Transcription
And so, ladies and gentlemen, we moved to the Leonardo da Vinci, the Salvatore Mundi, the masterpiece by Leonardo of Christ the Savior, previously in the collections of Three Kings of England. The world has become a very much dangerous place, and that's where I think the art market fits in, because the art market is seen as another safe haven. 352 million, it's a bid. 352 million dollars is the bid, and the piece is sold.
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Towards understanding the role of customs warehouses for art and valuable objects starts in New York, at the world's most important art market. Around 25 billion dollars worth of art is traded annually. Austrian-born Fritz Dietl experienced how the boom on Wall Street spilled over into art and expensive collectibles. "We here in New York were the years and um," is an art forwarder. His company transports priceless paintings to auctions and galleries in custom-made crates. He has even transported the Salvatore Mundi. He says in recent years, he's been delivering ever more artworks, not to museums, but to extremely secure warehouses known as freeports.
Is the world's most precious painting, the Salvatore Mundi, created in Da Vinci's workshop around the year 1500? Since its sale at Christie's in New York in 2017, it has disappeared from the public eye. Other works of art vanish too. For his exhibitions, Austrian curator Alfred Weidinger frequently asks for paintings on loan, but often he can't get them because they've been stored in freeports. This is the weekly Foreigner believes has profound consequences.
Foreign. Swiss lawyer and art market expert Monica Rot sees other motives for collectors to put their paintings in storage. Escape to next the INE shop inside um.
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Geneva ranks among Europe's most important financial centers, and it is home to a facility where high-priced collectors' items, art, and taxes intersect, or indeed don't. The so-called Freeport of Geneva is a customs warehouse. The Salvatore Mundi, the most expensive painting in the world to date, is also said to have been kept here for years. What are they like, these places that shelter such treasures inside their walls? House Festival. The Geneva Freeport is located on Swiss soil and is majority owned by the Canton. While goods are stored here, the country does not levy any sales tax or customs duties. Items from all over the world can be brought here directly from the airport. What is the purpose of this place? Why does Switzerland offer warehouses for expensive objects under a suspended tax regime? Jaime Pagani was a member of the Geneva city government until 2020. For a long time, he tells us, primarily Swiss banks had attracted foreign assets. But things changed in 2017, he thinks, when the country started to pass on information to tax authorities of other countries. Is his suspicion arose after he became a member of the Geneva city government in 2007 and later became city president. Is. Could customs warehouses like the Geneva Freeport serve as havens for secret assets, as Pagani believes? We ask for permission to film, but I deferred till later. But perhaps the design of the buildings could offer clues to their purpose. The Geneva-based architects 3BM 3 first designed an annex to the local Freeport before planning a number of freeports abroad.
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S is in 2010, Benedict Montong and Carmelo Stendardo oversaw the completion of their first Freeport for art and precious goods. Is.
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The barrier exterior. The architects show us both sides of their Freeport: the imposing foyer and the heavily secured storage rooms. Here, security, fortifications, and cool aesthetics merge into a new type of building: a secure vault to house highly precious objects, financed by an art forwarder from Geneva. Regulations at Luxembourg Airport, right next to the runway, lie the second Freeport the architects built for Eve Bouvier.
For an interview with Eve Bouvier and a filming permit remains unanswered, but we come across archival footage from the grand opening in the autumn of 2014. The orchestra plays an anthem composed especially for the occasion. The opening of a warehouse staged as a society event.
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Also does the honors as a developer. He harbors big plans for freeports. Objectives.
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The entrepreneur has created something new: high-security warehouses, but with an exquisite design, addressing a wealthy clientele. But Bouvier also pursues other ambitions. He also doubles as a successful art dealer himself, with excellent connections. In 2013, he sold the Salvatore Mundi for some 127 million dollars, the very work that would later sell as the world's most expensive artwork at Christie's. Bouvier doesn't want dull logistics warehouses. He envisions his freeports as a network of glamorous treasure vaults. The media report: Uber warehouses for the ultra-rich. The Economist calls them. BBC speculates Geneva may hold the most important art collection that no one can see. But with the Freeport's success, questions arise. Politics starts taking notice. Following the Panama Papers, the EU Parliament creates a committee to investigate covert flows of capital. Freeports are also put on the agenda. Evelyn Regner, delegate of the Austrian Social Democrats in the European Parliament, joins the investigations. Their questions earn the delegates an invitation to the Luxembourg Freeport in February 2018.
