agreed to by the Free Zone Technical Depart- ment and the firm. A "typical" or "basic" building has 2,000 square feet of floor space and is constructed by zone authorities with either a reinforced concrete frame or a steel frame. Firms may also construct their own warehouses or plants on land leased from the free trade zone. Administering Authority The free trade zone operates as an autono- mous agency of the Government of Panama. It is administered by a manager appointed by the 90 President of Panama and a board of directors comprised mainly of businessmen active in Panama. Mailing Address: Office of the Colon Free Zone 405 Park Avenue New York, New York 10022 The Manager Colon Free Zone P.O. Box 1118 Colon, Republic of Panama Paraguay Paraguay has established limited transit zone facilities at Concepcion and Encarnacion (for Brazil only), at Asuncion (for the Federal Republic of Germany and Spain), and at Villeta (for Spain only). Paraguay, a land-locked country of 157,000 square miles and two million people, is located in central South America. It is bordered on the south, southwest and west by Argentina, on the northwest by Bolivia, and on the east and northeast by Brazil. Paraguay's major commercial artery and outlet to the sea is the Paraguay-Parana river system which connects it with downstream Ar- gentine ports and thereby with the shipping lanes of the Atlantic. Although shallow-draft ocean vessels can sometimes navigate the river as far north as the capital city of Asuncion, about 1,000 miles from the sea, most traffic con- sists of river craft. Normally, Paraguay's for- eign trade is transshipped through Argentine ports. A network of highways connecting with the road systems of neighboring countries is being developed and expanded. One of these roads, an east-west route termed the "Brazil Road," affords a means of direct overland transportation between Asuncion and the Bra- zilian port city of Paranagua on the Atlantic. (See section on Brazil.) In addition, a single track railroad runs from Asuncion to Encarna- cion, a city on the Parana river directly across from Posada, Argentina. The rail systems of the two countries are linked at this point by ferry service. International air carriers also serve Asuncion. Paraguay is a member of the Latin Ameri- can Free Trade Association (LAFTA). Mailing Address: Information about authorized operations, fa- cilities, restrictions and charges in Paraguayan transit zones may be obtained from: Presidente de la Administracion Nacional de Navegacion y Puertos (President, National Port Administration) Puerto de la Capital Asuncion, Paraguay Peru Peru has established a free perimeter area in its eastern Amazon region. It also has transit zone facilities in the ports of Matarani and Mollendo for shipments destined to and from Bo- livia. Peru occupies the central section of the west coast of South America with a Pacific coastline of approximately 1,400 miles. The country, which straddles the Andes, has a total land area of about 496,000 square miles and a popu- lation of about 12.4 million. To the northwest, Peru is bordered by Ecuador, to the north by Colombia, to the east by Brazil, to the south- east by Bolivia, and to the south by Chile. Peru produces and exports approximately 60 percent of the world's fishmeal production. Also important in its economy are agriculture and mining. Major exports include cotton, sugar, copper and iron. Peru is signatory to the Gen- eral Agreement on Tariffs and Trade (GATT) and is a member of the Latin American Free Trade Association (LAFTA). Callao, on the Pacific coast, is Peru's prin- cipal port of entry for international shipments. Inland transport is provided by 2,600 miles of railroads and 25,700 miles of roads. In eastern Peru, rivers and Lake Titicaca are important means of transportation. 91 Free Perimeter in Eastern Peru Location The Departments of Loreto, Madre de Dios, San Martin and Amazonas have been accorded free perimeter status; they are located in the remote Selva or jungle lowlands region of east- ern Peru. Most categories of goods intended for use within the region may be imported sub- ject to reduced customs duties. Shipments to and from this region usually are routed through Brazil via the Amazon River. Iquitos is the principal Peruvian port of entry for the region. Distribution of goods within the free perimeter area takes place mainly through wa- ter transport, principally on tributaries of the Amazon. Transit Zone Facilities at Matarani and Mollendo Location The port cities of Matarani and Mollendo on the Pacific coast are among Peru's southern ports. Rail transportation links them with the southeastern interior town of Puno on the shores of Lake Titicaca. At Puno, goods are loaded on lake steamers for shipment to Bo- livia. Roads also link the ports with points on the Bolivian border. Administering Authority and Mailing Address: All Peruvian ports are under the jurisdiction of the Ministry of Transportation. Inquiries concerning the facilities at Iquitos, Matarani and Mollendo may be addressed to: Ministry of Transportation Lima, Peru Inquiries concerning the customs treatment of goods imported through the port of Iquitos and intended for use in the free perimeter as well as those in transit to Bolivia through the ports of Matarani and Mollendo may be ad- dressed to: Direccion General de Aduanas (Customs Administration) Ministerio de Hacienda y Comercio (Min- istry of Finance and Commerce) Lima, Peru Uruguay Uruguay has established two free trade zones located at Colonia and Nueva Palmira. Uruguay is the smallest of the South Ameri- can republics with a land area of approximately 72,000 square miles. It is situated on the north shore of the River Plate, between Brazil and Argentina. The population of the country is estimated at 2,845,000. Montevideo is the capital and principal com- mercial center. Most foreign trade is channeled through this city, located near the Atlantic entrance to the River Plate. In addition, however, there are a number of smaller Uru- guayan ports along the Plate and Uruguay riv- ers. The country has well-developed road and rail networks, which connect at a number of points with Brazilian and Argentine systems. A number of international air carriers serve Montevideo. Uruguay is signatory to the General Agree- ment on Tariffs and Trade (GATT) and is a member of the Latin American Free Trade Association (LAFTA). Free Trade Zones at Colonia and Nueva Palmira Location Colonia is a port city on the River Plate, some 100 miles west of Montevideo. Ocean steamers with cargo for Colonia discharge at Montevideo (for bonded overland shipment to Colonia) or at Buenos Aires (for transfer to smaller ships which can enter the port of Co- lonia). Colonia is directly accessible by water to river craft. It is connected with inland points by both road and rail. The free trade zone is located in the port area of the city. Nueva Palmira is a port on the Uruguay Riv- er, approximately 168 miles from Montevideo. It is accessible to ocean vessels as well as coastal ships. In addition to water transporta- tion, the city is served by highways which link it with other Uruguayan population centers. The free trade zone is located close to the port area. 92 Authorized Operations The operations of the free trade zones at Colonia and Nueva Palmira are regulated by Law No. 11,392 of 1949 and a body of subse- quent legislative and administrative actions. Goods of foreign origin may be entered into the zones, held there and processed, and reex- ported without payment of Uruguayan cus- toms duties and import taxes. Imported goods become subject to payment of such duties, how- ever, at such time as they may enter Uruguay- an customs territory. The operations permitted in the free trade zones include assembling, storing, sampling, mixing, exhibiting, blending, repacking, and the manufacturing of any product not manufac- tured in Uruguay. Restrictions and Controls Goods prohibited from entry into the free trade zones include explosives, firearms, am- munition, instruments of war, alcoholic bever- ages, watches, cigars and cigarettes, playing cards, transistor radios, jewels, perfumes, inflammables, and merchandise dangerous to health. Facilities Available More than 247 acres are available for open storage at each of the free trade zones. The Colonia zone has some covered storage space available; however, at the Nueva Palmira zone users must provide their own covered storage space. The administering authority does not have buildings for lease at either site. Both free trade zones are fenced and lighted. Administering Authority Both free trade zones are administered by the Comision Administradora de las Zonas Francas (Uruguayan Free Trade Zones Auth- ority). The Authority operates under the direct control of the Ministry of Finance. Mailing Address : Comision Administradora de las Zonas Francas Avenida Agraciada 1623, Piso 11 Montevideo, Uruguay 93 CO < Asia COUNTRY TYPE OF FACILITY PLACE Bahrain Free Trade Zone Mina Sulman Republic of China (Taiwan) Free Trade Zone Kaohsiung Hong Kong Free Port India Free Trade Zone Kandla Transit Zone Calcutta Iran Transit Zones Bandar Shahpur, Khorramshahr Japan Special Facilities Major ports and cities Lebanon Free Trade Zone Beirut Free Trade Zone Beirut International Airport Free Trade Zone Tripoli Malaysia Free Port Labuan Island Free Port Penang Island Pakistan Transit Zone Karachi Ryukyu Islands Free Trade Zone Naha Singapore Free Port People's Republic of South Yemen Free Port Aden Thailand Transit Zone Bangkok 95 Chapter 1 Free Trade Zones and Related Facilities in Asia Bahrain Bahrain has established a free trade zone at Mina Sulman. Bahrain is an independent island state lo- cated off the Gulf coast of Saudi Arabia. The state is made up of an archipelago which lies east of Dhahran, Saudi Arabia, and west of the northern tip of the Qatar peninsula. Bahrain has a land area of about 210 square miles and a population estimated at over 200,000. Because of its mid-Gulf position and prox- imity to the Arabian mainland, Bahrain has long functioned as a regional transshipment center; however, its major economic importance derives from petroleum production and refin- ing. Bahrain has a deep water harbor at Mina Sulman and an international airport serving the London-Australia route. A local aviation com- pany provides service for the Gulf area. Free Trade Zone at Mina Sulman Location Authorized Operations Goods of foreign origin may be brought into the zone for storage or processing. Bahraini customs duties are not levied on goods des- tined for transshipment or those exported sub- sequent to manufacture. Customs duties must be paid, however, if goods enter Bahraini cus- toms territory. In addition to cargo handling and storage, authorized activities include re- pair, processing, assembly and light industrial operations. Restrictions and Controls Regulations and controls relating to cargo handling and storage in the zone and in the entire port are governed by Part VI of Bahrain General Port Rules, which may be obtained from the administering authority. Certain types of goods may not be placed in covered storage space. They are as follows: asbestos sheeting and pipes, air conditioning units in crates, bran, bricks, vehicles (including auto- mobiles), cement, charcoal, clay, ropes and yarns, doors, empty bottles, firewood, cased furniture, iron and steel manufactures, timber, refrigerators, and windows and window glass. Mina Sulman, Bahrain's major port, is located 3 miles south of the state's capital, Manama, at the northern end of the main island. The free trade zone, called the "Bahrain Free Tran- sit Zone," is adjacent to the harbor area. Facilities Available Covered storage space available for leasing to domestic and foreign firms include 310,000 square feet. Open storage space includes 500,- 96 000 square feet. In addition, firms may lease land from the administering authority for the construction of their own facilities. Administering Authority The free trade zone (Free Transit Zone) in the Port of Mina Sulman is administered by the Bahrain Port Department which operates under control of a Port Advisory Board and the Gov- ernment of Bahrain. Mailing Address : Bahrain Port Department P. 0. Box 453 Manama, Bahrain Firms contemplating shipment to the zone may obtain from the Port Department a publication entitled the Government of Bahrain Port De- partment Tariff Book and Amendments, which contains a list of charges for storage and other activities undertaken in the zone. Republic of China (Taiwan) There is an export processing zone (i.e., limited free trade zone) at Kaoh- siung, Taiwan. Note: The term "export processing zone" which appears in the title of the Kaohsiung facil- ity is used throughout this section in pref- erence to "free trade zone." The essential difference between the two is that the ex- port processing zone limits free trade zone-type privileges (e.g., duty-free im- ports) to industrial concerns and associated service enterprises which manufacture, process or assemble goods solely for the export market. Generally, the zone may not be used to facilitate the importation of goods into the domestic Taiwan market, nor may it be used for the warehousing of goods intended for third-country markets. It is intended primarily to attract