free port

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free port,

port, or section of a port, exempt from customs regulations (see tarifftariff,
tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic industries
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). Goods may be landed at a free port for storage and handling, and they may even be processed into manufactured goods. Duty is charged only if the goods are moved from the free port into the adjacent territory. Free ports originated in the late Middle Ages, when the burdensome tariffs charged by many petty states threatened the reemerging maritime commerce. The high tariffs later levied in the period of mercantilismmercantilism
, economic system of the major trading nations during the 16th, 17th, and 18th cent., based on the premise that national wealth and power were best served by increasing exports and collecting precious metals in return.
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 necessitated additional free ports. In the 19th cent. the danger of smuggling caused the closing of many free ports. In Europe, Copenhagen, Danzig, and Hamburg were free ports until 1939; in East Asia, Hong Kong and Singapore still are. In the United States, bonded warehouses serve some of the functions of the free port, permitting goods to be stored and processed in specially licensed warehouses if a bond exceeding the amount of the customs duties is first posted. In 1934 the Foreign Trade Zones Act authorized the establishment of free ports in the United States, but with a prohibition on manufacturing. The first American free port was opened in New York City in 1937, and others have since been added. Many international airports have free ports.
The Columbia Electronic Encyclopedia™ Copyright © 2013, Columbia University Press. Licensed from Columbia University Press. All rights reserved.
The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Free Port


a part of a port (including water basins, piers, and adjoining sites with warehouses), separated from the remaining port territory by a customs barrier. Free ports were organized in several countries during the last quarter of the 19th century for delivery and warehousing of goods conveyed by sea from abroad, for the purpose of developing international trade and creating favorable conditions for the reexportation and transit of these goods. Retail sale and consumption of goods on which duties had not been paid were not permitted in the free port; only repacking, sorting, and cleaning of the goods and conclusion of credit agreements and of wholesale trade deals for sale and resale of the foreign goods brought in were allowed. Free ports were used to im-prove the competitive position of a given port with nearby foreign ports. The organization of a free port was preceded by establishment of a so-called porto franco, with the pur-pose of concentrating marine commerce in a certain seaport that would serve as a point of delivery for goods not yet sold and which would later be conveyed to the final destination to the buyers. The lack of customs formalities in the free ports shortened the demurrage of the ships and expedited the turn-over of commercial capital.

One of the first free ports was organized in Genoa in 1876. The free ports of Hamburg (since 1882) and Trieste (since 1891) and also those of Rotterdam, Antwerp, Venice, and Alexandria were well’known. Several free ports were established in the Scandinavian countries in Copenhagen, Malmo, Göteborg, and Stockholm. Free ports were also set up in the USA, where they were called foreign trade zones. The New York free port was opened in 1937. In some free ports of the USA there are warehouses administered by the customs office, where foreign goods brought in may be stored without hindrance against the obligation of subsequent payment of customs duty. Under present conditions of international trade the free ports have lost their significance.


The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.

free port

[′frē ‚pȯrt]
(civil engineering)
An isolated, enclosed, and policed port in or adjacent to a port of entry, without a resident population.
McGraw-Hill Dictionary of Scientific & Technical Terms, 6E, Copyright © 2003 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The Secretary of State has set up an advisory panel to advise on the establishment of free ports. The group of trade and shipping experts is intended to help facilitate the International Trade Secretary's ambition to create "the world's most advanced" free port model.
However, former North East MSP Christain Allard, now a city councillor, questioned if the region has the European import traffic needed to make a free port successful.
A councillor has called for two of the region's biggest quays to join forces to secure free port status.
"However, free ports are not a cure-all to the challenges our area faces.
The idea of free ports as a way to boost Britain's economy post-Brexit was first proposed in The Free Ports Opportunity, a 2016 report for our think tank by Rishi Sunak, one of the Tory party's rising stars (and the new chief secretary to the Treasury).
HOLYHEAD port owner Stena Line says free port status for the town could bring "immediate opportunities" but also had a message for the UK Government.
Ms Truss said free ports would use onshore enterprise and manufacturing as the "gateway to our future prosperity, creating thousands of jobs".
The Prime Minister has not yet fleshed out the details of his free port plan, but Mace's report called for the introduction of a network of seven free ports across the Northern Powerhouse: Grimsby & Immingham, Hull, Rivers Hull & Humber, Teesport & Hartlepool, Tyne, and Liverpool, and Manchester airport which are some of the most deprived areas in the country.
Mr Johnson said: "As Prime Minister, I will do everything I can to boost investment and economic success across the entire United Kingdom, and taking advantage of the opportunities afforded by leaving the EU on October 31 to introduce free ports is an excellent way to boost businesses and trade in regions that Westminster has neglected to pay attention to for far too long."
as well as local governments will have greater say in how things are run in the free ports, without excluding national agencies.
Other areas earmarked for free ports status include: Immingham and Grimsby ports, Hull port, Rivers Hull and Humber, Tees and Hartlepool, Liverpool, and Tyne.
Mr Walker argues that free ports, geographical areas that allow goods to be imported into a country without paying import tariffs, should be brought together with enterprise zones, locally designated areas subject to tax relief to encourage private investment.