Geneva Freeport

The origins of the freeport can be traced back to 1888, but as it expanded in size, it adopted the "opaque traditions of Swiss banking", making it the preferred storage facility for the international elite.[5] Freeports are designed to reduce barriers to trade by decreasing the amount of transactional events at which some customs or tax might be collected. All goods stored in freeports are understood to be “in transit” which means that an owner defers all customs duties and tax liabilities until the goods leave the warehouse.[2]

According to an article in The New Yorker, Swiss businessman Yves Bouvier pioneered the freeport concept parallel to the art market, making his shipping company Natural Le Coultre the largest tenant at the freeport, with storage space rented in excess of 20,000 m² since 2013.[5]

Bouvier, dubbed the "freeport king", is the majority investor in the Singapore and Luxembourg freeports[6] and has been variously described as the owner of the Geneva Freeport, or its largest shareholder,[7] although in an interview in October 2016 he said he owned only 5% of it, with 85% of it being owned by the Swiss state.[8]

Canton of Geneva is the majority shareholder in the Geneva Freeport but leases the facility to a private firm that operates it. A space that would hold a medium-sized painting would cost approximately US$1,000 per month, while it would cost anywhere from US$5,000 to $12,000 for a small room that can hold multiple objects.[2]

After the 2008 financial crisis and recession, there was a large surge in art collecting and demand for freeport space. Art was seen as a safe investment and so wealthy individuals began to acquire greater amounts of artwork that they would sell at a later date.[2]

In 2013, the Freeport held about 1.2 million works of art, allegedly including around 1000 works by Pablo Picasso.[7] As well as art and gold bars, the facility contains about three million bottles of wine.[9]

In 2009, the first gallery inside the Freeport was opened by Simon Studer. Other galleries include those run by Sandra Recio.[9] In 2013, it was reported that a 10,000 m² extension would open in 2014.[10]

On September 13, 1995, Swiss and Italian law enforcement (Carabinieri) raided Giacomo Medici’s large storage room in a warehouse in Geneva Freeport. The storage room was rented to Edition Services, a company owned by Medici. Law enforcement found over 3,800 antiquities, worth an estimated $35 million,[11] many with dirt still attached, along with other documents relating to art dealers and museums in Europe and North America.[12][13] These antiquities had been illegally excavated in Italy and then smuggled over the Swiss border. To circumvent Swiss customs authorities, Medici attached a false provenance to the objects, often attributing them to an anonymous Swiss private collection, claiming that they had been removed from Italy decades earlier. He would then secure legal Swiss export papers for the objects, send them to the United States to be put up for sale, and arrange for the objects to be bought back and returned to Switzerland, effectively creating a tight provenance.[2] This discovery led to the conviction of Medici in May 2005 for "receiving stolen goods, illegal export of goods, and conspiracy to traffic" in May 2005.[14] The discovery of these antiquities led to a major breakthrough in global awareness of looted antiquities and the arrests of other major players in the trade. It also implicated a variety of museums in the purchasing of looted antiquities including the Getty Center in Los Angeles and the Metropolitan Museum of Art in New York City.[12]

Although the discovery of Medici's storeroom prompted tightening of Swiss customs and freeport laws, the holdings of the freeport were still quite opaque and art crimes continued to occur. In 2003, Geneva police discovered 200 ancient Egyptian artifacts in the freeport that had been illegally exported to Switzerland. These objects had been smuggled out of Egypt through a complicated network of smugglers including 15 Egyptians, two Swiss, two Germans, and a Canadian.[15] The smugglers had claimed that they were exporting souvenirs from a tourist bazaar in Cairo when they shipped the antiquities.[16] The items were stored at the Geneva Freeport until they were able to be sold to European and North American museums.

In 2010, Swiss customs officers discovered a Roman sarcophagus in the Geneva freeport, which had been looted from a site in Southern Turkey.[2]

In 2013 nine antiquities looted from Palmyra in Syria and ancient sites in Libya and Yemen were seized by Swiss authorities after being found during a customs inspection at the Geneva Freeport. The objects had been deposited at the Freeport between 2009 and 2010. Six of the objects are believed to have been transported to Switzerland from Qatar and another from the United Arab Emirates.[17] This opened a debate on the role of the freeport in funding the terrorist activities of groups such as ISIS, who is suspected of depositing looted objects of ancient art in the facility via middlemen.[18]

In November 2015 the director of the Louvre, Jean-Luc Martinez, submitted a report on the protection of cultural heritage to UNESCO that denounced the role of the Geneva, Luxembourg and Singapore freeports in the illicit trafficking of stolen cultural goods. However, the European Commission's response to the report, in a meeting chaired by Luxembourg, "took great care not to mention the case of the freeports".[19]

