(We Chinese in America Media Editor Tang Zhao, March 19, 2022) Yachts moored in various ports by the rich Russians will be seized, but artworks temporarily stored in free ports are expected to escape. (Photo from Bloomberg)

At a time when countries around the world are trying to seize and freeze the assets of Russian oligarchs, the "free port" (free port) duty-free storage that these rich people often use to store valuables and works of art has not been searched in various countries, at least so far.

The warehouses, which are often located near railroads or airports, are not considered to be imported into the host country, subject to inspections or customs duties, Bloomberg reported. In the era when air travel became popular, some people needed to temporarily store items when transiting, and free ports came into being. As the art market has boomed over the past decade, catering to wealthy collectors seeking tax breaks when shipping art across borders, the number of free ports has exploded.

The country where the free port is located has its own regulations on these special areas, but there are still loopholes to be drilled.

For example, in Switzerland and the United States, items stored in free ports do not need to disclose the beneficial owner, that is, the ultimate physical owner of the item. This ultimate owner can be a holding company or other legal entity. In this way, a sanctioned individual remains the actual owner as long as he hides behind a shell company. While many shipping companies and Freeports require a driver’s license or passport from those authorized to move the artwork, those who come forward may be U.S. representatives of foreign companies controlled by sanctioned individuals.

Several experts have pointed out that Russian billionaires who already have art in the free port are likely to remain there after being placed on the sanctions list, rather than trying to transport it elsewhere or sell it. First, the haulage company and Freeport staff will not take the risk, and secondly, no one usually rushes to buy art from the sanctioned unless it is sold at a super low price.

However, the wealthy Russians who have not yet been included in the sanctions list but feel they are likely to be the next target, the free port should now be very attractive to them, if the art they own can be placed in a tax-free warehouse in an unrelated country, has a higher chance of being safe without damage.

(Source: Compiled from Online Information)

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