new in- vestment in manufacturing for export with the utilization of local labor, The island of Taiwan is situated some 90 miles off the coast of the China mainland, about midway between Japan and Hong Kong. Taiwan, together with a few small islands, has a land area of about 13,900 square miles and a population of about 14 million. The economy is becoming increasingly in- dustry-oriented, although agriculture continues to play an important part. The transportation network on Taiwan is well-developed, with both rail and road connections between all major towns, agricultural and industrial producing areas. Taiwan ports are served by a number of domestic and foreign ocean shipping companies. There is an international airport located at Taipei and an airport at Kaohsiung which is being expanded to handle international traffic. Export Processing Zone at Kaohsiung Location Situated near the southern tip of the island, Kaohsiung is one of Taiwan's two major sea- ports. It is served by a number of international shipping lines and has road and rail connections with inland points. Domestic air service con- nects the city with Taipei international airport. The population of the city is estimated at about 600,000. The export processing zone is a 170-acre tract in the port area. Authorized Operations The legal basis for the establishment of the Kaohsiung facility is the "Statute for Estab- lishment and Management of Export Proces- sing Zones," of January 30, 1965. This legisla- tion also makes possible the establishment of similar facilities elsewhere in Taiwan. Cur- rently, the creation of an additional zone in the Kaohsiung area is under consideration. The law restricts the use and privileges of the export processing zone to "export enterprises," which are firms engaged in the manufacturing, processing or assembly of goods for the export 97 market or related service operations such as storage, transportation, unloading, loading, packing, and repair essential to the production or sales operations of the producing enterprises. Export enterprises located within the export processing zone are authorized to bring in for their own use machinery, equipment, raw ma- terials and semi-finished products of foreign origin without payment of customs duties or other import levies, including harbor dues. However, in the few instances where the goods may be permitted subsequently to enter the customs territory of Taiwan, the applicable duties must be paid. Foreign goods imported free of duties and goods produced within the zone are also exempt from payment of an excise tax, known as the "commodity tax." Goods of Taiwan origin brought into the zone for the use of export enterprises are considered as having been exported. The operations authorized within the zone are storage, display, repacking, processing and manufacturing related to export sales. There is no limit on the amount of time during which components or goods produced within the zone may be held in storage. Export enterprises located within the export processing zone are exempt from payment of Taiwan's business tax and defense surtax. They also benefit from the relaxation of certain con- trols affecting the purchase and use of foreign exchange. In other matters of a legal or fiscal nature, firms operating within the zone are subject to the same laws that apply elsewhere in Taiwan. Restrictions and Controls With minor exceptions, subject to specific approval, goods of foreign origin brought into the zone or goods produced within the zone are prohibited entry into the customs territory of Taiwan. Firms holding goods within the zone are required to maintain accurate inventory records. Import and export licenses, which are obtainable through the zone's administering authority, are required for all shipments to and from the zone. To establish operations within the zone, firms must be approved by the administering authority. Approval is restricted to firms en- gaged in the production of specified (mostly light-industrial and labor-intensive) categories of goods. Additional criteria require that the proposed enterprise involve new investment, that it will not adversely affect previously es- tablished export enterprises, that the compo- nents and goods produced be of a type which can be easily inspected and controlled, and that the operation will not be injurious to public health or safety. A minimum investment of $25,000 and minimum employment of 30 per- sons have also been set. Facilities Available Land within the zone is publicly held ; indus- trial sites, however, are available on a lease basis. Buildings for industrial operations may be built by companies for their own use, or con- structed by the administering authority and oc- cupied on a lease-purchase plan. There are warehousing facilities capable of housing 12,- 000 metric tons of goods, cargo-handling equip- ment and bonded trucks. The zone's adminis- tering authority handles the delivery of goods and their transportation to international carriers. Administering Authority The zone is administered by the Kaohsiung Export Processing Zone Administration (KEPZA) operating under the jurisdiction of the Ministry of Economic Affairs. Mailing Address: Chinese Investment and Trade Office Suite 1909, 515 Madison Avenue New York, New York 10022 Kaohsiung Export Processing Zone Administration Kaohsiung Taiwan, Republic of China 98 Hong Kong Hong Kong is a free port. Location Hong Kong is a British Crown Colony which lies just within the tropics on the southeastern coast of the Chinese mainland. It is made up of over 200 islands and islets, and a portion of mainland territory adjacent to China's Kwang- tung Province. The Colony has a total land area of almost 400 square miles, and a population of nearly 4 million. Hong Kong Island, the oldest part of the Colony, is its administrative and fi- nancial center. The Kowloon peninsula, on the mainland facing Hong Kong Island, is the ma- jor industrial area. Hong Kong harbor, extend- ing between the north shore of Hong Kong Island and the mainland, totals about 26 square miles. Because of its central geographic location, harbor facilities and free port status, Hong Kong has long been a center for international trade with China and other areas of the Far East. In recent years Hong Kong has be- come an important manufacturing center as well. Over 6,000 ocean-going ships enter Hong Kong harbor annually and about 100 shipping companies maintain liner service to the port. Hong Kong is also served by a major interna- tional airport located in Kowloon. Passenger and vehicle ferries, as well as numerous un- scheduled small craft, provide frequent service between Kowloon and Hong Kong Island and also serve outlying islands. The free port area encompasses the entire colony. Authorized Operations With the exception of five categories of goods (see Restrictions and Controls, below) customs duties are not levied on goods of foreign origin entering Hong Kong. Importers, exporters and reexporters are required to submit prompt dec- larations of individual transactions to the Hong Kong Government. Although the collec- tion of statistics is the primary purpose of this requirement, a small tax based on the value of the transaction must be paid with each trade declaration. Other trade controls are also mini- mal, in that import licenses or permits are not required for most types of goods. No duties are levied on exports or on goods in transit to other destinations. If dutiable goods are reexported, damaged in transit or destroyed unused, a re- fund of the duty paid may be obtained. Draw- back is also payable on exports of locally man- ufactured goods made from duty-paid materi- als. In such cases, export orders must be filled directly from the factory of manufacture or the goods must be withdrawn for export from an approved warehouse. Activities which may be carried on include loading, unloading, stevedoring, measuring and weighing of cargoes, storing, breaking bulk, sorting, grading, cleaning, assembling, manu- facturing, distributing locally or for reexport, exhibiting, sampling, packing, marking, labeling, auctioneering and freight forwarding. Restrictions and Controls The Colony's trade controls affecting inter- national trade transactions are of three types: customs duties, commodity controls, and for- eign exchange restrictions. Customs duties — For revenue purposes cus- toms duties are assessed on five categories of goods: alcoholic beverages, tobacco and tobacco products, hydrocarbon oils, table waters and methyl alcohol. Alcoholic beverages of Com- monwealth origin and tobacco from Malawi are accorded preferential duty rates. Import- ers, exporters, and dealers in dutiable goods must be licensed. Dutiable goods must be stored either in general bonded warehouses or in a li- censed warehouse belonging to the importer until duty is paid or the goods are withdrawn for reexport. Commodity Controls — Import and export li- censes or permits are required for certain goods falling within four general categories: dangerous goods (e.g., explosives, poisons, nar- cotics); goods of a strategic nature (arms, am- munition, certain minerals, metals, machine tools, rubber goods, etc.); dutiable goods (de- scribed in preceding paragraph); and other specified items (e.g., essential foodstuffs, coal, 99 precious metals). The storage, processing and movement within the Colony of such goods may be subject to special regulation. In addition, goods from specified Communist countries must be covered by an import license. Exchange Controls — Prior approval of the exchange control authorities is required for some import transactions, depending on value, type, method of payment and currency of the originating country. Exports to countries out- side the sterling area, excluding Mainland China, Taiwan and Macao, require export li- censes. Both import and export licenses are usually issued freely upon application. Facilities Available All storage and servicing facilities at Hong Kong are owned and operated by private en- terprises. They include four large wharf and warehouse companies and over 100 small ware- houses which provide facilities to unload and store all kinds of goods including perishables, timber and logs, chemicals, explosives and oth- er goods requiring special treatment. Refrig- erated space amounts to about 3.8 million cubic feet. Total unrefrigerated storage space pro- vided by major warehouse operators in the port area amounts to over 50 million cubic feet. Warehouse space may be rented for sam- pling, mixing, assembling, blending or repack- ing. Public exhibition facilities are available for display by local manufacturers and export- ers. Hong Kong has an oil tanker terminal. Bunkering services are provided at oil depot wharves or by lighter. Trade Licensing Branch Department of Commerce and Industry Fire Brigade Building Hong Kong, B.C.C. India India has established a free trade zone at Kandla. There is also a transit zone (for Nepal) at Calcutta. India, with a land area of about 1,175,600 square miles, occupies the greater part of the subcontinent of Southern Asia. To the north it is bordered by West Pakistan, Mainland Chi- na, Nepal and the small principalities of Sik- kim and Bhutan, and to the east by East Pakistan and Burma. India has a coastline of about 3,500 miles facing on the Arabian Sea, the Indian Ocean and the Bay of Bengal. The country has a population of over 500 million. India's economy remains primarily agricul- tural ; however, it is becoming increasingly industrialized. Its internal transportation net- work, made up of about 36,000 miles of rail- roads and 470,000 miles of roads, is one of the most extensive systems in the world. Neverthe- less, its capacity is strained by the increasing needs of the country's expanding population and developing industrial sector. The transpor- tation system is being enlarged and improved, but some areas outside the major industrial and marketing areas are inadequately served. Administering Authority The Port of Hong Kong is state-owned. It is administered by the Director, Marine Depart- ment, Hong Kong Government. Cooperation between the Marine Department and shipping and commercial interests is maintained through two advisory groups, the Port Committee and the Port Executive Committee. Mailing Address: Director, Port of Hong Kong Marine Department 102 Connaught Road Central Hong Kong, B.C.C. Free Trade Zone at Kandla Location The Kandla free trade zone is situated in Gujarat State near the head of the Gulf of Kutch — an arm of the Arabian Sea which in- dents India's northwestern coastline. The zone is about 6 miles inland from Kandla port, one of the country's seven major port facilities. The closest town is Gandhidham, about 3 miles from the zone. The inland transportation facil- ities which serve the area include a meter- gauge railroad which links it with northern India, a national highway which runs east to 100 the industrial area of Ahmedabad, and regular air service to Bombay. The hinterland of the port region is being enlarged by the construc- tion of a broad-gauge rail line to connect it with the east and by highway improvement. Authorized Operations The Kandla free trade zone was opened in 1965. At present its functions are limited pri- marily to those of an export processing area. With few exceptions (see