Freeports are recognized as potential conduits for smuggling, but a tax lawyer noted instances when the rich and powerful use economic zones to store art and other high-value assets, providing secrecy and tax benefits. Goods in freeports are classified as “in transit,” exempting them from customs duties, sales taxes and value-added taxes.

Owners can store art indefinitely without incurring taxes, even as its value appreciates. For instance, a collector can buy a Picasso at auction and store it in a Geneva freeport, avoiding taxes that would apply if the artwork were imported into their home country.

The source said that since freeports operate outside national jurisdictions and ownership information is not automatically shared with tax authorities, it is difficult to trace ultimate beneficial owners, enabling both tax evasion and money laundering.

Shell companies or offshore trusts are often used to further obscure ownership. Artworks can also be sold within freeports without leaving the facility, allowing anonymous transactions that bypass scrutiny.

Such a situation is ideal for money launderers, who can “sell” an artwork to a co-conspirator or shell company, converting illicit funds into legitimate proceeds. The Geneva Freeport, estimated to hold $100 billion in art, has been implicated in money laundering scandals, for instance.

In 2015, Russian billionaire Dmitry Rybolovlev accused art dealer Yves Bouvier of defrauding him through inflated prices.

The case revealed a network of freeport-based transactions that obscured true ownership and value. Although Bouvier was cleared, the case highlighted how freeports facilitate opaque, high-value deals.