II.

RECOMMENDS that Members and non-Members having adhered to the Recommendation (hereafter the ‘Adherents’), promote transparency in order to deter the abuse of FTZ as conduits for illicit trade. To this effect, Adherents should, in a manner which is non-discriminatory and does not create undue barriers to trade: 1. Ensure that the legal framework for FTZ, established in their territory or that are otherwise under their administrative control, • Provides for the right of competent authorities to require relevant data, documents, samples and other information related to the production and movement of goods, and to carry out, in accordance with domestic law, ex officio checks at any time on goods stored, manufactured or packaged and services provided or activities conducted in FTZ. • Allows for competent authorities to take appropriate actions and measures in accordance with their domestic law. • Empowers competent authorities to examine merchandise before or at the time of admission to a FTZ, or at any time thereafter, if the examination is considered necessary to facilitate the proper administration of any law, regulation, or instruction which the competent authority is authorised to enforce. • Empowers competent authorities to enforce applicable prohibitions and restrictions on activities carried out within the FTZ, having regard to the nature of the goods in question, the requirements of customs supervision, or security and safety requirements. • Empowers competent authorities to prohibit persons who do not provide the necessary assurance of compliance with customs provisions from carrying out activities in a FTZ. • Prohibits legal or natural persons convicted of illegal economic or financial activities from operating within FTZ. • Ensures that the perimeter and entry and exit points of FTZ are subject to competent authorities’ supervision. • Ensures that goods, persons and means of transport entering and leaving the FTZ are subject to effective controls. • Ensures that the economic operators that are allowed to operate within FTZ are physically located within the FTZ, and that they communicate to the competent authorities the identity of the clients in their operations. Where the client acts as an agent or representative, then the economic operator should also communicate the identity of the principal, that is, the person(s) on whose behalf the agent acts, to the competent authorities. 2. Ensure competent authorities have access to aggregated statistical data on goods entering and leaving FTZ on the basis of their tariff classification, and information that identifies the owner(s) of goods. 3. Cooperate internationally in the exchange of law enforcement information, and consult with competent authorities and affected industries in investigations and other legal or administrative proceedings concerning specific cases of misuse of FTZ related to illicit trade. This includes means such as: • Sharing financial and administrative information spontaneously and upon request, to support the provision of evidence in judicial proceedings, or to ensure and further the effective supervision and control of FTZ and the prevention of their misuse, in accordance with domestic law. • Making better use of and adherence to current arrangements for Customs to Customs cooperation, as required through Customs Mutual Assistance Agreements, and other law enforcement information sharing and disclosure gateways and protocols. • Cooperating and assisting in the development and implementation of policies and practices to counter illicit trade in FTZ, including technical assistance to share and develop improved systems for record keeping by competent authorities, FTZ and economic operators. 4. Enhance domestic inter-agency co-operation, including obligations to report suspicions of illegal behaviour to the competent public authorities, information sharing between agencies; and other co-operation mechanisms such as joint investigations and joint intelligence centres. 5. Promote awareness amongst competent authorities and private sector stakeholders (e.g. major intermediaries including shipping agents, freight forwarders, customs brokers and logistics companies) to understand the roles and responsibilities of operating in an FTZ, as well as risks related to FTZ operations. 6. Foster partnerships among stakeholders to counter illicit trade emanating from high risk FTZ, such as those that have not implemented the Code of Conduct for Clean Free Trade Zones, which is set out in the Annex to this Recommendation and forms an integral part thereof. This includes efforts to encourage the business community that makes use of FTZ, or that finances operators within FTZ, to conduct business in or engage with FTZ that are compliant with the Code of Conduct for Clean Free Trade Zones. 7. Monitor the activities of FTZ and publish annual indicators that help contribute to an evaluation of their risk of facilitating illicit trade. 8. Develop relevant prior non-compliance or enforcement statistics, including customs detentions and seizures of illicit goods originating, or in provenance from FTZ, and enforcement actions already taken regarding that FTZ. 9. Conduct targeted operations with respect to shipments originating from high risk FTZ, such as those that do not implement the Code of Conduct for Clean Free Trade Zones. 10. Make greater use of existing or new international agreements that include provisions on mutual legal assistance or other forms of enforcement cooperation, in order to combat illicit trade conducted through FTZ. When administering such agreements, Adherents should designate the competent authorities and their points of contacts in order to facilitate the communication between and among the competent authorities of the parties to such agreements.