Restrictions and Con- trols, below) goods of foreign origin held or manufactured in the Kandla zone may not be transferred into the customs territory of India. Goods of foreign origin including machinery and equipment to be used in the zone may be brought into the free trade zone without pay- ment of customs duties and excise taxes. In addition, most imports into the zone, if intend- ed for reexport, are not held subject to India's quantitative (quota) import restrictions. How- ever, if goods of foreign origin held or manufac- tured in the free trade zone are subsequently permitted to pass into Indian customs territory, customs duties and excise taxes must be paid, and other import control regulations (e.g., im- port licensing) must be observed. Goods of Indian origin may be entered into the zone without payment of excise taxes. Such goods entering the zone are considered exports. However, if goods of Indian origin are later re-entered into Indian customs territory, ex- cise taxes must be paid. If raw materials of Indian origin are transformed into manufac- tured goods in the zone and subsequently are entered into Indian customs territory, such goods are treated as imports from abroad and customs duties are assessed. The activities authorized in the Kandla free trade zone are storage, transshipment, process- ing and manufacturing of goods for export. scarce equipment and spare parts held in the free trade zone may be permitted to be sold in the customs territory of India upon payment of customs duties and excise taxes. However, the distribution of such goods in India must be undertaken by an organization designated by the Government. Industries established within the free trade zone are subject to the same regulatory re- quirements and receive the same tax treatment as like industries elsewhere in India, except for the duty-exemption described above. They must make their own arrangements to obtain foreign exchange for the importation of ma- chinery and raw materials. There are restrictions controlling the entry into the zone of diamonds, precious stones, gold, watches, narcotics and items which can be easily smuggled. Facilities Available An area of 342 acres has been allocated for the free trade zone. A limited number of sheds is being provided for small industries and ex- porters who prefer renting accommodations to building them. Land, in plots of varying sizes, is available for lease by firms wishing to con- struct their own facilities. Administering Authority The free trade zone is under the administra- tive control of the Ministry of Commerce. The Ministry has appointed an administrator to act as general manager of the zone and its facilities. Mailing Address: The Administrator Kandla Free Trade Zone P. 0. Box No. 7 Gandhidham, Gujarat, India Restrictions and Controls Enterprises which are permitted to establish manufacturing operations in the free trade zone are required to export their output, with the exception of sub-standard production and waste materials. Small quantities of sub-stan- dard and waste products and, in certain cases, Transit Zone (for Nepal) at Calcutta Location Calcutta, one of India's major ports of entry, is located near the Bay of Bengal in northeast- ern India. Indian railways extend from the port 101 of Calcutta to several points along the Nepalese border. Nepal, a country of 10.7 million people and an area of 54,300 square miles, is landlocked and must conduct its foreign trade through adjacent countries, principally India. Iran Iran has established transit zones (for Afghanistan) at Khorramshahr and Bandar Shahpur. However, Afghani- stan does not now use the Bandar Shahpur facilities. Authorized Operations Goods of foreign origin in transit to Nepal may be stored pending onward transportation. Indian customs duties and other import con- trols are not imposed on such goods. Restrictions and Controls Goods in transit for Nepal are required to be recorded in the Calcutta Customs Office, and Nepalese importers are required to show im- port licenses obtained from the Government of Nepal. The storage of explosives is not permitted. Location Bandar Shahpur and Khorramshahr are Iran- ian port cities. Rail transportation links the two cities, located in the southwestern part of the country, with Meshed, in the northeast near the Afghanistan border. From that point, tran- sit goods must be transferred to trucks for transport into Afghanistan. Afghanistan, a country of 251,000 square miles and 15.4 million people, is completely landlocked. Inland transportation must be car- ried on by road or air; there are no railroads. Foreign trade is conducted primarily through Pakistan, although 5 or 6 tons of Afghan im- ports and 50 tons of Afghan exports pass through Khorramshahr monthly. Facilities Available One storage shed is reserved for goods in transit to Nepal. Administering Authority and Mailing Address: The transit zone in Calcutta is administered by the Calcutta Port Commissioners. Addition- al information on the zone may be obtained from: Calcutta Port Commissioners Calcutta, West Bengal India Ministry of Foreign Affairs Government of India New Delhi India Authorized Operations Under transit agreements signed in 1962 by the Governments of Iran and Afghanistan, transit zone facilities have been established at Khorramshahr and Bandar Shahpur for goods in transit destined for Afghanistan and for Afghan goods in transit destined for third countries. Goods in transit are exempt from Iranian customs duties. The Iranian customs service provides storage space for transit goods in each city. In Khorramshahr and Bandar Shahpur space is available for such operations as as- sembling, blending, mixing, repacking, sam- pling and sorting which may be undertaken by the owner or by the owner's agent with written permission from the customs office. Restrictions and Controls Transit privileges are not extended to arms and ammunition intended for military use or to 102 commodities the entry of which into Iran or Afghanistan is prohibited. Iranian customs of- ficials may inspect transit goods. No special security measures are required if Iranian Government controlled transportation facilities, e.g., the Iranian railway system, are used, but the posting of a guard is necessary if truck transport is used. Afghan officials may be stationed at Khorramshahr, Bandar Shahpur, and Meshed. Japan Japan has special facilities — a sys- tem of bonded warehouses with manu- facturing permitted — which provide many of the advantages of a free trade zone. Facilities Available At Khorramshahr, about 21,500 square feet of covered storage space are available for goods in transit and about 27,000 square feet for open storage. Any sorting, sampling, mixing, etc., must be undertaken in this space. There is no separate storage space reserved for goods in transit at Bandar Shahpur. Cargo from any given ship is stored as a unit regard- less of whether the goods are to be cleared immediately or are in transit. At Bandar Shah- pur storage space is provided in 18 warehouses. Merchandise weighing over 100 kilograms (ap- proximately 220 pounds) may not be stored in these warehouses. It is not possible to lease storage space, but a storage area can be set aside without extra charge if regular shipments are made. Administering Authority The transit zone facilities at Khorramshahr and Bandar Shahpur are operated by the cus- toms offices located in those cities. These cus- toms offices operate under the Central Customs Office in Tehran. Mailing address : Director of Customs Khorramshahr Customs Office Khorramshahr, Iran Director of Customs Bandar Shahpur Customs Office Bandar Shahpur, Iran Central Customs Office Ministry of Economy Tehran, Iran Japan is an island country situated in a northeasterly direction off the eastern coast of Asia. It is composed of 4 major islands and more than 1,000 smaller islets. The country has a land area of about 147,000 square miles and a population of about 100 million. Japan is among the world's foremost indus- trial and trading nations. It is well-served internally by an extensive rail, air and road net- work. Externally it is served by a large number of international shipping lines and airlines. The Japanese merchant fleet is the world's fourth largest. Special Facilities Japan has an extensive system of bonded fa- cilities in which certain activities normally au- thorized in free trade zones may be carried on. These facilities are divided into five catego- ries: designated bonded areas, bonded sheds, bonded warehouses, bonded factories and bonded exhibition sites. While most of these facilities are privately owned, they are subject to regulation by the Japanese Customs Office operating under the Ministry of Finance. Each of the five types of facilities permits the entry of foreign goods for storage and reexport, and in certain cases, checking of contents, repack- ing, sorting, exhibition and minor processing, without payment of customs duties. Customs duties must be paid, however, if the goods enter the Japanese customs territory. These special bonded facilities are located throughout the country, with each of Japan's eight customs districts — Tokyo, Yokohama, Osaka, Kobe, Nagoya, Moji, Nagasaki and Hakodate — con- taining all five types. The major features of each type are described below. 103 Designated Bonded Areas: Designated bonded areas are premises, build- ings or other facilities, owned or administered by the national government, local public entities or the Japan National Railway Corporation, de- signated by the Minister of Finance, in which foreign goods may be loaded or unloaded, con- veyed or stored. The storage period may not exceed one month. In addition, with the per- mission of the Director of Customs, foreign goods may be checked, repacked, and sorted ; samples may be exhibited and minor processing which does not change the nature of the goods and similar operations may be undertaken. There are 52 designated bonded areas in Japan; these facilities are located at international air- ports and at sea ports. Space is available for lease. Bonded Sheds: Bonded sheds are places, approved by the Director of Customs, in which goods of foreign origin may be unloaded or loaded, conveyed or temporarily stored to facilitate customs for- malities. The maximum storage period is one month. There are 1,358 bonded sheds located through- out the country, most of which are privately owned. Of these 477 are for the exclusive use of their owners. Space is available for lease in the remainder. Bonded Warehouses : Bonded warehouses are facilities, approved by the Director of Customs, in which goods of foreign origin may be stored for a maximum period of two years. Such goods are subject to customs inspection at the time they are entered into the warehouse. In addition to loading, un- loading, conveying and storing, certain other activities may be carried on with the permis- sion of the customs authorities. They include checking, sorting, repacking, exhibiting sam- ples and similar operations. All bonded warehouses are privately-owned. They number 654, of which 284 are reserved for the exclusive use of their owners. Space may be leased in the remainder. Bonded Factories: Bonded factories are establishments, ap- proved by the Director of Customs, in which goods of foreign origin may be blended, pro- cessed, manufactured or handled in other ways. Foreign goods may be stored in these places awaiting processing for a 2-year period. This time limit, however, may be extended by the Director of Customs. Goods entered into bonded factories are subject to customs inspection. Under certain conditions, permission may be ob- tained to remove foreign goods from the prem- ises of bonded factories to another work site ol- factory for the purpose of performing opera- tions not feasible within the bonded factory. There are over 1,250 bonded factories in Japan. All are for the exclusive use of their owners and are not available for lease. These factories have been established by firms which purchase foreign parts for inclusion in manu- factured goods. The system of bonded factories was established as a means of export promo- tion, and the goods manufactured at such fac- tories are primarily meant for export to other countries. In case it is impossible to export such goods, they may be imported into the Jap- anese economy. If imported into Japan, prod- ucts manufactured from foreign components in bonded factories are assessed customs duty as imports. If the goods imported into Japan con- tain Japanese as well as foreign components, customs duty is assessed in proportion to the amount of foreign materials contained in the product. If the bonded factory system cannot be used because of technical difficulties, the tariff re- bate system is available for a designated list of export items. Under this system, customs duties once paid on imported materials are subsequently refunded in whole or in part to the exporters of goods made from such im- ported materials. Bonded Exhibition Sites: Bonded exhibition sites were newly added in 1967 to Japan's bonded facilities. These are areas approved by the Director of Customs from time to time where goods of foreign ori- gin may be stored, displayed or operated at international trade fairs or similar exhibitions. Mailing Address: Additional information about