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Yankees uh. The liberal politician Wolf Clint lives in Berlin too, was on the investigative committee. Is.
Believes the weakening of banking secrecy is an incentive for countries to allow customs warehouses on their territory.
Since 2017, this so-called automatic information exchange has been in place. It makes hiding money in bank accounts more difficult. Investments in art and valuable collectibles on the other hand are increasing, and these things need to be stored. This is. And Kevin Horton. But not all storage for valuables enjoys suspended customs. Art forwarding firm Constrance in Vienna offers 35,000 square meters of high-security storage for most items. Here, sales tax has been levied as usual. Company director Birgit Vikas is seeing strong demand and is planning additional warehouses. Is.
In most EU countries, private companies can obtain a license to operate a customs warehouse. In Austria too. Fast um.
However, Vikas believes her clients would not be able to avoid taxes in the long run with these valuables. It is taking a sculpture worth a million euros from abroad to Austria would typically cost a collector 130,000 euros in value-added tax. By storing it in a customs warehouse, these duties can be suspended until it leaves storage. But do all objects eventually leave? What is the combined value of all those objects stored under a suspended tax regime? Birgit Vikas does not want to comment on this. In Germany too, new art storage facilities have sprung up in recent years. Liberal politician Wolf Clint resigned from the EU Parliament in 2019. The topic of customs warehouses still preoccupies him. He is taking interest in a facility in Thuringia, some 350 kilometers from Berlin. Yeah, we're fine. In this.
Had a currency depository built at the end of the 1990s. Today, it houses art under the name Central Depot. Owner Nicholas Perrin has agreed to show Wolf Clint and us around. As an architect, he was involved in its construction.
Explosions. When the state withdrew, it sold the building along with its fancy furnishings.
Just about 400 of the 4,000 square meters of space enjoy a suspended customs regime. We cannot film. Instead, Perrin shows us an unoccupied storage room.
Um.
And his partner paid just 3.5 million euros for the building. On this game.
Yeah.
Artists.
One point raises questions.
His name. Yeah. Customs warehouses were once strictly transit zones. Today, valuables can reside here permanently. Perrin understands how that raises questions. Harbor.
Germany too, private operators can obtain a license for a customs warehouse. Perrin says his clients rely on suspended customs mostly when having artworks restored in Germany, or if Clint considers that plausible. But could there be anything else fueling the demand for suspended custom storage? From his office in Manhattan, a short distance from the major auction houses, art forwarder Fritz Dietl has long observed the increasing importance of freeports. Awesome language.
Value-added tax is generally not imposed. This creates an attractive environment for investing in art. Many an investor in on this. But Dietl stresses, as soon as the objects leave the warehouse, all taxes are due. What then makes customs warehouses appealing? We get a message from Geneva Freeport has a new executive director, and Claire Bish grants us an interview.
For security reasons, we are not allowed to film any storage rooms or hallways.
Instead, Bish introduces us to various service providers within the Freeport, including art conservator Andrea Hoffman. For services within the duty-free zone, sales tax is not due until the property leaves the Freeport. Is.
Um.
The director emphasizes the Freeport's role primarily to preserve and protect important works of art. To her, the often-voiced accusation freeports could facilitate tax avoidance schemes stems from a misconception. Is.
