Free zone
Enclosed area within the EU customs territory where non-Union goods are treated as outside the customs territory for duty purposes.
A free zone is an enclosed geographical area situated within the EU customs territory, but within which non-Union goods benefit from a special customs and fiscal regime. Goods there are treated, for the application of import duties, as if they were not on the customs territory.
Free zones allow unlimited duration storage of non-Union goods without payment of duties or VAT. Usual forms of handling (sorting, packaging, marking) as well as processing operations under the inward processing regime may be carried out there.
Since the UCC, the distinction between "type I" (physical enclosure) and "type II" (customs control) free zones has been simplified. All free zones are now type I, with physical enclosure and entry/exit points controlled by customs. Entry and exit of goods are recorded by the operator.
The best-known free zones in Europe include those of Barcelona, Trieste, Shannon (Ireland), and historic free ports like Hamburg. They are a strategic tool for logistics, international trading, and industrial processing activities.