designated bonded areas, bonded warehouses, bonded sheds, bonded manufacturing establishments and bonded exhibition sites in Japan may be obtained from: 104 Chief, Inspection Section, Bureau of Customs Ministry of Finance 2, 3-chome,Kasumigaseki, Chiyoda-ku Tokyo, Japan Inquiries for general information may also be directed to the respective Directors of Cus- toms in each of the eight Japanese customs dis- tricts. All communications should state the kind of facility or sevice required as well as the location at which the desired service is to be performed. Charges for the use of bonded facilities in Japan are normally set individual- ly by the owners of such facilities. Lebanon Free trade zones have been estab- lished in Lebanon at Beirut, Beirut International Airport and Tripoli. Lebanon is situated at the extreme eastern end of the Mediterranean Sea. It is bordered by the Syrian Arab Republic on the north and east, and by Israel on the south. The country has a land area of about 4,000 square miles and a population of about 2.6 million. Lebanon, particularly Beirut, functions as a major financial and trading center for the Near East. Tourism is also an important segment of the Lebanese economy and is the largest source of foreign exchange earnings. Industry is gen- erally small and for the most part limited to the production of consumer goods. The country has an excellent location on ma- jor shipping and air routes between Europe and Asia. For this reason, it is served by a number of international air and ocean carriers as well as regional transportation companies. Internally, highways are the most important means of transport. Lebanese and Syrian high- ways connect at several points, affording over- land transportation from the port of Beirut to Syria and third countries beyond. Rail lines connect major Lebanese port and industrial centers and also extend into Syria. Free Trade Zone at Beirut Location Beirut, with a population of about 875,000, is the capital, financial and commercial center and principal port of Lebanon. It is also served by a major international airport. Both airlines and shipping companies provide regular and frequent service between Beirut and Europe and Beirut and other Near Eastern countries. The free trade zone is located in the port area of Beirut. Authorized Operations Goods of foreign origin may be brought into the free trade zone, stored, subjected to any authorized type of handling, and reexported without payment of Lebanese customs duties. Imports into the free trade zone are also ex- empt from import licensing requirements. Cus- toms duties become payable, however, if the goods are subsequently transferred from the zone into Lebanese customs territory. Authorized operations include storing, sam- pling, packing, repacking, blending, assembling and manufacuring. Restrictions and Controls Narcotics, arms and ammunition, explosives, other highly inflammable merchandise, and goods subject to control by State Monopoly, e.g., tobacco, are subject to specific prohibitions and regulations. Entry and exit permits must be obtained from both the Lebanese customs and free trade zone authorities. Facilities Available The total area allotted for storage and other operations is more than 1.4 million square feet. Total covered storage area in the zone is about 920,000 square feet, and open storage space covers about 200,000 square feet. There are available public warehouses run by the zone's administering authority, private warehouses for industrial use and storage, and terraces for goods usually kept in open space. Warehouses for private use may be leased from the admin- 105 istering authority or may be built by lessees on land leased from the administering authori- ty. Cold storage facilities and facilities for textiles and the sorting and packing of agri- cultural products are also available. Factories and workshops may be set up where manufac- turers may transform imported raw materials and then reexport the finished products. Administering Authority The free trade zone in the port of Beirut is administered by the Compagnie de Gestion et & Exploitation du Port de Beyrouth (Beirut Port Management and Exploitation Company), a Lebanese joint-stock corporation. The com- pany owns and operates the harbor and free trade zone facilities of the port of Beirut. Mailing Address : Compagnie de Gestion et d'Exploitation du Port de Beyrouth Rue du Port, P. 0. Box 1490 Beirut, Lebanon Free Trade Zone at Beirut International Airport There is a small free trade zone located at Beirut International Airport. The warehouses and sales shops are rented by the public admin- istration of the airport to private entrepre- neurs for the storage and sale of imported and locally produced goods. The leasing is subject to the approval of the Ministry of Public Works and Transport and of the Customs Adminis- tration. Goods brought in by air may be stored in the free trade zone or may be transferred under customs control to warehouses in the free trade zone in the port of Beirut for stor- age or processing, pending entry into the cus- toms territory of Lebanon or transshipment by sea or air elsewhere. The free trade zone has available a limited area of covered storage space suitable to goods of the kinds normally transported as air freight. Free Trade Zone at Tripoli Location Tripoli is one of the terminals of the Iraq Petroleum Company pipeline. It is situated on the Mediterranean coast to the north of Beirut. It has a population of about 150,000. The free trade zone is located in the Port of Tripoli. The Lebanese rail and highway systems link Tripoli with Beirut and other population centers. Authorized Operations See section under this heading in the sum- mary of the free trade zone at Beirut. Restrictions and Controls See section under this heading in the sum- mary of the free trade zone at Beirut. Facilities Available The total area of the free trade zone is more than 807,000 square feet. Total covered storage area in the zone is over 269,000 square feet; open storage space includes 322,900 square feet. There are both public warehouses run by the zone's administering authority and private warehouses for industrial use and for ware- housing stocks of goods belonging to warehouse owners. The covered area includes 12 buildings of reinforced concrete, partly leased. Administering Authority The free trade zone in the Port of Tripoli is administered by the Societe Nationale de la Zone Franche de Tripoli (Tripoli Free Zone Company), a private authority operating under the control of the national government. Mailing Address : Societe Nationale de la Zone Franche de Tripoli Tripoli, Lebanon 106 Malaysia There are two free port areas in Ma- laysia, namely Labuan Island and Penang Island. Malaysia is composed of two geographic areas: West Malaysia, i.e., the Malay penin- sula, and East Malaysia, i.e., Sarawak and Sa- bah on the north coast of the island of Borneo. These regions, together with a number of off- shore islands, have a total land area of about 128,000 square miles. The country's population is about 9.4 million, of whom 85 percent live in West Malaysia. Malaysia has land frontiers with Thailand on the Asian mainland and with the Republic of Indonesia on the island of Borneo. The Strait of Malacca separates the Indonesian island of Sumatra from the western coast of Malaysia, while to the north and northwest of Sabah, across the Sulu Sea, lie the southernmost of the Philippine Islands. The Strait of Johore, bridged by a causeway affording both vehicle and rail crossings, separates the Malay penin- sula from the Republic of Singapore to the south. The Malaysian economy is heavily dependent on the production and export of primary prod- ucts, particularly rubber and tin. West Malay- sia has a relatively well-developed transporta- tion network. Highways and railroad lines link major population centers and connect with the transportation network of Thailand on the north. In addition, a number of international air and ocean carriers serve the country. Trans- portation is much less developed in East Ma- laysia. In both Sabah and Sarawak coastal and inland water shipping is the most common means of transportation although a 116-mile railroad runs along a portion of the northern coast of Sabah. Labuan Free Port Location Labuan is an island situated about 6 miles off the coast of Sabah in East Malaysia. Ad- ministratively, for purposes other than cus- toms, it is a part of Sabah. It has an excellent natural harbor, and a total land area of about 35 square miles. It functions both as a principal port for Brunei — an oil-producing sultanate lo- cated between the States of Sarawak and Sa- bah — and as a transshipment point for Sabah. The free port privileges extend throughout Labuan and six smaller dependent islands. Labuan has convenient access to ocean ship- ping; there is direct service between the is- land and the United Kingdom, Australia, Hong Kong and Japan, as well as with other Malay- sian ports and Singapore. In addition, coastal craft operate between Labuan and neighboring areas. Labuan has an international airport. Authorized Operations With few exceptions, customs duties are not levied on imports. Export duties are not levied on any commodity. There are no restrictions on the types of operations which may be undertaken. Restrictions and Controls Customs duties are levied on alcoholic bever- ages, tobacco and tobacco products, matches and petroleum products. In addition, the im- portation of certain goods regarded as injuri- ous to public health or safety is prohibited. Import licenses are required for some im- ports. They include goods manufactured in Japan and in Sino-Soviet bloc countries, wheat from certain countries, printed matter lacking indication of country of origin, and rice. Ex- port licenses are also required for certain goods, including arms, ammunition and im- plements of war, drugs, timber, plants, wild animals and birds, objects of local cultural or historical interest, and certain strategic equip- ment and materials (i.e., many types of indus- trial equipment and machinery) . The only activity permitted in the port area aside from cargo handling is storage. Any other type of operation, e.g., assembling, must be undertaken elsewhere on the island. Facilities Available Open storage area in the port of Labuan amounts to 25,000 square feet, and covered 107 storage about 22,400 square feet. Buildings are not available for lease in the port area. Administering Authority The Government of Sabah administers the free port facilities and trade regulations of Labuan Island. Mailing Address: The District Officer Labuan Sabah, Malaysia The Secretary Labuan Free Port Guild P.O. Box 112 Labuan Sabah, Malaysia The Director of the Marine Department Labuan Sabah, Malaysia Penang Island Free Port Note: The Government of Malaysia is under- stood to have under consideration a pos- sible modification of Penang's traditional free port status. Location Penang Island lies at the northern end of the Strait of Malacca, off the coast of the north- western portion of the Malaysian mainland. It is situated opposite the Butterworth/Prai area of the Province of Wellesley on the peninsula; the island and the province together make up a state of the Malaysian Federation also called Penang. The free port privileges, however, are confined to Penang Island and several small islets. With an area of about 110 square miles, Penang Island has about one-fourth the total land area of the state. Its inhabitants number over 300,000 of the state's total of about 700,000. Penang Island, which until 1948 was one of the Straits Settlements (U.K.), has been tra- ditionally a free port and transfer point for the trade of nearby areas of Indonesia, Thailand and Burma. However, in recent years, the tran- sit trade has been surpassed in importance by sales into the customs territory of Malaysia. Georgetown, the capital of the island, is its principal population center and commercial area. Industrial activities which have devel- oped are tin smelting, rice milling, fruit can- ning, fish processing and textiles. The principal products exported are tin, rubber, copra and coconut oil. Penang Island's foreign trade is served by a number of ocean carriers and an international airport. The island has an adequate road net- work and regular ferry service connecting it with the mainland. The nearest railhead is lo- cated at Prai with special railroad ferries transferring passengers and rail freight be- tween Georgetown and Prai. Authorized Operations Merchandise, with some exceptions, may en- ter any part of the island free from customs duties, whether intended for local consumption or for transshipment. Free storage for a limited period of time is permitted in the free port. In addition, exhibit- ing, sampling, packaging, marking, labeling, selling, processing and manufacturing may be undertaken. Restrictions and Controls Import duties are imposed on such goods as tobacco, tobacco products, alcoholic beverages, motor tires and tubes, sugar, matches, ciga- rette lighters and petroleum products. With the exception of those manufactured in the Unit- ed Kingdom or certain other Commonwealth countries, imported automobiles are subject to a registration fee. While most commodities may be imported without specific approval (i.e., under