The Free Zones System

The Free Zones Concept is a private-sector driven programme introduced as a gateway project which seeks to make Ghana a Gateway to West Africa through trade facilitation and investment.
Free Zones means a part of Customs territory of a contracting party where goods introduced are generally regarded, insofar as import duties and taxes are concerned, as being outside the Customs territory. Free Zone are thereby, consid-ered a “foreign land or territory” for all transactions with Customs.
OBJECTIVES
? Attracting Foreign Direct Investments
? Creating employment opportunities
? Increasing foreign exchange earnings
? Provision of business opportunities for foreign and local investors to undertake joint-ventures.
? Promotion of transfer of technology and diversification of exports.
? Enhancement of technical and managerial skills of Ghanaians
TYPES
Industrial Free Zones: importation of raw materials for manufacture for re-exportation.
Commercial Free Zones: importation of goods for subsequent sorting, mixed, re-bagged, re-labeling, or further processing into finished products. Service Rendering Free Zones.

Free Zones Enterprises may be sited at designated “enclaves” or scattered as single-factory enterprises at various locations.
Priority sectors
In Ghana priority sectors include Information and Communication Technology, textile/apparel, Floriculture, manufacturing, Seafood processing, Jewellery production, Pharmaceuticals, Metal fabrication, Light industry/assembling plant. beauty products, etc.

CUSTOMS CONTROLS
The operations of Free Zones are regulated by the National laws of the host country.
In Ghana, the regulatory authority of the Free Zones is the Ghana Free Zones Board operating under the Free Zones Act, 1995, Free Zones Amendment Act 618, 2002 and Free Zones Regulations (LI 1618) of 1996.
The interest of Customs in Free Zone activities is occasioned by the entry of duty-free consignments and the poten-tial abuse of the regime and resultant revenue loss.
Customs controls include the ff:
? Ensure goods are delivered into licensed facilities.
? Ensure exemptions granted are to the benefit of only licensed facilities, developers of their authorized agents.

Ensure that Customs documents bear the license number of the Free Zone Enterprise in its transactions with Customs.
? Monitor movement of persons, vehicles and goods in and out of the facility from the national customs territory as by regulation prescribed.
? Ensure removal of goods from the facility is covered by GFZB and customs declarations and where appropriate revenue interests are secured.
? Check records of movement of goods received into and delivered from the facility.
? Examination of goods in the facility prior to export and to inspect or take extracts from available records.
? Allow temporary export to the national (host) Customs territory of goods and semi-processed products for further processing and return within a period not exceeding three(3) months.
? Ensure that the totality of annual output of products from the facility sold or offered as gifts does not exceed thirty percent (30%).
? Ensure that products stored in the facility and subsequently found to be missing without reasonable explanation are subjected to appropriate taxes and penalty.

IMPORTS INTO FREE ZONE
GFZB Form 9 is attached to customs documents with the appropriate regime (90)
External examination is conducted by Customs to ensure seal is intact and container number is correct.
Goods are removed under GCE-Tract device.
Goods are received by resident officer at the facility.
Exports from Free Zone
Customs regime 19 and applicable procedure code(19X00) are employed.

Removal bond required for movement of consignment to the Port or exit point.
Goods are packed and loaded under the supervision of the Resident Officer.
Containers are sealed and are not permitted to be opened at the point of exit.
Monthly and quarterly returns are presented to the Customs Headquar-ters (Export) on all transaction in the facility.
DOMESTIC SALES
Sale of finished products and valuable waste to the local market should be approved by the Ministry of Trade.

Sales to the local market shall not exceed 30% of annual output.
Sales to the local market are considered as imports and therefore, dutiable. Valuable waste is considered as part of the quota(30%).
Overview
While recognizing the free zone concept facilitates trade and investment, it is pertinent to periodically review operations to ensure that the objectives for which they were established are met and challenges that confront the operations are adequately addressed.

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