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Priceless Masterpieces and Diamonds Locked away in Freeports Scandal

Billions are being easily laundered through unregulated international tax free zones

Priceless Masterpieces and Diamonds
Locked Away in
Freeports Scandal

Billions of pounds are being easily laundered through unregulated international tax free zones.

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Diamonds, art, gold, luxury cars and wine are among the high-value assets hidden in freeports from tax authorities and law enforcement.

Freeports used to be grubby industrial warehouses, tax-free zones for storing goods in transit such as widgets or sacks of grain. The idea was that trade was sped up by granting freedoms from tax or customs duties, which would only be paid at the final destination.

But they have now been transformed into smart, armoured treasure-boxes used to store – and sometimes hide – high value assets from prying eyes.

“There is nothing illegal in storing something in a freeport,”  FBI special agent Meredith Savona told Byline Times. “But they do lend themselves to ill-gotten gains and ill-gotten artwork being stored there.

“Something can sit there for years until the statute of limitations has run out. They are extremely opaque and there can be multiple transactions within. So, you can basically launder the provenance.”

The best known freeport is sited near Geneva airport and is reputed to hold billions of dollars’ of art. The storage complex also houses art galleries and viewing rooms, meaning that dealers and their clients can see and trade in Picassos or Warhols without the art even leaving the strong rooms. No questions asked.

Multiples cases of looted antiquities discovered in the vaults in Geneva eventually led to the Swiss authorities tightening up controls.

The transformation of freeports has been triggered by a rise in prices and investment in tangible assets in the wake of the financial crisis of 2008, as well as increasingly sophisticated methods of “tax optimisation”.

“It’s all legal,” one London dealer said. “Working out the best way of avoiding or reducing tax has become a serious consideration for art buyers, and they avoid tax by sending their purchases directly to freeports.”

Today, the storage of such assets in freeports is a billion-dollar business, with operators investing heavily in new, state-of-the-art facilities such as Arcis, which opened in New York this year and boasts the highest security and museum-quality climate and humidity controls.

However much the operators insist that everything is well-regulated and controlled, a freeport is a little like a hotel. Nobody knows what goes on behind closed doors.

While operators insist that all is above board, there is little doubt that money-laundering, storage of looted or stolen art, and tax evasion is all going on behind those 50cm doors.

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