Open Gen- eral License), specific validated licenses are re- quired for some imports. The latter are issued by the Office of the Trade Division, Ministry of Commerce and Industry in Penang. The importation of arms, ammunition, and explo- sives requires a permit from the Chief Police Officer. Firms contemplating shipment to the free port should inquire of the administering 108 authority for a complete list of dutiable, re- stricted or prohibited imports and regulations governing the entry, storage and exit of goods. In the case of transit goods, export permits issued by the appropriate customs authorities are required. Reexportation of a substantial number of commodities is subject to procure- ment of export licenses. Facilities Available There are facilities for exhibiting, sampling, packaging, marking, labeling, selling, etc., op- erated by private companies. The port authori- ties have ample landing and warehousing facil- ities for dutiable items entering Penang. Administering Authority The free port facilities on the island of Pe- nang are administered by the State Government of Penang. Afghanistan. It is situated in West Pakistan on the Arabian Sea. Pakistani railroads and highways extend to several points on the Af- ghan border. Goods are carried by rail from Karachi to the Pakistani border towns of Pe- shawar or Chaman and there transferred to truck for onward shipment. Afghanistan, a country of 251,000 square miles and 15.4 mil- lion people, is completely landlocked. Inland transportation must be carried on by road or air; there are no railroads. Authorized Operations Goods in transit to Afghanistan through the port of Karachi are not subject to Pakistani customs duties or other import controls. Stor- age pending onward rail transportation is the only operation authorized. Restrictions and Controls Mailing Address : The Controller of Customs Northern Area Georgetown Penang, Malaysia Import and Export Control Officer Customs Building Georgetown Penang, Malaysia Economic Officer of Penang Customs Building Georgetown Penang, Malaysia Pakistan Pakistan has established transit zone facilities (for Afghanistan) in the port of Karachi. Location Karachi is Pakistan's principal port and the major gateway for trade bound to and from Merchandise destined for Afghanistan must be clearly marked "In transit to Afghanistan," and forwarding agents must file with the Pak- istani customs authorities a transit invoice and a bill of entry for consumption (marked "For Afghanistan") as well as the usual commer- cial documents. Pakistani customs authorities inspect shipments destined for Afghanistan, after which they are sealed for onward shipment. Facilities Available One shed, designated "L" shed in the Mans- field Import Yard of the port of Karachi, is re- served for the storage of goods in transit for Afghanistan. It has about 40,000 square feet of storage space. Administering Authority The transit facilities for Afghanistan in the port of Karachi are administered by the Ka- rachi Port Trust, an autonomous statutory body functioning under the Pakistan Ministry of Communications, Rawalpindi. 109 Mailing Address : Additional from: information may be obtained The Traffic Manager, Karachi Port Trust KPT Building Karachi, Pakistan The Collector of Customs Customs House Karachi, Pakistan Ryukyu Islands A free trade zone is located at Naha, Okinawa, in the Ryukyu Islands. The Ryukyu Islands are a chain which ex- tends about 375 miles in a southeasterly direc- tion between Japan and Taiwan. In effect, they separate the East China Sea from the North Pacific Ocean. Although the chain is made up of 73 islands, only 26 are considered significant, and of these Okinawa is the most important. Okinawa accounts for more than one-half of the Ryukyus' total land area of about 850 square miles, and about 82 percent of their 950,000 inhabitants. The Ryukyus have been administered by the United States since World War II. The United States acknowledges Japan's residual sover- eignty over the islands, and they maintain close commercial and cultural ties with Japan. Sugar and pineapple products are produced in the Ryukyus, and in recent years commer- cial fisheries and a number of manufacturing industries have been introduced. Commerce and service industries, however, play the greatest role in the economy, owing in large measure to the employment and demand generated by the U.S. military establishment. free trade zone is situated adjacent to the port area. The transportation facilities serving Naha include a local shipping conference made up of Ryukyuan, Japanese and U.S. carriers which provide scheduled service to and from Japa- nese ports. A number of other foreign-flag car- riers engaged in Far Eastern trade call at Naha. There is also an airport served by four international carriers. Inter-island transport is supplied by local vessels and domestic air ser- vice. Transportation on the island of Okinawa and other large islands is provided by trucking companies; there are no railroads. Authorized Operations The free trade zone was opened for opera- tion by the Government of the Ryukyu Islands in 1960 to develop processing industries and entrepot trade. Goods intended for reexporta- tion may be brought into the free trade zone for temporary storage, display, repackaging, processing, finishing and other operations. Upon entry into and reexport from the free trade zone, goods are exempt from customs duties and taxes, import and export licensing controls, quotas, and usual customs procedures. Goods may be transferred into the customs ter- ritory of the Ryukyu Islands upon payment of all duties applicable to imported goods and procurement of an import license from the Government of the Ryukyu Islands. Restrictions and Controls Companies interested in setting up business activities or investing in business activities in the free trade zone must obtain written autho- rization from the Chief Executive, Government of the Ryukyu Islands. Free Trade Zone at Naha Location Naha is the principal port of Okinawa and the Ryukyu Islands, as well as their commer- cial and administrative center. It is also the largest city in terms of population, having 260,000 of Okinawa's 781,000 inhabitants. The Facilities Available Total area of the free trade zone is 88,776 square feet. Warehouse facilities in the zone consist of two one-story, galvanized steel struc- tures, each with 24,000 square feet of space. Additional areas may be authorized for bona fide export business ventures, contingent on the type of industry involved. 110 Administering Authority The free trade zone is administered by the Government of the Ryukyu Islands. Mailing Address Chief Executive Government of the Ryukyu Islands Naha, Okinawa United States Civil Administration Ryukyu Islands APO San Francisco, California 96248 Singapore Singapore is a free port. Note: In recent years Singapore's traditional free port status has been altered by the adop- tion of a customs tariff and the imposition of import licensing requirements. These controls, however, affect only about 2 per- cent of Singapore's imports — about 300 items (mostly goods of a type manufac- tured in Singapore) are subject to customs duties, while approximately another 100 items (again, mostly goods of a type man- ufactured in Singapore or Malaysia) are subject to specific import licenses or quan- titative limitations — and Singapore re- mains virtually a free port. Additionally, Singapore's traditional func- tion as a transit zone and transshipment point for the trade of nearby Southeast Asian countries continues unaffected by its trade controls. Moreover, legislation has been enacted to provide for the future establishment of free trade zones. Location Singapore is an island republic located off the southern tip of the Malay peninsula (West Ma- laysia), about 85 miles north of the equator. It consists of a main island and 40 adjacent islets which make up a total land area of about 225 square miles; its population numbers nearly two million. Singapore is separated from West Malaysia by the Strait of Johore which is tra- versed by a short causeway carrying a road and a railway. It is separated from Indonesia by the Singapore Strait. Singapore is situated at a focal point in Southeast Asia on international sea and air routes. Its port is one of the world's busiest, and is used by over 100 international shipping lines providing service to all parts of the world. Good air connections to all points are also avail- able, with 23 international airlines serving the country. Singapore's road and rail systems con- nect with those of West Malaysia, and beyond with those of Thailand. Internally, Singapore is served by a road network; railroad service ex- tends into the main port area and also to the Jurong port in the southwestern part of the island where a number of industrial enterprises, including bulk grain storage facilities, are lo- cated. Additionally, coastal carriers connect Singapore with nearby areas. Singapore's economy is heavily dependent on commerce and other activities related to trade and shipping. In recent years, however, manu- facturing has become increasingly important and the Government encourages the establish- ment of export industries. Authorized Operations Inasmuch as most of Singapore's trade con- tinues to move without the imposition of cus- toms duties or other restrictions, activities re- lating to trade may be undertaken throughout the country. For the storage of dutiable goods, government and private bonded warehouses are available. However, much of Singapore's transit trade is handled within an area immediately adjacent to the harbor under the jurisdiction of the Port of Singapore Authority. This area functions, in effect, as a specialized free trade zone. Goods may be loaded, unloaded, stored and trans- shipped within its confines. Goods do not pass through Singapore customs unless they are re- moved from this area. The Port Authority op- erates warehouses for the storage of goods, and will arrange movement of the goods within its jurisdiction pending transshipment. Sampling of cargoes held on Port Authority premises is subject to approval upon written application. Other forms of processing are generally not 111 permitted, but in some cases, again subject to written application and permission, assembly may be undertaken. Mixing, repacking and manufacturing are not permitted in Port Au- thority public warehouses, but may be under- taken in buildings specifically leased for such purposes within the port area or in other areas approved by the Government. Restrictions and Controls Special controls apply to the entry, handling and storage of dangerous goods. In addition, the entry, departure or transfer of goods to or from transit sheds and storage warehouses within the port area by shippers, agents or consignees is subject to certain doc- umentary requirements. Prior to the exporta- tion, reexportation or transshipment of goods from Singapore, export permits issued by the Registrar of Imports and Exports must be ob- tained. If the goods are dutiable, approval of the customs authorities is also required. Facilities Available The Port of Singapore Authority area com- prises 1,000 acres and includes 3 miles of com- mercial wharves. Covered transit sheds and open storage facilities totaling 1.3 million square feet and 900,000 square feet respect- ively, are available at all berths. In addition, there are warehouses with about 500,000 square feet of floor space for long-term storage. The wharves are fully mechanized and cargo- handling is carried out on a 24-hour basis. Fresh water and bunkers are obtainable at all deep water berths. Some trading firms operate their own ware- houses, and petroleum companies have their own tank farms and storage facilities. Jurong Wharves are in operation at the northwestern sector of the port in the Damar Laut Channel. This harbor serves the new Jurong Industrial Estate situated at the south- western corner of Singapore Island. Shore facil- ities include some 33,000 square feet of covered storage and 100,000 square feet of open stor- age. Bulk-handling equipment, including crane and overhead belt conveyor facilities, is available. Administering Authority The port area is administered by the Port of Singapore Authority, an autonomous statutory body. Mailing Address: Information about the facilities operated by the Port Authority may be obtained from: The Port of Singapore Authority P. O. Box 300 Singapore Inquiries regarding import and export con- trols and procedures, bonded warehouse opera- tions, etc., may be directed to: Director of the Trade Division Ministry of Finance Fullerton Building Singapore People's Republic of South Yemen Aden in the People's Republic of South Yemen is a free port. Location Aden is situated at the southern tip of the Arabian peninsula near the eastern entrance to the Red Sea. Until November 1967 a British colony, Aden is now part of the First Gover- norate, People's Republic of South Yemen. The country's five other governorates are located in the interior. The Republic is bordered to the east by the Sultanate of Muscat and Oman, to the north by Saudi Arabia and to the northwest by Yemen. The area is about 114,000 square miles in size and has a population estimated at about 1.5 million. Aden itself has a land area of