Succession & Billionaire Art Investments

For the uninitiated, a freeport is a form of free economic zone (or foreign trade zone, as it’s known in the US), an area—usually in or around a port of entry—in which goods can be stored without being subject to that country’s customs duties. Since these items are considered to be just transiting through, they haven’t technically entered that country and so can’t be taxed. The concept is hardly new, but in the last decade or so, freeports have become increasingly popular methods of storage for UHNWI’s art acquisitions (see: seasons 4 and 5 of Billions), among other high-priced investments (expensive wine, Lamborghinis, gold bars). The Louvre’s president Jean-Luc Martinez has described them as the greatest museums no one can see.

Why pay an exorbitant import tax on that Richter you bought in Basel when you can store (or hide) it in a maximum security, state-of-the-art freeport until it’s time to divest? And when that time comes, all trading and selling can take place within the freeport, too, ensuring complete discretion, anonymity, and, again, freedom from taxes.

Plus, these facilities are indeed impenetrable. “Our clients choose us because we have no priority above their property,” says the guide giving a tour of the fictional freeport in Tenet. The oldest and largest freeport in the world, established in 1888, is in Geneva. According to this 2016 New York Times article, the facility is home to 1.2 million works of art—the Louvre, by comparison, has 380,000. In 2018, New York City got its very own freeport. Located in Harlem, ACRIS is loaded with high-tech security features, from cutting edge fire, flood, and theft protection to air that is changed 3-6 times an hour.

In a plot line from the latest season of Billions, Bobby Axelrod hides fake versions of his art in a free port to dodge taxes, while the real things hang in his apartment.

In 2015, freeports became the center of one of the biggest art scandals to date, involving Swiss art dealer Yves Bouvier and his client, the Russian oligarch Dmitry Rybolovlev. As T&C reported at the time, the trouble began when Rybolovlev found out that the true selling price of a Modigliani masterpiece he had purchased for $118 million through his intermediary (Bouvier) was actually $93 million—in other words, Bouvier had helped himself to a $25 million commission. Rybolovlev accused the dealer of stiffing him out of more than $1 billion throughout the course of their relationship and Bouvier was eventually indicted on fraud and money laundering charges.

Le Freeport Singapore, one of Yves Bouvier’s free ports.

Before he became one of the world’s most notorious art dealers, Bouvier was an art transporter and storer, credited with introducing the freeport concept to the art world; his shipping company was the largest tenant at the Geneva Freeport, and he was in the midst of building his own freeport empire.

By their design, there is inevitably a dark side to freeports (tax evasion, money laundering, the trade of stolen or looted objects), as there is bound to be for any kind of loosely regulated, tax-free haven (see: offshore companies). Tenet nods to this—it should come as no surprise that the aforementioned Russian megalomaniac uses a freeport for way more than storing his Goyas. But we shouldn’t have to tell you about the myriad things rich people will do to avoid taxes or hide valuable assets, legally acquired or not.

The protagonist of Tenet, played by John David Washington, might have put it best during an encounter with the wife (Elizabeth Debicki) of the film’s billionaire bad guy: “People who have amassed fortunes like your husband’s generally aren’t okay with being cheated out of any of it.”

Leena Kim is Town & Country’s Editor, covering the travel, jewelry, style, arts and culture, education, and weddings beats. She has no priors—she has been at the magazine for 11 years, having started her career at T&C as the assistant to the editor in chief.