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Colon Free Trade Zone

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Badl t.
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documents in English
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case study
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2 pages
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  1. Introduction
  2. The idea of a free trading
  3. The Colon free port
  4. Conclusion

In recent years, numerous governments about the globe have sought to provide financial incentives to investors. These incentives are tailored to attract investment and the growth of trade and thus benefit the local people. One of the methods they are currently applied to attract investment is the establishment of free trade zones. These areas enjoy duty free transactions both on their imports and on exports (Reyes, 2011). The idea is so popular that there are free trading zones opening up in most of the major economies. An example is the up to date case where a free trading zone was opened by the world's second largest economy, China, in Shanghai.

This paper will follow the Colon free trading zone, the second largest in the world, and its conflicts with Venezuela. The idea of a free trading zone close to the Panama Canal has been there since as early as the 1910's. However, the Colon free trade zone was established after the end of the Second World War. It is positioned secure to the entry of the Panama Canal and it is dedicated to importing and exporting goods to countries located in Latin America and the Caribbean. It has a total area of about 600 acres (Colon Free Trade Zone, 2014) (Reyes, 2011). This area is supplementary subdivided into two parts. Warehouses used to store transit goods are located in the harbor area, while the area in the city of colon is largely the industrial part, though it is separated from the city by a wall (Reyes, 2011).

[...] This would reduce the destination of the goods that are marked for re- exportations, since some of the countries identified as potential markets are actively seeking to establish free trading zones in their territories (most prominently Brazil). References Colon Free Trade Zone. (2014). Colon Free Zone, Panama Trade, Panama Free Zone. Retrieved February from Money valet vulnerabilities of Free Trade Zones. (2011). FATF Report to 47. [...]


[...] All free trading zones are associated with money laundering (Money Laundering vulnerabilities of Free Trade Zones, 2010). This is because the huge business interests that they attract are sometimes too much for the authorities to regulate. For example, due to the large volume of business between the colon free trading zone and Venezuela leads to movement of large amount of cash between the two places. The result is that bankers of the organizations sometimes use this connection to hide illegal money transactions (Money Laundering vulnerabilities of Free Trade Zones, 2010). [...]

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