UK Free Ports Plan Risks Influx of Dirty Money, Say Experts

As featured in KYC360

Free Port


“This suspension of fiscal responsibilities can lead to an oversight of customs’ security function,” said Alexandria Reid, a research analyst at the Royal United Services Institute working on a global project on illicit trade in free trade zones. “In some countries, customs have historically perceived free zones as ‘transit’ issues—effectively ignoring illicit trade or money laundering issues so long as there is no serious leakage of illicit goods or funds into the national economy.” Because free ports do not require disclosures of beneficial owners, anyone can bring in goods on behalf of anyone else, Reid said. The lack of transparency ultimately permits unsourced goods to be bought and sold with cash. Moreover, because free ports rely on self-declarations of the value of any particular export, there is no insight into whether goods have been assigned a false value as part of a trade-based money laundering scheme, according to Reid.