In January 2016, officers from the art crimes squad of the Italian Carabinieri, working in collaboration with Swiss authorities, raided a storage unit that the British antiquities dealer Robin Symes rented at the Geneva Freeport. It was found to contain a huge quantity of stolen antiquities, nearly all of which is believed to have been looted by the Medici gang from Etruscan-era and Roman-era archaeological sites in Italy and other locations over a period of at least forty years. Packed inside 45 crates, investigators discovered some 17,000 Greek, Roman and Etruscan artefacts, including two stunning Etruscan terracotta sarcophagi, topped by painted, life-sized reclining figures, hundreds of whole or fragmentary pieces of rare Greek and Roman pottery, statuary and bas-reliefs, fragments of a fresco from Pompeii, and a marble head of Apollo which is thought to have been looted from the Baths of Claudius, near Rome. The artifacts are estimated to be worth hundreds of millions of pounds, with the head of Apollo alone valued at £30 million (US$44 million). Symes is alleged to have hidden the objects at the Geneva Freeport warehouse soon after his partner's death, in order to conceal them from the executors of his estate and thus keep their huge value out of any settlement.[20][21]

In April 2016, Geneva prosecutors opened a criminal probe into the ownership of Modigliani’s “Seated Man with a Cane” in storage at the freeport. The canvas was seized by the authorities to determine its origins. The painting was allegedly looted by the Nazis from its original owner, Parisian art dealer Oscar Stettiner, who passed away before he could retrieve the painting,[22] and its whereabouts were unknown until it appeared at an auction in 2008 but didn't sell.[23] Its current owner, art collector David Nahmad, stated to have obtained the piece in 1996 and that no evidence linking the painting to Stettiner exists.[22]

Many of the paintings acquired by the primary suspect in Malaysia’s 1MDB corruption scandal, Jho Low, had been stored at the Geneva facility when they were forfeited in 2016.[24][25]

In a 2018 report, the European Commission observed that increases in demand for freeports was positively correlated to stricter banking regulations, where freeports continue to offer the most secrecy, making them a hotspot for crime. The report cited the Bouvier Affair and the Geneva freeport as examples.[26][27]

On 26 March 2019, the European Parliament adopted the final report of the Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance (TAX3), which the committee had adopted on 27 February 2019. The report stressed that freeports provide "a safe and widely disregarded storage space, where trade can be conducted untaxed and ownership be concealed",[28] which has led the EP to call for freeports to be scrapped across the EU in order to fight tax-evasion and money-laundering.[29]

Freeports in Switzerland have historically enjoyed little government regulation. However, after the 1995 discovery of Medici's warehouse and the 2003 discovery of Egyptian artifacts, Switzerland began to impose tighter laws on the freeport and the objects within it. In 2003, the Cultural Property Transfer Act (CPTA) allowed Switzerland to ratify the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export, and Transfer of Ownership of Cultural Property. Following that, in 2005, an ordinance passed that required all cultural property imported into Switzerland to have its origin, ownership, and value declared. Since 2009, Swiss law has required freeport managers to maintain inventories of the warehouse contents and name of individuals who own the property within, while also giving customs officials the power to conduct inspections.[3]

Following the implementation of these laws, the Geneva Freeport continued to be implicated in cases involving looted antiquities and other stolen artworks. In an attempt to further close avenues for trade in illicit cultural property, Switzerland adopted new regulations in 2016. They passed the Swiss Anti-Money Laundering Regulation and the Swiss Customs Act.

The Swiss Anti-Money Laundering Regulation aims to introduce greater transparency into transactions by providing two options. The first is for traders to involve a financial intermediary, meaning a credit card company or bank, in transactions which would remove the anonymity that cash transactions allow. The intermediary would also receive a record of the activity which would enter the payment system and its mechanisms for detecting fraud. The second option allows the buyer and seller to keep their identities and transaction confidential but requires that the seller take steps to ensure the legality of the buyer's funds.[2]

The Swiss Customs Act imposes a six-month time limit on goods stored in the freeport and forced freeport managers to identify owners in the warehouse inventory records. The act encourages a high rate of turnover but is limited in its effectiveness by allowing customs to extend time limits on stored objects[2]

Described as the "greatest art collection that nobody gets to see",[30] prominent figures in the art world have been raising concerns about the fact that countless and priceless pieces of art are stored away from public view and treated as an investment, meaning these cultural objects might as well not exist.[31] For example, Eli Broad, a major contemporary art collector, stated that "treating art as a commodity and just hiding it in storage is something that to me is not really moral."[32]

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