Foreign. Same in movies. Directions. So will all taxes ultimately be due after all? The Channel Island of Jersey is often called a tax haven. Tens of thousands of offshore companies are said to be registered here. John Christensen is a native of the island and once served as economic advisor to the government. Changed sides and founded the Tax Justice Network, which aims to shut down tax havens. The financial secrecy index is basically a way of ranking the way in which countries enable their clients, ultra-high net wealth individuals and high net wealth individuals, to hide wealth offshore. Clearly, freeports are being used as an important part of offshore wealth management. Clearly, a lot of wealth is being shifted to freeports, and clearly it belongs in any index which tries to to understand the ways in which countries like Luxembourg or Singapore or Switzerland are deliberately and knowingly creating this offshore space where very wealthy people can hide their wealth. For Christensen, it's obvious how the freeports are being used. For sure, on paper, all taxes would ultimately be due. But to attract the money of the super-rich, many states would deliberately leave loopholes. Christensen shows us how he believes the system works. So, look here. We have a very wealthy person, actually lives in Europe, but wants to buy a work of art here. It is. This is a world painting which is being bought at auction in New York after 50 million euros. In practice, the work of art won't actually go to Paris. It's going to be put into a Freeport facility in Luxembourg. So it's going to fly straight from New York into Luxembourg Airport. So there it is. But actually, this person doesn't want to disclose at all that it belongs to them. So she's going to put it through a company which is registered in the British Virgin Islands. And there it is. It sits between the work of art itself and the ultimate beneficial owner. And as a further safeguard, the company shares don't actually belong to this person. They belong to this trust, and this trust has been established with trustees, lawyers in Jersey, and there's no information at all about who owns that trust. So what's happened here is you set up a vehicle for avoiding tax. There's no wealth taxes imposed on this. There's no capital gains tax imposed on this. There's no value-added tax, no import tariffs, no inheritance taxes whatsoever. In other words, this is a totally tax-free structure. And even better, the work of art will double in value, and there'll be no tax at all imposed upon it at any stage. Christensen raises serious accusations against freeports and the countries that host them. He says he is familiar with constructs involving shell companies from his time on the island. But are they really used in connection with freeports? We get in touch with an insider who used to work for one of the companies held by Freeport founder Eve Bouvier. Eventually, he agrees to an interview.
Um.
Shortly after the opening of his Singapore Freeport, Bouvier invited staff from other business units there. I'm wrong.
Crazy one kind of the safe boxing month for your coil and North Carolina. The Freeport is located directly at Singapore Airport. Gold and diamonds could be brought here directly from the tarmac, even anonymously.
Let's end this understands. Polish custom films Sunrise Limited in British Virgin Islands. Is.
Could the freeports be harboring assets without knowing their true owners because they're held through shell companies?
Um. Are there any cases at all in which such constructs have become public? John Christensen monitors secret financial dealings around the world. While we are filming, he discovers a new lead from the USA. Shady financial transactions continue to come to light as a result of the Panama Papers. A report that's just come out from the U.S. Senate, the subcommittee on investigations, and they're talking about Russian oligarchs using the art market to hold wealth and launder money, and they're referring in particular to one family, Arkady Rotenberg, who apparently was holding valuable artworks in Germany. The U.S. report does not address tax evasion, but rather the circumvention of political sanctions. But the mechanics are allegedly the same. The documents give minute details of how cronies of Russia's President Putin used offshore companies to covertly trade high-value paintings to move funds. A customs warehouse in Germany was serving as a hub. Boris and Arkady Rotenberg had moved millions in this way, all this while they were sanctioned not to conduct business in the West. In the wake of Russia's annexation of Crimea, in Germany, Christoph Trout Fetter collaborates with John Christensen. He also knows how rarely it's possible to uncover such deals.
Foreign. Life and I'm concrete and file as is. I'm problem as is. Where the artworks of the sanctioned Russian oligarchs were stored in Freschen near Cologne, in the warehouses of Hazenkamp, Germany's largest art forwarding company with multiple sites across Europe. Not until the investigations from the USA did this come to light. What else is stored here? Owner and managing director Hans Evad Schneider agrees to an interview. And this is.
In 2019, the agent of the Russian oligarchs' shell companies ordered the paintings to be transported to Moscow. Hazenkamp even had known who really owned the paintings, would he have been obliged to know?
In total, the paintings were worth over 18 million dollars. Their present whereabouts remain unknown. No further investigations into the case have been carried out in Germany. Swiss financial legal expert Monica Rot believes states need to take a closer look. It is a.
