Geneva Free Port is one of the oldest free ports still running today, also one of the largest warehouses. A free port is a kind of Free Economic Zone (FEZ), an area of trade with very little or no taxes at all. There are hundreds of them in the world.
A free port is not a modern creation; instead, its concept dates back to antiquity. At the time, cities, states, and nations authorized the passage of merchandise through their harbors duty-free or with attractive conditions to boost their economic activity. Transit goods’ could enjoy lower duties compared to imports for the domestic market. A famous example of those early free ports is the Greek island of Delos, in the Cyclades archipelago. The Romans turned it into a free port around 166 BCE, and it became a trading hub in the Mediterranean region. As the commercial routes changed, other cities replaced Delos as trading centers.
During the Middle Ages, free ports evolved. Several European harbor cities such as Marseille, Hamburg, Genoa, Venice, or Livorno established themselves as leading trading centers. During the 19th century, free ports became global and were established in strategic trading places such as Hong Kong, Singapore, and Colón, Panama. At the same time, in 1888-89, the free port of Geneva was created. At first, a warehouse storing the city’s grain provisions, Geneva Free Port became the world’s largest and most secretive art warehouse.
Geneva Free Port: From Grain Silo To Valuable Goods Warehouse
Geneva is not a port city; it only houses a small harbor on its homonymous lake’s shores. Still, at the crossroads of several European routes, Geneva has hosted many international trade fairs since the 13th century. It contributed to establishing the city as one of the leading European trading places. It also led to the development of its famous banking sector. Today, Geneva hosts many international organizations, including several United Nations agencies. The city also counts among the most important financial centers in the world.
Geneva has been a free zone since 1813, two years before joining the Swiss Confederation. In the 1850s, Geneva’s authorities decided to create a warehouse for the city’s grain provisions. As space needs grew with the years, new warehouses were built. Between 1888 and 1889, the Ports Francs et Entrepôts de Genève (Geneva Free Ports & Warehouses) was born. The local authorities chose to establish a private company, with the State of Geneva as the majority shareholder.
Initially built to store necessities for the population, such as food, wood, and coal, it evolved along with the city. In the early 20th century, cars and wine barrels joined the inventory and a railway connection to the national network simplified the flow of goods. Mechanization of storage processes also speeded up the free port’s operations.
Geneva Free Port also played a role during World War II as the Red Cross used the warehouses to stock and send goods to victims and war prisoners. After the end of WWII, economic activities resumed, and Geneva Free Port carried on its expansion. In 1948, the first “valuable” goods entered the warehouse: gold bullions. Other precious merchandise piled up next to gold. Increasing numbers of fancy cars joined the stored items in the port. In 1952, the inventory counted 10,000 Vespas inside the free port’s walls.
The World’s Largest Art Warehouse: A “Museum” With No Visitors
Over the years, the free port hosted more and more luxury goods such as diamonds, pearls, vintage cars, antiquities, bottles of great wine. With a volume large enough to store 3 million wine bottles, Geneva Free Port is considered as “the world’s largest wine cellar.” Today, a large number of rough diamonds transit through Geneva Free Port. It also became the largest art warehouse in the world and the most secretive too.
Today, Geneva Free Port consists of different warehouses scattered across the Canton of Geneva. The Headquarters and main buildings are in La Praille, an industrial area south of the Canton, only a few kilometers away from the French borders. The entire Geneva Free Port extends over 150,000 square meters, half of it being a duty-free zone.
The ever-increasing number of artworks and antiquities in storage made the Free Port upgrading its security. The Headquarters building, a large windowless concrete block surrounded by barbed-wire fences, stands above extensive basements. It is the tip of the iceberg designed to resist earthquakes and fires.
Inside, several rooms follow specific criteria to fit the highest conservation conditions. Artworks and antiquities are stored in hygrometry and temperature-controlled rooms conceived as impenetrable safes. They are locked behind nameless, armored doors built to hold out against explosives and equipped with biometric readers granting access to the lucky few—a James Bond-style place!
Geneva Free Port supposedly hosts the world’s largest art collection, with an estimated value of US$ 100 billion. Journalist and art critic Marie Maertens estimated the number of artworks stored in the free port to be around 1.2 million. Great museums’ collections are nothing compared to that: the Museum of Modern Art in New York City has about 200,000 artworks.
Masterpieces are secretly kept behind its walls. The New York Times has reported that a thousand Picasso artworks are stored in the free port and works from Da Vinci, Klimt, Renoir, Warhol, Van Gogh, and many others. That would make Geneva Free Port the world’s largest “museum,” unfortunately, a museum that no one can visit.
An Essential Place For The Art Trade
The free port is a place of choice for businesses. As a transit zone, owners do not pay taxes as long as their goods stay on site. Like any other free port, the laws ruling Geneva free port are permissive. Nobody knows who sells what to whom, and at what price: the ideal place for the discrete art market sales, but also for fraudulent transactions.
Billionaires and art dealers can enjoy a secret place with a special status for trading. It seems to also attract individuals, hidden behind shell corporations, wanting to escape taxes on their transactions. Interestingly, a painting can be bought and sold multiple times without ever leaving the free port! Many of these transactions escaped the customs administration’s control. At least, this was the case until not so long ago.
