Tutoring high school, I’ve never been asked this. The tutor looks into a question he’s long wondered about.

The phrase “free port” means pretty much what I expected:  a port where goods can be exchanged, duty-free, then reshipped.  As long as the goods stay within the confines of the port, neither their presence – nor transaction of them – leads to taxation.  That’s how I understand the premise, anyway.

Since a government is not receiving taxes, it may not be anxious to inspect the goods arriving in the free port.  Inspecting goods is potentially expensive, after all; with no taxes owing, why bother?

Because of tax-free trade, as well as the privacy a free port might offer, storing goods within the confines of a free port can be attractive.  The goods might reside there indefinitely, supposedly awaiting pick-up.  Who even owns them might be the sole knowledge of the owner.

The elegance of the free port construct – where private business contracts might virtually be the only rules – has always appealed to warehousers and owners alike.  It’s a phenomenon whose popularity is rising in some locales.

Sources:

businessdictionary.com

www. economist.com

Jack of Oracle Tutoring by Jack and Diane, Cambpell River, BC.