What is the legal situation in Germany? Do authorities identify the owners of assets stored in customs warehouses? Fabio de Masi co-chairs the left-wing party at the German Parliament. He has submitted a question to the Ministry of Finance because he fears a tax loophole. Then uh, the response from the Ministry of Finance confirms his concerns. Losses.
The ministry concedes in Germany, it is perfectly legal to store valuables in the name of shell companies for an indefinite period of time. In 2020 alone, art and valuables worth more than 900 million euros were newly put into suspended custom storage in Germany. How much of this is tax avoidance? By international standards, the sum seems small. Today, even a single work by an important artist can gross hundreds of millions. How many such works are stored in Geneva? Jaime Pagani follows his suspicion that freeports are used systematically to avoid taxes. He believes Freeport entrepreneur Eve Bouvier himself might have acted in this way during deals with a Russian billionaire.
In 2003, Bouvier started his transactions with Dimitri Ribolovlev. He sold him paintings for a total of almost 2 billion dollars. Is the fiscalmo. So are there, as Pagani believes, regular art sales taking place inside the Freeport, of which the world, and particularly tax authorities, know nothing? The existence of dedicated sales rooms within the facility is readily confirmed by director Bish. Op. Yeah. Solution.
This is. We find another lead on transactions within the freeports. Among the 38 paintings that Eve Bouvier is said to have sold to Dimitri Ribolovlev, one work stands out. Alongside the famous Salvatore Mundi, Water Serpents II by Gustav Klimt. The sale price in 2013: over 183 million dollars, 50 million more than even the Salvatore itself. Back then, museum manager Alfred Weidinger is a leading expert on the works of the Austrian painter. Um. It's perfect. This is. He is familiar with the sales of paintings in customs warehouses because.
Worth many millions change hands. Buyers want to be absolutely certain each time an appraiser is called in to confirm the authenticity.
Is.
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Initially, Weidinger was surprised. It just changed hands, but they never seem to leave the customs warehouse. Difference. Normally, no information about such sales becomes public. But in this case, the business partners became locked in a high-profile legal battle over the prices paid. According to reports, Bouvier now lives in Singapore. He did not respond to an interview request. Remy Pagani is primarily concerned with whether Bouvier and his Geneva-based company Natural Locultra filed taxes on their profits. Universe. According to Swiss media, the Geneva tax authorities are now investigating a tax debt of 330 million Swiss Francs. Because of tax confidentiality, authorities will not disclose any details, says Pagani, but he still wants to know more about the case. Savannah Nicola. We um. Performance.
Okay.
In Austria, a friend of MEP Evelyn Regner has filed formal questions about customs warehouses. The government was to answer whether offshore structures with customs warehouses are legally possible in Austria. Uh, this is.
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Regarding the requested value of the items in Austrian customs warehouses, the ministry remains silent. Freeports, discreet customs warehouses for treasures like art and gold, classic cars or wine. A system for tax avoidance and confidential deals. Critics say legal loopholes could be used to conceal true ownership, and many states have been hesitant to regulate. We've seen a shift towards a world in which politicians think it's their job to attract investment by making huge concessions, regulatory concessions, and tax concessions. We'll let you bring your stuff here, your money, your wealth. We'll manage your wealth here, and we'll keep it secret. Why do politicians have such a hard time closing such loopholes? Yeah, the induction is.
Had not been answered by the time our filming was completed. John Christensen fears that Brexit will further strengthen the move towards customs warehouses. The European Union's been talking about getting rid of freeports for a very long time. It still has major Freeport facilities, and now the British government's talking about massively expanding Freeport facilities. This expansion will make it much easier for very high net worth individuals, for oligarchs and plutocrats, to hide their money offshore and to continue to avoid and evade paying taxes. And the boom continues. In 2020, a new art warehouse opened at Le Bourget Airport in Paris by Shan'an, an art logistics company that has taken over the business of Freeport entrepreneur Eve Bouvier in Geneva. As to whether this was a customs warehouse and whether anonymous storage via offshore companies is possible here, the company did not answer.
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