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.

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.

A. D. KEILIN

free port

[′frē ‚pȯrt]
(civil engineering)
An isolated, enclosed, and policed port in or adjacent to a port of entry, without a resident population.
References in periodicals archive ?
And the TVCA agreed to spend PS60,000 on research to understand the merits of the free port idea in April.
A free port is a zone within a country that is treated, for customs purposes, as an independent jurisdiction.
On Wednesday, the Committee will take evidence on the Government's proposals to create up to ten free ports throughout the UK after Brexit.
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last week Simon Brebner, chief executive of Peterhead Port Authority, said the free port project could work for the Buchan harbour, but wants more details about it.
Mr Houchen has backed the free port concept for the South Tees Development Corporation site (STDC) for almost two years as the key to the area's post-Brexit future.
ONE OF the most exciting shifts in policy under the new government has been its whole-hearted embrace of free ports. But many people are still puzzled by what they are.
"Many of the benefits of a free port status, however, can only truly be understood once the future relationship between the EU and the UK is clear and, crucially, the UK's trading relationships with the EU and other countries is established.
Free ports are areas inside the UK geographically, but legally outside of the UK customs territory.
ENPNewswire-July 30, 2019--New Prime Minister backs Mace free port plan
During the Broadcast and Media Conference for the 30th SEA Games at Hotel Sofitel in Pasay City last Tuesday, Philippine Southeast Asian Games Organizing Committee (Phisgoc) Chief Operating Officer Ramon Suzara said they want to promote this free port to be a top sports tourism destination.
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