Free trade zones (FTZ) and trans-shipment operations are trade facilitation mechanisms designed to enhance the efficiency of trade and attract investment. Permitted operations within FTZ, including trans-shipment, which can involve repackaging, relabelling, reloading, assembling and manufacturing goods, combined with more relaxed procedures and limited oversight, can also open doors for fraudulent activities. This is particularly concerning for trade in environmentally sensitive commodities such as wildlife and timber products, hazardous chemicals and waste, including e-waste or plastic waste, which are governed by legally binding provisions of different multilateral environmental agreements (MEAs), and related national laws.

This note aims to provide interested stakeholders with information on FTZ and trans-shipment in the context of MEAs affiliated with the Green Customs Initiative (GCI). The GCI is a partnership of international entities focused on strengthening the capacities of customs and border enforcement agencies to promote compliance with trade-related MEAs and related national laws. The document highlights potential risks related to the monitoring and enforcement of trade-related laws and regulations in FTZ and of trans-shipment operations and outlines existing mechanisms to strengthen them to enhance compliance with MEAs.