Freeports boom highlights risks of shady activities

Thu Sep 22, 2016 12:34pm EDT
 
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By Silke Koltrowitz and Paul Arnold

GENEVA (Reuters) - Freeports springing up around the world as more investors store and trade physical assets are coming under increased scrutiny as potential black holes for dodging taxes, laundering money or financing extremists as bank secrecy erodes.

Looted Turkish and Italian antiquities seized at the biggest Swiss freeport in Geneva raise the possibility that many artefacts illegally excavated from Libya, Syria or Iraq could lurk in these secretive storage sites, or be stowed there in the future.

Quite apart from the loss of such treasures from the public eye, there is the fear they could be used to help fund shady practices and the activities of militant groups.

Aware of this, some freeports - zones usually near ports or airports where goods can be stored and traded without facing customs duties or sales tax - are taking a proactive stance to help head off tighter regulation of a business that has become a backbone of the global art world.

"We know that lootings helped finance terrorism in the past ... To avoid this happening again with Islamic State or others, we decided to systematically check incoming antiquities, starting Sept. 19," David Hiler, chairman of the Geneva Freeport, told Reuters in an interview.

The company that manages two sites in an industrial area and at the airport is pressing ahead at its own expense to avoid further damage to its reputation that could hurt business.

Founded in 1888 and majority-owned by the local government, the Geneva Freeport rents out space to 230 tenants, mainly logistics firms, but also lets many small customers store goods.

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The Geneva Ports Francs (Free Ports) building is pictured in Geneva, Switzerland September 6, 2016. REUTERS/Denis Balibouse