some 75 square miles. Aden's economic importance has traditional- ly depended on its oil bunkering facilities, lo- cated midway on the main shipping routes from Europe to the Far East via the Suez Ca- 112 nal. In addition to free port activities, Aden serves as a transit zone for the entry of goods into other areas at the southern end of the Arabian peninsula. Aden has an international airport and is linked by road with Yemen. Authorized Operations Aden is a free port in that there are only five categories of goods subject to duties: (1) alcoholic beverages, e.g., whiskey, wines, beer, cider, and aerated waters such as seltzer; (2) tobacco and tobacco manufactures, e.g., ciga- rettes, cigars, chewing tobacco, and snuff; (3) non-potable alcoholic mixtures, e.g., rubbing alcohol, perfume and toilet preparations; (4) qat (a narcotic leaf); and (5) certain petrole- um products. All other goods may enter Aden duty-free. For handling the foregoing five categories of dutiable goods, there is set aside a special con- trolled area called the Trading Estate, with separate sections controlled by the Customs and Excise Department of the Ministry of Econo- my, Commerce and Planning. In these con- trolled sections dutiable goods may be held pending import into the Republic or transfer elsewhere. In the Trading Estate, goods may be stored, packed, mixed, sorted, and processed. Items in the five dutiable categories may be taken directly from customs controlled sections of the Estate for transshipment free of duties. In cases where duties have been paid on goods brought into Aden and where such goods are later shipped elsewhere, such duties may be refunded on application for drawback. Restrictions and Controls The regulations governing the operation of the free port and the Trading Estate contain no unusual restrictions. However, there are special rules covering the admission and han- dling of such items as explosives, munitions, and petroleum. throughout the free port individually-owned warehouses, including bonded warehouses. Administering Authority The free port facilities and the Trading Es- tate are administered by the Aden Port Trust, a semi-autonomous government agency under the direction of the Office of the President of the Republic. Mailing Address: Aden Port Trust Steamer Point Aden People's Republic of South Yemen Thailand has established a transit zone facility (for Laos) at Bangkok. Location Bangkok is Thailand's capital and principal port of entry. It is situated about 17 miles up- stream on the Chao Phraya River from the head of the Gulf of Thailand. Rail and highway transportation link the port with Laos at Nong- khai, a point on the Thai-Laotian border near Vientiane, the administrative capital of Laos. The border itself is formed by the Mekong Riv- er, aross which cargoes must be ferried. Laos is a country of about 91,000 square miles and 2.7 million people. The Mekong River is its principal commercial artery; however, roads also link major population centers and afford access to several river-crossing points between Laos and Thailand. There are no rail- roads in Laos. Most of the country's foreign trade with the west is handled through the port of Bangkok. Facilities Available The Trading Estate covers about 20 acres. Covered storage facilities in the Estate include about 200,000 square feet. In addition, there are Authorized Operations Goods in transit are not subject to Thai cus- toms duties. The only operation authorized in the zone is storage, pending transshipment. 113 Restrictions and Controls The transshipment of goods between the port of Bangkok and Laos is subject to prescribed air, truck or rail routes. Facilities Available There is set aside in the port of Bangkok, for the purpose of storing Laotian shipments, one transit shed with approximately 94,000 square feet of storage space. In addition, the port of Bangkok also contains a bonded ware- house facility in which goods may be sorted, packed or repacked prior to transshipment or entry into the customs territory of Thailand. Administering Authority and Mailing Address : These facilities are administered by: The Port Authority of Thailand Port of Bangkok Klongtoey Bangkok, Thailand Information may also be obtained from: The Director-General Thai Customs Department Klongtoey Bangkok, Thailand The Harbor and Marine Transport Department Yodha Road, Talad Noi Bangkok, Thailand 114 AFRICA MED I TERRA NEA N SEA ATLANTIC OCEAN 6 13 14 Tangier*^ A Me , Ceuta rP Canary Islands 12 f 'ft' I SPANISH SAHARA SENEGAL GAMBIA PORTUGUESE GUINEA SIERRA LEONE LIBERIA French Territory of Afars and Issas 2 ATLANTIC OCEAN BOTSWANA SWAZILAND LESOTHO 1. Lobito, Angola 2. French Territory of Afars and Issas 3. Abidjan, Ivory Coast 4. Monrovia, Liberia 5. Tripoli, Libya 6. Tangier, Morocco 7. Beira, Mozambique 8. Lourenco Marques, Mozambique 9. Dakar, Senegal 10. Dar es Salaam, Tanzania 11. Lome, Togo 12. Canary Islands, Spain 13. Ceuta, Spain 14. Melilla, Spain INDIAN OCEAN Africa COUNTRY Angola French Territory of Afars and Issas Ivory Coast Liberia Libya Morocco Mozambique Senegal Tanzania Togo TYPE OF FACILITY PLACE Transit Zone Free Port Transit Zone Free Trade Zone Free Trade Zone Free Trade Zone Transit Zones Transit Zone Transit Zone Free Trade Zone Lobito Abidjan Monrovia Tripoli Tangier Beira, Lourenco Marques Dakar Dar es Salaam Lome 117 Chapter 1 1 Free Trade Zones and Related Facilities in Africa Angola Angola has established transit zone facilities for the Democratic Repub- lic of the Congo (Kinshasa) and for Zambia in the port of Lobito. Facilities Available No special facilities have been set aside for the storage of transit shipments; such ship- ments may be stored in any port area facility. The storage accommodations in the port in- clude 275,000 square feet of covered space, 775,000 square feet of open space, and special facilities for ore and coal. In one warehouse, cold storage facilities are available for frozen fish and fresh fruit. Location Lobito, a city of about 55,000, is one of An- gola's two principal maritime ports. It is situ- ated on the Atlantic coast about midway be- tween Luanda on the north and Mocamedes on the south. Lobito functions as a major ore and mineral export port, and is served by over 1,200 ships annually. The port is the Atlantic ter- minus of a rail line extending east to Katanga in the Congo; this rail line links with the rail systems of Zambia, Southern Rhodesia and South Africa. About one-half of Lobito's ex- port tonnage and one-third of its import ton- nage are transit shipments, bound to or from the Congo or Zambia. Restrictions and Controls Special handling regulations obtain in the case of explosives. Administering Authority The Direccao de Exploracao do porto do Lobito (Lobito Port Directorate), an adminis- trative department of the Angolan provincial government, administers the port which is a government-owned facility. Private shipping agencies located in Lobito usually arrange the transfer of transit shipments. Authorized Operations Angolan customs duties are not imposed on transit shipments. Transit goods may be stored in the port area pending onward shipment. Other operations are not authorized. Mailing Address: Direccao de Exploracao do Porto de Lobito Fiscalizacao do Caminho de Ferro de Benguela Caixa Postal 16 Lobito, Angola 118 French Territory of Afars and Issas The French Territory of Afars and Issas is a free port. Its port of entry, Djibouti, also functions as a transit zone for Ethiopia. Location The French Territory of Afars and Issas, formerly known as French Somaliland, is situ- ated in the northeast corner of Africa. It is bounded on the east by the Gulf of Aden, on the south by the Somali Republic and on the west and north by Ethiopia. It has a land area of about 9,000 square miles and a population of approximately 80,000, half of whom live in the capital and commercial center, Djibouti. The economic life of the territory is princi- pally commercial, centered around the port ac- tivities of Djibouti and the operations of the Franco-Ethiopian Railroad. Djibouti is locat- ed on an inlet of the Gulf of Aden near the entrance to the Red Sea, roughly opposite the port of Aden. This location affords it access to major maritime routes linking the Indian Ocean and Mediterranean Sea via the Red Sea and Suez Canal. Djibouti is also the northern terminal of the Franco-Ethiopian Railroad which links it with Addis Ababa, the capital of Ethiopia, a distance of about 500 miles. About half of Ethiopia's foreign trade is handled through Djibouti. In addition to maritime and rail transporta- tion facilities, Djibouti is served by an inter- national airport offering connections with Ad- dis Ababa, Aden, France and the Malagasy Republic. Road transportation is primarily local. Authorized Operations The French Territory of Afars and Issas does not have a customs tariff and does not subject foreign trade operations to licensing controls. The transit, transshipment and ex- port of goods from the Territory are free of administrative formalities as well as customs duties or other revenue measures. However, the Territory does maintain a system of inter- nal consumer taxation which applies to both locally produced and imported goods intended for domestic consumption. The level of this tax is presently 18 per cent ad valorem for most items, but higher on gasoline, alcohol and tobac- co. Goods specifically exempted from the inter- nal consumer tax include raw materials for export industries, a number of food items and supplies for vessels, aircraft and railroads. Goods not intended for local consumption are tax-free. The principal activity authorized in the port is storage; however, other activities may be permitted with prior approval of the appropri- ate authorities. Restrictions and Controls Special regulations control the storage of in- flammable or dangerous goods. Facilities Available Public warehouses in the port area have cov- ered storage space totaling about 132,400 square feet. Private warehouses afford an ad- ditional 96,900 square feet. There are also re- frigerated facilities for the storage of meat. Open storage space in the port areas amounts to about 1.9 million square feet. Ship chandler- ing facilities are available. Administering Authority The port of Djibouti is administered by a Port Director who is accountable to the terri- torial Minister of Public Works and the Port, and by an advisory board of directors. Mailing Address: Directeur du Port (Port Director) Port de Djibouti Djibouti French Territory of Afars and Issas. Service de lTnformation, Presse, et Tour- isme (Information, Press and Tourist Service) Djibouti French Territory of Afars and Issas. 119 Chambre de Commerce (Chamber of Commerce) Place La Garde Djibouti French Territory of Afars and Issas Ivory Coast The Ivory Coast has established tran- sit zone facilities for neighboring landlocked countries (Upper Volta, Mali and Niger) at the port of Abid- jan. Facilities Available No special facilities have been set aside for transit shipments. Such shipments may be stored in facilities within the port which in- clude approximately 1,120,000 square feet of warehouse space, 130,000 square feet of open shed space and some 5,120,000 square feet of open air storage space. Shipments may also be stored in privately-operated bonded warehouses outside the port area. Restrictions and Controls Location The Ivory Coast is situated on the west coast of Africa facing southward on the Gulf of Guinea. It is bounded on the east by Ghana, on the west by Liberia and Guinea, and on the north by Mali and Upper Volta. Its capital and major maritime port is Abidjan, which has a population of about 400,000. More than 76 ship- ping companies, including eight U.S. concerns, have offices or agents in Abidjan. Abidjan is the terminus of a rail line extending north to Ouagadougou, capital of Upper Volta. The road system also connects with the roads of Upper Volta and beyond into Niger, and with roads extending into Mali. Merchandise in transit must be bonded. The bonding usually takes the form of a guarantee by a bank, freight forwarder or large importer that the goods will, at a later date, either be transshipped or entered through Ivory Coast customs. Administering Authority The port of Abidjan is administered by La Direction du Port d' Abidjan (Port of Abidjan Administration), which is a public corporation under the supervision of the Ministry of Public Works and Transportation. Authorized Operations Goods in transit through the port of Abidjan are in general given the same treatment as goods intended for clearance through customs. All goods are allowed to remain without cus- toms entry for a period of one month. At the expiration of this period the customs authori- ties serve a personal notice on the consignee, or, failing that, publish a notice. Thirty days after service or publication of the notice the goods can be sold by the customs. The con- signee or his agent can clear the goods or make arrangement for their shipment up to the day of the final sale. The only operation authorized is the storage of goods pending onward shipment. Mailing Address: La Direction du Port d'Abidjan B.P. 1360 Abidjan Ivory Coast An additional source of information is a fed- eration of shipping trade associations: Federation Maritime B.P. 1727 Abidjan Ivory Coast 120 Liberia at Monrovia and a 500-acre tract immediately adjacent to the harbor area. Liberia has a free trade zone at Mon- rovia. Liberia, a country of 43,000 square miles, is located at the southwest corner of the western bulge of the African continent. On the south it has a 350-mile Atlantic coastline, while to the west it is bordered by Sierra Leone, to the northwest and north by Guinea, and to the northeast and east by the Ivory Coast. Liberia has a population of about 1.1 million. Liberia's economy is based on the production and export of iron ore, rubber and timber; how- ever, a large portion of the population is engaged in subsistence-level agriculture. Liber- ia also derives important revenues from the registry of foreign-owned ships. The international transportation facilities in Liberia include one major seaport and one smal- ler seaport served by about 17 shipping lines, one major international airport plus a smaller daytime-only international airport served by about one dozen local and international carriers, and a road system which connects at several points with towns on the borders of Sierra Leone, Guinea, and the Ivory Coast. A 1,880- mile road network furnishes the chief means of internal transportation. However, large por- tions of the country are accessible only by rough track or trail. Three iron ore railway lines link mining areas with the ports, but the lines are not interconnected. Authorized Operations The free trade zone (Free Port of Monrovia) was established in 1948 under agreement be- tween the United States and Liberia. Full con- trol of the facility was transferred to the Gov- ernment of Liberia in 1964. Goods may be brought into the free trade zone without payment of Liberian customs duties, and remain free of such duties while held in the zone, or if subsequently transship- ped or reexported. Goods transferred into the customs territory of Liberia for domestic con- sumption, however, become liable to full duty payment. Operations authorized within the free trade zone include transshipping, unloading, storing, mixing, blending, repacking, processing and manufacturing. Oceangoing vessels engaged in international trade may be furnished fuel and other provisions free of Liberian customs duties. Provision also exists for the overland trans- portation of goods in transit to neighbor- ing countries from the free trade zone. In such cases a permit issued by the customs authorities is required. Restrictions and Controls Special regulations pertain to the handling of ammunition and explosives. Free Trade Zone at Monrovia Location Monrovia is the capital of Liberia, its com- mercial center and principal transportation hub. It has a population estimated at 86,000. The port of Monrovia is the country's principal port, annually handling over 440,000 tons of general cargo. The city is also served by an international airport. A road network radiating from Monrovia extends to the Sierra Leone, Ivory Coast and Guinea borders. The free trade zone, called the "Free Port of Monrovia," includes all of the port facilities Facilities Available The free trade zone has two large and several small transit sheds offering about 160,000 square feet of covered storage. There are also general cargo warehouses, refrigerated storage space, tank storage for various types of petro- leum products, and bulk storage facilities for iron ore. Space may be leased from the admin- istering authority for storage, assembly or manufacturing operations. A private warehouse operator also has facilities in the zone and will undertake storage and cargo-handling opera- tions for zone users. Additionally, the free trade zone has general cargo and specialized wharves and piers, in- 121 eluding a fishing pier with freezing and storing facilities. Administering Authority The free trade zone (Free Port of Monrovia) is administered by the Monrovia Port Manage- ment Company, Ltd., operating under an agency contract with the Government of Liberia. The Company is comprised of several U.S. and Liberian enterprises, and includes as one of its owners the Government of Liberia. Mailing Address : Monrovia Port Management Company, Ltd. 26 Broadway New York, New York 10004 Port Director Free Port of Monrovia Monrovia, Liberia Libya A free trade zone has been established at Tripoli, Libya. The Libyan Arab Republic is situated on the north-central coast of Africa, facing the Med- iterranean Sea. It has land borders with the United Arab Republic to the east, with Tunisia and Algeria to the west, and the Sudan, Niger and Chad to the south. Libya has a total land area of about 680,000 square miles and a pop- ulation of about 1.7 million, 85 percent of whom are concentrated in the coastal areas. Aside from a comparatively fertile area along the northern coastline, Libya's land area is mostly desert, interspersed with oases. Agricul- ture and grazing are the traditional economic activities. In recent years, however, petroleum has become the chief component of the economy. Libya has three principal deep water ports, Tripoli, Benghazi and Tobruk. In addition, there are two international airports. Internal trans- portation facilities are, for the most part, con- centrated in and around the coastal areas. The country's principal transportation artery is a 1,131-mile coastal road extending from the east- ern to the western boundaries. North-south secondary roads feed into this system; however, they generally do not extend far into the hinter- land. The more remote areas of the country are accessible only over rough track or by air. Free Trade Zone at Tripoli Location Tripoli, on the Mediterranean coast in west- ern Libya, is one of the country's two co- capitals as well as its largest city, principal com- mercial center and leading port. Its population is about 250,000. Tripoli functions as the distribution center for the western part of the country, i.e., the area made up of the former provinces of Tripo- litania and the Fezzan. Tripolitania has a total land area of 136,000 square miles and a popu- lation of 900,000, while the Fezzan encompasses 213,000 square miles and 71,000 people. The port of Tripoli is served by a number of international shipping lines. This city also has the country's principal international airport. Tripoli is located on the coastal road which af- fords a means of transporting goods shipped through the port to other populated areas in the north of the country. In addition, a major road project which is designed to connect the coastal road with Sebha, the principal city of the Fezzan, is under construction. When com- pleted it may afford a convenient means of ac- cess to that area as well. The free trade zone is located in the port area of Tripoli. Authorized Operations The free trade zone at Tripoli was estab- lished pursuant to Law No. 10 of 1959 and op- erates under regulations promulgated on De- cember 31, 1962. It opened in 1964. Goods, other than those prohibited from cir- culation in Libya, may be brought into the free trade zone without payment of customs duties. They remain free of such duties while held in the zone or if subsequently reexported. Goods transferred into the customs territory of Libya become liable to full payment of applicable cus- toms duties and compliance with other import regulations. 122 In the free trade zone goods may be inspected stored, selected, cleaned, mixed and repacked. Other types of operations must be approved on an individual basis. Director-General of Customs Department of Customs and Excise Ministry of Finance Tripoli, Libya Restrictions and Controls The entry and use of explosives, arms, am- munition and highly inflammable or dangerous goods are subject to special restrictions. Docu- mentary controls are exercised over shipments into and from the free trade zone. Application must be made to the Director of the zone for entry or removal of goods. Firms undertaking operations within the free trade zone must be licensed by the Minis- try of Finance. The regulations permit such licenses to be issued for periods of validity ranging from 3 months to 15 years. Holders of licenses with validity periods of less than 1 year may not construct installations within the zone. The construction of installations is sub- ject to the supervision of the administering authority. In general, goods brought into the zone must be deposited in covered areas. Exception is made for those types of goods normally stored in open space, e.g., automobiles and bulky ma- chinery. Exception may also be made for other goods upon individual request. Facilities Available The free trade zone at Tripoli has a total area of about 630,000 square feet. At present there is one warehouse with a capacity of 2,500 tons for goods in transit. Provision has been made to construct additional warehouse space as required. Administering Authority The free trade zone is administered by the Tripoli Port Authority, an agency of the Min- istry of Communications. Mailing Address : Tripoli Port Authority Department of Ports and Lights Ministry of Communications Tripoli, Libya Morocco Morocco has established a free trade zone at Tangier. The Kingdom of Morocco occupies the north- western corner of the African continent. It is bounded on the north by the Mediterranean Sea and the Strait of Gibraltar, on the west by the Atlantic Ocean, on the south by Spanish Sahara, and on the east and southeast by Al- geria. In all it has a land area of 172,000 square miles and a population of 13.7 million. Morocco's economy is primarily agricultural; however, important revenues are derived from mineral resources, particularly phosphates. Light industry is also being developed. Most of Morocco's population centers are lo- cated in the coastal areas. Its principal cities are linked by a 1,192-mile railroad network which extends from Marrakech in the south to Tangier in the north and from the Atlantic coast on the west to the Algerian border on the east. The Moroccan rail system links with the Algerian rail system at the border town of Oujda. Morocco's highway system is made up of 11,200 miles of primary and secondary roads and over 23,000 miles of unsurfaced roads. In- ternational trade is handled through six major maritime ports on the Atlantic coast and three international airports. Casablanca is the prin- cipal seaport and is regularly served by over 100 international shipping lines. Free Trade Zone at Tangier Location Tangier, a city of 150,000, is the northern- most of Morocco's Atlantic ports and the prin- cipal point of entry for foreign tourists. It is situated near the Atlantic entrance to the Strait of Gibraltar, opposite Spain to the north. Across the Strait to the northeast is the British 123 colony and free port of Gibraltar. Tangier is one of Morocco's major maritime ports and is served by more than 30 international shipping companies. The city also has an international airport. Its free trade zone, called the "Com- mercial Free Zone," is located within the port area. Tangier was incorporated into the Kingdom of Morocco in 1959 and at that time lost its his- toric status as a free port. Between 1959 and the present, light industry and tourism have superseded commercial activities in importance to the local economy. The Commercial Free Zone was established to provide a facility through which the commercial sector might re- sume its traditional trade activities. It will be paralleled by an industrial free zone presently under construction at a site inland from the port area. Authorized Operations The Tangier Commercial Free Zone was au- thorized by Dahir (edict) No. 1-61-426, dated December 30, 1961. It was opened on July 20, 1967. Goods of foreign origin may be brought into the free trade zone without payment of customs duties or other import levies. Such duties must be paid, however, if the goods are subsequently transferred from the zone into Moroccan cus- toms territory. Goods of Moroccan origin enter- ing the free trade zone are considered exports. Goods entering the free trade zone may be stored pending further disposition as exports or reexports. Usually, imports from the zone into the Moroccan domestic market are not authorized. The types of processing permitted on goods brought into the Commercial Free Zone are limited to those of a "commercial" as distinguished from "industrial" character. Per- missible operations include sorting, mixing, sampling, screening, repacking, preserving and such other operations as may be authorized by the Ministry of Finance. Ship chandlering and, subject to certain conditions, the sale of goods to foreign tourists are also authorized. In addition to activities involving the move- ment or processing of merchandise, financial and brokerage transactions may be carried out in the Commercial Free Zone. Within the free trade zone, Moroccan currency is considered foreign exchange. There are no taxes on opera- tions, profits, etc., in the zone. Restrictions and Controls Goods prohibited from circulation in Morocco, e.g., narcotics, dangerous and contaminated goods, are not permitted entry into the Com- mercial Free Zone. Retail sales are also prohibited; however, firms operating within the zone are permitted to make sales to foreign tourists, provided that the seller makes arrangements for the direct export of the goods. Storage time for goods brought into the zone is limited to a maximum period of 2 years. Goods stored on public premises, i.e., storage facilities operated by the administering auth- ority, may not be processed, although simple inspection and repair of packaging may be car- ried on. Other activities are limited to privately- operated facilities. In general, processing operations of a type which might more appropriately be performed in the future industrial free zone may not be permitted in the Commercial Free Zone. Firms wishing to establish their own private warehouses in the Tangier Commercial Free Zone must make application to the adminis- tering authority. Facilities Available The administering authority of the Com- merical Free Zone has available for public stor- age 53,800 square feet of covered space. Other warehouses are privately operated. The zone contains 333,700 square feet of land available for private leasing, in lots of varying sizes. Subject to approval of the administering auth- ority, firms may construct their own ware- houses or other facilities on such leased land. Administering Authority Both the port of Tangier and the Tangier Commercial Free Zone are administered by the Moroccan Ministry of Public Works and Com- munications. Development of the zone is guided by a commission headed by the Governor of Tangier Province, with representation from 124 various government ministries, and the man- agement of the Commercial Free Zone. Mailing Address: Zone Franche Tanger, Maroc (Morocco) Authorized Operations Mozambique customs duties are not levied on transit shipments ; however, nominal transit fees are imposed. The only operation authorized for transit shipments in either port is storage pending onward shipment. Mozambique Mozambique has established transit zone facilities for South Africa, Swa- ziland, Zambia, and Southern Rhode- sia in the port of Lourenco Marques; and for Zambia, Southern Rhodesia, Malawi and the Katanga Province of the Democratic Republic of the Congo (Kinshasa) in the port of Beira. Location Mozambique, an Overseas Province of Por- tugal, is situated on the southeastern portion of the African continent facing the Indian Ocean. Lourenco Marques, served by about 160 ships per month, and Beira, served by about 100 ships per month, are its principal ports. Lourenco Marques is situated at the extreme southern end of the province, about 50 miles west of the South African and Swaziland bor- ders. The city, which has a population of about 183,000, is the provincial capital and principal port. It is connected by rail with the South African, Swaziland, Rhodesian and Zambian rail systems. Beira is situated 450 miles north of Lourenco Marques. It is a principal port of entry for Malawi, Southern Rhodesia, Zambia and Ka- tanga. It is linked by rail with the systems of Rhodesia and Malawi, and via the Rhodesian system with Zambia and the Democratic Re- public of the Congo. Both Lourenco Marques and Beira have international airports. The im- portance of transit trade in Mozambique is il- lustrated by the fact that about three-fourths of the traffic passing through Mozambique ports is transit traffic. Restrictions and Controls Prior arrangements are required in the case of explosives or dangerous materials. If their storage is required, they must be stored in a special area. Facilities Available In both ports there are storage sheds and open mineral and coal dumps available in the port areas. Additionally, outside the port areas there are bonded warehouses and other special cargo facilities. Administering Authority Both ports are under the administration of the Mozambique Administration of Ports, Rail- ways and Transport Services. Mailing Address : The Director Mozambique Administration of Ports, Railways and Transport Services Lourenco Marques Mozambique Director of Operations of the Port and Railroad of Lourenco Marques Lourenco Marques Mozambique Director of Operations of the Port and Railroad of Beira Beira Mozambique 125 Senegal Senegal has established a transit zone facility for Mali in the port of Dakar. Location Senegal is situated on the west coast of Africa facing the Atlantic Ocean. It is bordered by Mauritania on the north, Portuguese Guinea on the south, Guinea on the southeast and Mali on the east. Senegal is a country of 75,700 square miles and has a population of 3.6 million. Dakar, with a population of 550,000, is the capi- tal and principal port. Dakar is connected with Bamako, the capital of Mali, by the Dakar- Niger Railway. Transit Zone Facilities at Dakar A section of the port of Dakar is reserved for the handling and storage of transit shipments to and from Mali. Senegal does not impose re- strictions or levy customs duties on such ship- ments. The facility is administered by the Syndicat des Agents Maritimes de la Cote Occidentale d'Afrique (SOCOPAO) — (Mari- time Agents Association of the West African Coast). Further information about the transit area may be obtained from that organization. Mailing Address: Syndicat des Agents Maritimes de la Cote Occidentale d'Afrique (SOCOPAO) Transitaire (Mole 3) B.P. 223 Dakar, Senegal Tanzania Tanzania has established a transit zone facility for Burundi, Rwanda, the Democratic Republic of the Congo (Kinshasa) and Zambia in the port of Dar es Salaam on the Indian Ocean and at the inland port of Kigoma on Lake Tanganyika. Additionally, the port of Mtwara in the south near the border of Mozambique is now being used to handle some shipments of cop- per from Zambia. Tanzania has not established any free trade zones and the only customs-privileged facility is for transit goods in bond to the coun- tries mentioned above. Location The mainland portion of the United Repub- lic of Tanzania occupies the area formerly known as Tanganyika. It has a 550-mile coast- line on the Indian Ocean, and its principal sea- port is Dar es Salaam, capital of Tanzania with a population of about 270,000. Rwanda, Burun- di and the Democratic Republic of the Congo border the country on the west, Uganda and Kenya on the north, and Mozambique, Zambia and Malawi on the south. Goods destined to or from Burundi, Rwanda or the Congo are nor- mally transshipped via rail and lake steamer or overland as the rail system does not extend beyond Kigoma. Authorized Operations Tanzanian customs duties are not levied on transit shipments. The only operation autho- rized for such goods is storage pending onward shipment under bond. Facilities Available In Dar es Salaam the storage space available for transit shipments includes 384,000 square feet of covered space and 182,000 square feet of open space on the Main Quay (Berths 1 to 3) and 47,000 square feet of covered space on the lighterage wharves. Six miles from the port, a special transit depot for Zambian traffic has recently been built with a covered area of 200,- 000 square feet and 220,000 square feet of open stacking space. Transit facilities with covered space are also available at the port of Mtwara. Additional transit facilities for Zambian ship- ments will be available when three new deep water berths at Dar es Salaam are completed. For further information on the facilities at 126 Tanzanian sea ports and the lake port in Ki- goma, inquiry should be made of the adminis- tering authority or the Port Manager. Restrictions and Controls Inquiry should be made of the administering authority or the Port Manager. Administering Authority The transit facilities in Dar es Salaam and Kigoma are operated by Agence Maritime In- ternational (E.A.) under a "quadripartite com- mission" established to administer the former- ly Belgian-operated installations in these ports. The commission includes representatives of the Governments of Tanzania, the Democratic Re- public of the Congo (Kinshasa), Burundi and Rwanda. Agence Maritime International also handles clearance of all Zambian traffic. Mailing Address : Agence Maritime International (E.A.) Main Quay P.O. Box 9041 Dar es Salaam, Tanzania Regional Commissioner East African Customs and Excise Depart- ment P.O. Box 9053 Dar es Salaam, Tanzania Port Manager East African Railways and Harbours Ad- ministration P.O. Box 1130 Dar es Salaam, Tanzania Togo Togo has a free trade zone at Lome. Togo is a West African country with a total land area of 22,000 square miles and a popula- tion of approximately 1.7 million. Bounded on the west by Ghana, on the north by Upper Vol- ta and on the east by Dahomey, to the south it has a short coastline on the Gulf of Guinea. The economy of Togo is primarily agricul- tural with coffee and cocoa the principal cash crops. Industrial activity is largely based on the processing of agricultural commodities and phosphate mining, which has expanded in re- cent years. Togo is an associate member of the European Economic Community (EEC or "Common Market") and of several West Afri- can regional organizations including the West African Customs Union. It is also signatory to the General Agreement on Tariffs and Trade (GATT). Transportation facilities in Togo consist of 2,933 miles of roads of which about 140 miles are paved and 275 miles of railroad track. The roads connect at several points with road sys- tems of neighboring countries, but cannot han- dle all-weather traffic. Togolese rail lines serve to link the port of Lome with phosphate and agricultural producing centers; they do not connect with the railroad systems of neighbor- ing countries. Lome is the only international seaport in Togo except for a bulk phosphate jetty at Kpeme; it is the site of an international airport. Free Trade Zone at Lome Location Lome is the capital, commercial and industri- al center and transportation hub of Togo. Its population numbers about 126,000. Roads, mostly unpaved, radiate from Lome to other population centers, and two rail lines extend from the city in northerly and westerly direc- tions. The port of Lome is served by a number of international shipping lines and the airport by several international air carriers. There is daily air service between Lome airport and Europe. The free trade zone is a 90-acre tract en- closed by a customs fence in the port of Lome and referred to locally as the "Free Port Land Area." The free trade zone privileges and re- strictions described under the following head- ings generally apply only within this zone. However, the title "Free Port of Lome" is used to designate the entire port complex, composed of harbor and berthing facilities and a 1,675- acre port industrial zone in addition to the actual free trade zone area. 127 Authorized Operations Government Decree 68-106 of June 5, 1968 prescribes the regulations applicable to the free trade zone area. It provides that the zone may be used for the unloading, transshipping and storing of imported goods without the payment of Togolese customs duties. Customs duties be- come payable, however, if goods are subse- quently transferred from the free trade zone for use or consumption in Togo. Goods of Togo- lese origin may also be brought into the zone. Upon entry into the zone such goods will be considered exports unless steps are taken to retain their nationality. Customs-privileged goods warehoused in the free trade zone may be repacked, sorted, divid- ed or subjected to similar handling operations intended to preserve them in good condition. Such handling does not result in any prefer- ential tariff treatment if the goods are subse- quently imported into Togo. With the prior permission of the Customs Administration, light industrial operations based on the pro- cessing of foreign or mixed foreign and local components and intended primarily for export sale may also be undertaken in the free trade zone. If products of such operations are subse- quently imported into Togo, customs duties are levied only on the imported raw materials or components. Ship chandlering and, with the authorization of the Customs Administration, sale of cus- toms-privileged goods to tourists are permitted within the free trade zone area. Restrictions and Controls Access to the free trade zone is restricted to persons bearing permits issued by the adminis- tering authority. With the exceptions noted un- der Authorized Operations above, the sale, pur- chase or consumption of customs-privileged goods in the free trade zone is prohibited. The maintenance of inventory and account- ing records and other documentary controls pertaining to the storage, processing or trans- portation of customs-privileged goods is re- quired of firms operating in the free trade zone area; the form of such records is subject to the approval of the Customs Administration. Facilities Available The free trade zone area is reserved for warehouses and some small light industry. The administering authority is empowered to allot land parcels within the free trade zone area and has responsibility for notifying the Cus- toms Administration of any proposed construc- tion within the area. Information on the facili- ties within the zone may be obtained from the administering authority. Administering Authority The free trade zone is administered by the Port Authority for the Port of Lome, Port Autonome de Lome. Operations within the free trade zone are subject to regulation by the Customs Administration. Mailing Address: Port Autonome de Lome B. P. 1225 Lome Togo 128 ■&U.S. GOVERNMENT PRINTING OFFICE; 1970 O 382-263 I PENN STATE UNIVERSITY LIBRARIES ADDDD71Eflfl3D?