Looted Antiquities Discovered In The Free Port
In 1995, a first scandal tarnished Geneva Free Port’s reputation. Documents proving the existence of an international network of looted artifacts were discovered when a former Italian policeman crashed his car on the road between Napoli and Rome. Italian police gained access to Geneva Free Port for investigation. They found that Italian art dealer Giacomo Medici was hiding thousands of stolen Roman and Etruscan antiquities inside his vault at the free port. Many of which were sold to famous museums. In 2004, Medici was sentenced to several years of jail time and a €10 million fine. It was only the beginning of several scandals linked to Geneva Free Port.
Some years later, another of the free port’s vaults interested the authorities. In 2003, Zurich Airport customs discovered an Egyptian artifact, the carved head of a pharaoh, sent from Qatar to Geneva. With the search warrant for one of Geneva Free Port’s vaults, Swiss authorities investigated further and made an incredible discovery. Locked away behind door 5.23.1 was a total of 290 Egyptian antiquities, including several mummies, carefully stored. Following this important discovery of an Egyptian and international trafficking network of looted antiquities, an Egyptian delegation traveled to Switzerland to evaluate the vault’s content. The stolen artifacts were finally returned to Egypt.
Towards Better Traceability
Since 2003, efforts have been made to avoid fraud and money laundering. Switzerland established stricter laws regarding the transfer of cultural goods. These allowed them to ratify the 1970 UNESCO convention against the illicit trafficking of cultural property. The national ordinance of 2005 requires knowing the ownership, value, and origin of all cultural goods entering the country. It became effective in Geneva Free Port in 2009, when comprehensive inventories became mandatory and the multiplication of customs’ controls.
Even though there still were irregularities in inventories, the new law unveiled several fraud cases related to stolen art pieces. Along with looted antiquities, the free port may also house artworks coming from the plunder of Jewish property during the Holocaust.
One of them, a Modigliani painting, made the headlines. Parisian Jewish art dealer Oscar Stettiner was the owner of the 1918 Seated Man with a Cane painting. Stettiner presented the Modigliani painting at the Venice Biennale in 1930. Soon after the beginning of WWII, Oscar had to flee Paris, leaving his possessions behind, including the Modigliani painting. In 1944, the Nazis sold the painting at auction to American art dealer John Van der Klip. After the end of the war, Stettiner filed a claim to retrieve the painting. The artwork then disappeared for several decades before resurfacing at an auction sale in 1996. Panamanian company International Art Center (IAC) bought it for US$ 3,2 million and stored it in Geneva Free Port. Stettiner’s heir, Philippe Maestracci, filed a claim against Monegasque billionaire and art dealer David Nahmad and his son Helly, the suspected owners of IAC. Even if they claimed otherwise, the 2016 Panama Papers leak revealed that David Nahmad was indeed the head of shell company IAC. Justice has still not decided who is the rightful owner of the US$ 25 million Modigliani masterpiece.
New regulation about money laundering was adopted in 2016. The free port is aiming for more transparency. They are now tracing the tenants of every rented box, also the sub- and sub-sub-tenants, checking Interpol databases for fraudsters. In 2018, Switzerland joined the Automatic Exchange Of Information (AEOI), exchanging banking data with other countries. A proof of the change towards better traceability is the departure of several questionable clients using shell corporations, which are now banned, to other less-regarding free ports. Geneva Free Port offers its clients the discretion suited for art market transactions and the assurance of a politically and legally stable country, following international regulations, which is not the case with every free port.
An Art Hub
Since the 2008 economic crisis, investors have taken refuge in gold or art, increasing the number of transactions in the art market. Following the art market’s boom, free ports became real art hubs, attracting experts, framers, art restorers, and many other art-related professionals.
Geneva Free Port became the leader of artworks storage. Art-related companies represent 40% of its total volume. The largest one, Natural Le Coultre, the shipping company owned by Yves Bouvier, inhabits 20,000 square meters of the free port. Along with the storage units, the company runs framing and art restoration workshops. All services occurring in the duty-free zone of the free port are also free of taxes.
Other art-related companies rent rooms in the free port: museums, art galleries, merchants, collectors, and labs for the scientific study of art pieces. Indeed, except for large museums and institutions with their stocks, research labs, and restoration studios, smaller museums, galleries, and privates need places like free ports: where their collections are stored safely, in the right conditions, where they can be analyzed, framed, restored, and prepared for transportation.
Geneva Free Port: From Transit Zone to Long-Term Art Warehouse
At first, used as duty-free transit zones, free ports have today taken on a role which they were not designed for: long-term art warehouses. They became essential places for the storage of artworks and antiquities.
Geneva Free Port stocks supply many exhibitions and art fairs worldwide, including Art Basel, the famous international art fair. Free ports became central in the storage of art pieces, especially the larger ones, as collectors, galleries, and museums needed more places to keep their collections.
One of the major downsides is that some of the greatest artworks are stored in free port vaults indefinitely, away from the public. Art pieces are treated as nothing more than investments, never seen by anyone else but their owners. A part of the worlds’ cultural heritage is neatly tucked away, hidden inside the most secretive art warehouses. Jean-Luc Martinez, the Louvre director, defined free ports as the greatest museums no one can see.