Wealth

Secret art warehouses under government scrutiny

For years, government regulators and money-laundering experts have tried to peer behind the wall of secrecy surrounding freeports, the vast tax-free warehouses that house art and other treasures around the world.

Now, the Swiss government is taking action.

The Swiss Parliament in Bern, Switzerland.
Fabrice Coffrini | AFP | Getty Images

The Swiss Federal Council has announced stricter rules for freeports to "better monitor the entry and exit of goods," and better identify the owners of goods stored in the ports. The announcement was first reported by Artnet,

The rules, which take effect in January, are part of a broader government crackdown on money laundering and illegal financial trades.

They include a six-month time limit on goods stored for later export, which would limit the ability of owners to store assets in the warehouses for years to avoid taxes or regulation.

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The rules also require the owners of the goods to declare their identity, as well as the identity of those buying goods leaving the freeports.

"The measures ensure the necessary transparency to domestic and foreign authorities about the stored goods," the council said. "In addition, the disposition of Switzerland to fight against money laundering will be strengthened."

To better fight against money laundering, the government has extended the inventory disclosure requirements to include wine, cigars, cars, motorcycles and furniture.

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Freeports around the world — notably in Geneva, Lichtenstein and Singapore — are known to hold billions of dollars worth of art, jewels and other trophies of the rich. Their promise of secrecy and tax advantages make them popular among the rich, but also a target government regulators.

A 2013 study by the Swiss Finance Audit Office found that freeports may be offering shelter for tax dodgers, as well as storage for cultural goods and war materials. Originally designed to hold commodities and other goods in transit, freeports have become giant black boxes of wealth stored for years by unknown owners.

Freeports have also come under scrutiny in wake of the scandal surrounding Yves Bouvier, a freeport magnate who was arrested in Monaco earlier this year over accusations of fraud. Bouvier has denied the charges, and the case is moving forward in the Monaco courts.