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Free-trade zones are created to attract trade and investment, but they are also vulnerable to crime. With the adoption of the OECD’s Code of Conduct for Clean Free-Trade Zones, it is more important than ever to understand and address the risks of illicit trade and financial crime. Our project explores international experience in doing so. It also offers an online risk assessment tool that businesses can use to understand their own exposure to the risk of facilitating crime as a result of operating in free-trade zones.
The project is funded by PMI Impact, a global funding initiative by Philip Morris International.
Aims and Objectives
The project identifies factors that render free-trade zones vulnerable to illicit trade and financial crime and proposes measures to detect and prevent their criminal exploitation. To explore common challenges and responses that transcend countries’ individual circumstances, it examines four country case studies: Morocco, Panama, Singapore and the UAE.
Based on over 70 interviews, two research workshops and an analysis of publicly available literature, the project has already generated a published report on criminal risks of free-trade zones, an online risk assessment tool and multiple presentations, including the provision of parliamentary testimony on the introduction of freeports in the UK and broader responses to relevant governmental consultations.
Risk assessment tool: https://ftz-risk.rusi.org
Improving Governance and Tackling Crime in Free-Trade Zones’ (project’s main report, October 2020);
‘Free Ports, Not Safe Havens: Preventing Crime in the UK’s Future Freeports’ (RUSI Briefing Paper, April 2020).
Responses to inquiries and testimony
Episode 8: Freeports in the UK, Financial Crime Insights Podcast (podcast, 18 December 2020).
‘Freeports in the UK: Securing the Benefits, Preventing Crime’ (webinar, April 2020).
‘Trade Based Money Laundering – Part 1’ (webinar, The Intelligence Download, BAE Systems, November 2019)
‘Trade Based Money Laundering – Part 2’ (webinar, The Intelligence Download, BAE Systems, November 2019)
‘Have Your Cake and Trade It: Is it Possible to Promote Legitimate Commerce While Reducing Illicit Trade?’ (project team contribution);
‘Addressing the Abuse of Trade for Money Laundering Purposes’ (by Jonathan Draper, BAE Applied Systems Intelligence);
‘Transparency in the Backbone of Global Supply Chains: Foreign Trade Zones’ (by Dr Clay Fuller); and
‘Free Trade Zones and Financial Crime – A Faustian Bargain?’ (project team contribution).
‘Freeports: Harbouring Criminality in Brexit Britain?’ (Alexandria Reid, RUSI).
In 2020, RUSI provided a written briefing on best practices in securing free trade zones for the Dubai Free Zones Council.
In the same year, RUSI experts submitted written evidence to multiple UK Government inquiries regarding the introduction of freeports, and gave oral evidence to the International Trade Committee’s Inquiry on UK Freeports. The project team have also delivered presentations to HM Treasury and The Joint Money Laundering Intelligence Taskforce (JIMLIT).