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Le Freeport

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Coordinates: 1°20′42″N 103°58′09″E / 1.3450°N 103.9691°E / 1.3450; 103.9691
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1°20′42″N 103°58′09″E / 1.3450°N 103.9691°E / 1.3450; 103.9691

Le Freeport
IndustryFreeport
HeadquartersSingapore
Websitewww.singaporefreeport.com

Le Freeport, formerly known as Singapore Freeport, is a high-security storage and display facility in Singapore.[1] A majority stake is held by Natural Le Coultre S.A. of art dealer and shipper Yves Bouvier.[2] The facility opened in May 2010 in a duty-free zone near Singapore Changi Airport and is modelled after similar institutions in Geneva and Luxembourg.[3][4] The Freeport was on sale, but has since been purchased.[5]

History

The Freeport concept was pioneered by Swiss art dealer Yves Bouvier through his art shipping company Natural Le Coultre, who also founded the Freeports in Geneva and Luxembourg. Following the success of the concept in Europe, Bouvier expanded it to Asia in the early 2000s at a time when Singapore was beginning to implement a series of laws that increased banking secrecy, strengthened trusts and reduced taxes in order to develop into a global hub for private banking.[4][6] At the same time, banking secrecy was rolled back in Switzerland, following greater scrutiny on the country's role as a tax haven.[7]

Bouvier and diamond dealer Alain Vandenborre are both shareholders in the Singapore Freeport.[8][9] The facility is also supported by various Singaporean institutions and authorities, including the city-state's Economic Development Board and Singapore Customs, and is supervised by the Singapore Police as well as the Civil Aviation Authority of Singapore.[3] It is also closely monitored through regular assessments by organizations such as the Monetary Authority of Singapore (MAS), the Ministry of Home Affairs as well as the Ministry of Finance because of the potential risk of money laundering and terrorist financing activities posed by the Freeport.[3]

The facility

The Freeport building was designed by architects and security experts from Switzerland.[4] Owing to its security features, the facility has been described as "part bunker, part gallery"[4] and "Singapore’s Fort Knox for fine art and collectibles."[10] The Freeport's interior features furniture by contemporary designers Ron Arad and Johanna Grawunder.[4] Covering 30,000 square meters, the facility sports climate-controlled storage rooms.[11][12]

Among its most prominent corporate clients was auction house Christie's, which rented more than a third of the Freeport's storage space until it pulled out in 2018,[5] and Deutsche Bank, which used it to store gold bullion worth $8.9 billion but stated it is no longer a customer there.[13][14] The Freeport has been credited as one reason, besides the government's exempting of investment-grade precious metals trading from goods and services tax, that Singapore has been slowly reclaiming its role as a physical gold trading hub.[15] According to Bloomberg, the Freeport has reportedly accumulated losses of S$14.4 million over about ten years until 2018, and any potential buyer would inherit a S$20 million debt to Singapore's largest bank, DBS Group Holdings.[5]

Just like the Geneva and Luxembourg facilities, the Singapore freeport, as the entire freeport concept, has been called into question since the Bouvier Affair, in which Yves Bouvier allegedly misrepresented the cost of artworks and subsequently overcharged clients. A 2018 European Commission report also observed that freeports increased in demand as banks began fighting illegal financial activities, making them potential hotspots for financial crime.[16][17][18]

Alleged role in illicit financial activities

2013 Economist article

An article published by The Economist in 2013 named the Singapore Freeport as one of such facilities possibly used by ultra-rich elites to evade taxes thanks to the facility's confidentiality. This prompted Singapore Customs to demand the Freeport's management to respond to The Economist’s claims.[19] The Freeport denied the truthfulness of the article.[20]

2014 NRA Report

A 2014 National Risk Assessment Report by the Monetary Authority of Singapore (MAS) identified the Freeport as a potential risk for illicit financial activities.[21] Company Chairman Tony Reynard at that time denied this possibility, stating that "all operations at the Singapore Freeport are under the supervision of Singapore Customs, which can access anything at any time."[20] However, Freeport managers have admitted to having no knowledge of what is being stored inside the facility due to the strict policy of discretion with the clients.[22]

2016 Financial Action Task Force (FATF) report

In its 2016 mutual evaluation report on anti-money laundering and counter-terrorist financing measures, the FATF identified the Freeport as "an emerging risk to consider" as it presented "a medium to high" money-laundering and terrorist-financing risk.[23] The report further noted that "The relevant authorities…did not demonstrate a comprehensive understanding of what activities were being undertaken in the Singapore Freeport."[23]

Storage of looted objects

In 2016, a UNESCO report on the protection of cultural heritage sites identified the Freeports in Geneva, Luxembourg and Singapore as a “possible problem for the protection of cultural property and its illicit trafficking” and warned that these facilities could be used "to store works of art from thefts, lootings or illicit excavations for resale in the black market...even many years later."[24]

References

  1. ^ "Asia's 'Fort Knox', Le Freeport in Singapore, said to be up for sale". The Straits Times. July 19, 2019.
  2. ^ "LE FREEPORT". www.singaporefreeport.com. Retrieved 2019-08-02.
  3. ^ a b c "The Singapore Freeport – CNPLaw LLP". 30 September 2014. Retrieved 2019-08-02.
  4. ^ a b c d e Prystay, Cris (2010-05-20). "Singapore Bling". Wall Street Journal. ISSN 0099-9660. Retrieved 2019-08-02.
  5. ^ a b c "Crypto Tycoon Buys Yves Bouvier's Maximum Security Freeport in Singapore". Artnews. 20 September 2022.
  6. ^ Gough, Neil (2017-05-12). "Singapore, a Rising Home for Quiet Money, Comes Under Pressure". The New York Times. ISSN 0362-4331. Retrieved 2019-08-02.
  7. ^ "Singapore is world's fifth-largest tax haven, behind HK: Report". TODAY. 31 January 2018. Retrieved 2019-08-02.
  8. ^ Ditzig, Kathleen; