The Free Zone (Customs Site No. 2 Thames) Designation Order 2025
The Free Zone (Customs Site No. 2 Thames) Designation Order 2025 designates a specific area at the Thames Freeport as a free zone for a 10-year period.
Cosco Shipping Crystal Logistics (UK) Company Limited was appointed as the responsible authority, subject to conditions encompassing record-keeping, security, access for HMRC officers, and health and safety.
The order leverages existing legislation to establish the free zone and aims to benefit trade and economic growth within the designated area.
Arguments For
Facilitating Trade and Economic Growth: Establishing free zones can stimulate economic activity by reducing customs barriers and encouraging investment in specific areas. The intended benefit is enhanced trade and job creation within the designated area. Evidence of this would depend on post-implementation data collection and analysis.
Streamlining Customs Procedures: Free zones offer simplified customs processes, which can lead to reduced costs and administrative burden for businesses operating within them. This reduces bureaucracy and improves efficiency. The implementation method involved clearly defining the zone's boundaries and appointing a responsible authority.
Legal and Historical Precedent: The order is based on the powers granted under Section 100A of the Customs and Excise Management Act 1979, drawing upon existing legal frameworks for establishing free zones. This provides a legal basis and demonstrates continuity with prior practice.
Targeted Economic Development: Designating a specific location as a free zone allows for targeted economic development by incentivizing investment and streamlining processes for specific sectors or industries. This benefits the local economy and leverages existing infrastructure.
Arguments Against
Potential for Regulatory Gaps: The simplified regulations within a free zone might cause challenges regarding regulatory oversight, tax collection and compliance. Implementation challenges include enforcement of conditions imposed on the responsible authority and potential loopholes in avoiding customs duties.
Unequal Distribution of Benefits: The benefits of a free zone may not be evenly distributed throughout the region, potentially leading to disparities in development between the designated area and surrounding regions. This raises concerns about unintended effects like attracting inward investment at the cost of other areas.
Financial Risks and Compliance Burden: The establishment and maintenance of a free zone can cause unexpected financial liabilities for the responsible authority or government. Implementation challenges include maintaining adequate systems for accounting, record keeping and ensuring compliance with regulations.
Environmental Concerns: Increased economic activity, without thorough environmental impact assessments, might potentially lead to further environmental degradation in the designated area. Alternative approaches would emphasize environmental protection and sustainability within the free zone parameters.
- Citation and interpretation (1) This Order may be cited as the Free Zone (Customs Site No. 2 Thames) Designation Order 2025. (2) In this Order— (a) a reference to an area “shown edged and hatched in red” on a map is a reference to the hatched area extending up to the red edging, but not including the red edging itself; (b) “customs obligation” has the same meaning as given in regulation 2(1) of the Customs (Import Duty) (EU Exit) Regulations 2018; (c) “HMRC” means His Majesty’s Revenue and Customs; (d) “HMRC officer” means an officer of Revenue and Customs; (e) “the Special Procedures Regulations” means the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018; (f) “unauthorised activity” means an activity specified in regulation 3(2)(b)(v) or 3(2)(c) of the Special Procedures Regulations that is not carried out in accordance with an authorisation or approval under those Regulations.
Section 1 defines this Order's title and key terms.
It clarifies that references to red-edged hatched areas on a map only include the hatched area, not the boundary.
It also defines 'customs obligation', 'HMRC', 'HMRC officer', 'Special Procedures Regulations', and 'unauthorised activity' using existing regulations as references to ensure clarity and consistency.
- Period of effect of Order This Order has effect for a period of 10 years beginning with the day after the date on which it is made.
Section 2 specifies the order's effective duration: 10 years from the day after its implementation.
- Designation of area as free zone The area shown edged and hatched in red on the map entitled “Thames Freeport Customs Site 2” dated 13th March 2025 is designated as a free zone.
Section 3 formally designates the area depicted on a specified map as a free zone.
- Appointment of responsible authority The responsible authority for the free zone is Cosco Shipping Crystal Logistics (UK) Company Limited, incorporated on 6th December 1991 with the company number 02669075, whose registered office is Vicarage Drive, Barking, Essex, IG11 7NA.
Section 4 names and identifies the responsible authority for the free zone: Cosco Shipping Crystal Logistics (UK) Company Limited.
- Conditions imposed on responsible authority The responsible authority must— (a) keep separate accounts in respect of its role as responsible authority for the free zone; (b) maintain a system for the keeping, preserving or updating of records required to be kept, preserved or updated by the responsible authority in accordance with regulation 44 (record keeping) of the Special Procedures Regulations; (c) make any records for which the responsible authority is responsible, relating to the free zone and the activities carried on in it, available for inspection, access (including electronic) and copying for removal by an HMRC officer, at an office in the free zone or other agreed place; (d) provide to any person authorised by the Treasury such information in connection with the free zone and the operation of it (which may include copies of the records referred to in paragraphs (b) and (c)) as that person may reasonably require; (e) ensure that the area referred to in article 3 is enclosed and that entry and exit is permitted only at the points marked as access points on the map; (f) provide, free of expense to the Crown, such accommodation and facilities including furniture, fittings and equipment as the Commissioners may reasonably require, which must be properly maintained, heated, lighted, ventilated and kept clean by the responsible authority; (g) provide, free of expense to the Crown, such area of land within the free zone as the Commissioners may reasonably require for the examination of goods and vehicles; (h) provide and maintain, free of expense to the Crown, any appliances and other facilities which the Commissioners may reasonably require to enable an account to be taken of any goods or make any examination or search; (i) comply with any requirement imposed by an HMRC officer under regulation 18E(9) (control of other activities in free zones by responsible authorities) of the Special Procedures Regulations; (j) take reasonable steps to ensure that no unauthorised activity is carried out in the free zone; (k) take reasonable steps to ensure that any goods specified in a notice made under regulation 18C(2) (free zone businesses - conditions) of the Special Procedures Regulations are not brought into the free zone; (l) take reasonable steps to ensure that no goods leave the free zone otherwise than in circumstances where their removal would be in accordance with provision made by or under the Taxation (Cross-border) Trade Act 2018; (m) take reasonable steps to ensure that persons carrying out any activities in the free zone comply with any customs obligations related to the free zone; (n) notify HMRC as soon as reasonably practicable— (i) of any breach of a customs obligation by any person in relation to any goods that are or have been in the free zone, or have been declared for a free zone procedure under the Special Procedures Regulations, that it becomes aware of; (ii) if it fails to comply with any condition or restriction to which its appointment as responsible authority is subject; (iii) if there is a change in circumstances that is relevant to its appointment as a responsible authority; (o) notify HMRC of any planned construction in the free zone.
Section 5 details the responsibilities of the responsible authority.
These include maintaining separate accounts, keeping records, providing access to records for HMRC officers, providing facilities for HMRC at no cost, ensuring security of the zone, preventing unauthorized activity, compliance with customs regulations, and promptly reporting any breaches or significant changes.
- Conditions relating to health and safety Without prejudice to the responsibilities of persons occupying premises within the free zone, the responsible authority must take reasonable steps to ensure that the accommodation, facilities and working conditions within the free zone are safe and without risk to the health and safety of any persons in the free zone.
Section 6 outlines the responsible authority's duty to ensure health and safety within the free zone.