PART 1 GENERAL ANALYSIS 1. ORIGIN OF FREE PORTS OR FOREIGN TRADE ZONES WHAT IS A FREE PORT OR FOREIGN TRADE ZONE? The term “free port” which is quite generally used abroad suggests complete freedom from all port restrictions and regulations, and hence s not accurately descriptive of the institution which operates under that name. In this country the term ‘foreign trade zone” seems to be preferred, but this term also is not truly descriptive of the free port and its uses. From the standpoint of the ship and of the physical handling of cargo, the term “free port” is more expressive and comprehensive. As a free port is essentially a maritime institu- tion, usually equipped with docks, wharves, transit sheds, ware- houses, and often with bunkering and ship repair facilities, the latter term is perhaps preferable to ‘foreign trade zone,” which is a term unfamiliar to shipping men throughout the world. It is in fact a new name for an institution which the maritime world has already named ‘free port,” probably because it is a port or a part of a port and is free to shipping in certain respects. Regardless of name, the freedom from official formalities and from certain port dues or charges which characterizes free ports or foreign trade zones, is limited to matters directly related to the entry and clearance of ships and cargo. It does not usually extend to formali- ties other than those prescribed by the customs regulations. Vessels entering free ports or zones, remain subject to the laws respecting the public health and quarantine and must be subject to regulations respecting the landing of passengers within the limits of the zone. Vessels entering harbors having free zones are not immune from the laws respecting pilotage. Other charges against vessels, often effective in the free port, are towage, moorage, dockage, demurrage, harbor dues, and port wardens’ fees. Vessels must still be subject to rules respecting the use and protection of navigable channels and to the regulations respecting inflammable and other dangerous cargoes. Absolute freedom in the discharge of cargo is probably not accorded at any free port. The customs laws not only prescribe procedure in respect to articles which may be admitted into the country but they also prescribe prohibitions against the admission of certain kinds of goods. Some countries have laws prohibiting the landing of goods, the manufacture or sale of which is subject to taxation or to govern- ment control. Charges may apply against goods in free zones for wharfage, handling, storage, and other services.