FREE TRADE ZONES

1. Concept

Free Trade Zones and Bonded Warehouses are separate areas within the customs controlled precinct into which goods of any kind may be imported in any quantity regardless of source, provenance or destination, as long as due regard is given to the restrictions and prohibitions established for the preservation of public order, health and safety, etc.

These goods may be stored for unlimited period until de owner decides on their ultimate destination (payment of customs duty, re-export, abandonment,etc.) during wich time they will not be subject to import duties or excise.

2. Regules governing the operation of Free Trade Zones and     Bonded Warehouses.

       a) Communitarian Dispositions:

• Communitarian Customs code, approved by: Regulation (the EEC) nº 2913/92 of the Council,October 12th of 1992, (TWELVE L-302 of 10-19-92), articles 166 to 181 (in ahead C.C.C.)

• Dispositions of Application of the Customs Code, approved by: the Regulation (the EEC) nº 2454/93 of the Commission, July 2nd of 1993 (TWELVE L-253 of 11-10-93), in their new writing given by the regulation (EC) nº 993/2001 of the Commission,May 4rd of 2001 (TWELVE L-141 of 28-05-01), articles 799 to 814 (in ahead D.A.C).

       b) National Dispositions:

• Order of December 2nd 1992 (BOE of 17-12), by that to norms on Bonded Warehouses and Free Trade Zones are dictated.

• Law 37/1992, dof the VAT, of December 28th (BOE of the 29), as well as its corresponding Regulation, approved by Real Decree 1624/1992, of December 29th (BOE December 31st ).

• Law 38/1992 of the Special Taxes, of December 28th 1.992 (BOE of the 29), and its corresponding Regulation approved by Real Decree 1165/95, of July 7th (BOE July 28th).

• Circular 1/1994, of March 22nd (BOE March 30th ), of the Department of Customs and Special Taxes, of the A.E.A.T., on usable customs documentation with the object of the VAT in conducted operations under protection of customs or fiscal regimes and in the free areas.

       c) As auxiliary norm:

• One stays the Law of 1.929 Bases of and the Regulation of 1.930, as well as General Decrees of the Rent of Customs, in everything what specifically it is not regulated by the Communitarian Law.

3. Benefits

In addition to the range of services offered in a Free Trade Zone, such as warehousing, hadling, mantenance, loading, unloading, consolidation, desconsolidation and grading, there is also the advantage that, except in certain cases, goods of any description may be directly imported under a very liberal customs regime.

This freedom from or simplification of customs procedures for incoming and outgoing goods, as well as for the operations carried out within the zone, is due to the fact that the zones are located within customs controlled areas and therefore subject to permanent vigilance by the relevant authorities.

In summary, the benefits that can obtain the merchandise in a Free Trade Zone are the following ones:

• To the import merchandise tariff rights will not be applied, taxes inner (VAT and II.EE.), nor measured of commercial policy.

• The communitarian agricultural merchandise can obtain the advance collection of the restitutions to the export.

• The national merchandise obtain certain benefits in some intracommunitarian operations (according to are subject to II.EE. and VAT or just VAT).