FREE ZONE AND FREE PORT. - This is the term for those privileged centers which enjoy customs exemption for all goods coming from abroad that flow into them and which, after a more or less brief stay, depart again for other foreign countries and may also be subject to a certain selection or sorting or even to a more or less simple and rapid processing.
In ancient times entire cities where fairs were held were considered free for the entire duration of the market, so that during that period the obligations to pay duties to the municipality or to the feudal lord were abolished and the monopoly of the guilds was suspended. Later, in the maritime centers of the Levant, free quarters were established for the citizens and goods coming from the Italian maritime cities; after the discovery of new lands and as a result of the voyages of explorers, these quarters contributed greatly to the multiplication of exchanges and to the general increase of wealth. But if the free points primarily fulfilled this positive function of stimulating international trade, they nonetheless created serious disparities of treatment among the citizens of the same State, by exempting from paying duties those who resided within the privileged enclosure. Classic examples remain Gibraltar, Hong Kong, Aden, Singapore. It was therefore thought to limit the characteristic privileges of the free points and free ports to the port area alone: thus the entrepôt was born, within well-defined limits and where no one resides permanently. If, then, the origins of the free ports are, at least in their conception, quite ancient, in their present form they arose during the 17th and 18th centuries. In the modern economic structure the free ports have, in reality, the purpose of mitigating the excesses of industrial and agricultural protectionism and also that of facilitating or even promoting the industrial development of regions which governments have particular reason to favor.
The free port permits the creation of many industrial, commercial, banking, insurance activities, etc. Within its boundaries large warehouses can be organized, as well as establishments intended for special processing, according to the relations, the needs and the interests of the clientele of foreign countries. A certainly fruitful characteristic of the free port is that within it it is possible to carry out the so-called improvement trade, which consists in re-exporting goods after the selections and modifications introduced, without being subject to customs formalities, controls and interference; thus the free port is commercially in the same condition as the foreign country. The goods that arrive there are not ascertained nor verified by customs at the moment of their entry nor even during their stay in the port; they can therefore be manipulated in such a way as to alter their character, nature and quality for the same customs purposes and without customs being able to intervene in any way.
The State collects customs duties when the goods leave the enclosure of the free port to enter its own territory; while no customs duty is paid for re-exported goods.
The history of free ports in Italy has been varied. In 1854 the Subalpine Parliament ordered the cessation of the free zone and of every customs privilege in the city and county of Nice. The Customs Regulation of Sept. 11, 1862, in art. 93 provided that as of Jan. 1, 1866, Ancona, Livorno and Messina should cease to be free cities. The results obtained by Hamburg and Trieste, however, induced the Italian government to grant free-zone privileges to certain ports, and a decree of 1927 authorized the creation of free ports at Savona, Genoa, Livorno, Naples, Brindisi, Bari, Ancona, Venice, Trieste, Fiume, Palermo, Messina, Catania, Cagliari. Until 1927 and for several decades there had been only free points, that is, simple enclosures in which it was permitted to accumulate goods, considered exempt until they crossed the customs line, but in which the manipulation of goods was not permitted except in a very simple manner. They arose along the quays of the ports or in the railway stations and differed little from general warehouses. In the latter, goods are checked at the moment of their introduction and payment of the duty is merely deferred and is owed in relation to the goods introduced into the warehouse and to their quantity and quality, provided that it is not a matter of re-exported goods.
In their present form the free ports and free points attract foreign goods and, by subjecting them to possible manipulation in order to be re-exported or introduced into the territory of the State, they fulfill a function of indisputable utility and benefit the expansion of international economic exchanges.
Bibliography3 works
Raffaele De Leva