The use of free ports to stash arts

Interesting older item from New York Times on the use of free ports to stash away artworks (and other contraband):

The drab free port zone near the Geneva city center, a compound of blocky gray and vanilla warehouses surrounded by train tracks, roads and a barbed-wire fence, looks like the kind of place where beauty goes to die. But within its walls, crated or sealed cheek by jowl in cramped storage vaults, are more than a million of some of the most exquisite artworks ever made.

[…]

With their controlled climates, confidential record keeping and enormous potential for tax savings, free ports have become the parking lot of choice for high-net-worth buyers looking to round out investment portfolios with art.

[…]

Free ports originated in the 19th century for the temporary storage of goods like grain, tea and industrial goods. In the last few decades, however, a handful of them — including Geneva’s — have increasingly come to operate as storage lockers for the superrich. Located in tax-friendly countries and cities, free ports offer savings and security that collectors and dealers find almost irresistible. (Someone who buys a $50 million painting at auction in New York, for example, is staring at a $4.4 million sales tax bill. Ship it to a free port, and the bill disappears, at least until you decide to bring it back to New York.)

At least four major free ports in Switzerland specialize in storing art and other luxury goods like wine and jewelry, and there are four more — most newly minted — around the world: Singapore (2010); Monaco (2012); Luxembourg (2014); and Newark, Del., (2015).

Concerned by the rapid growth of these private storage spaces and worried that they could become havens for contraband and money laundering, Swiss officials initiated an audit in 2012, the results of which were published two years ago. The results revealed a huge increase in the value of goods stored in some warehouses since 2007, led by an increase in high-value goods like art. Though the audit did not specifically measure the increase in stored artworks, it estimated that there were more than 1.2 million pieces of art in the Geneva Free Port alone, some of which had not left the buildings in decades.

 

This entry was posted in capital accumulation, finance and insurance, free ports/zones, Uncategorized. Bookmark the permalink.

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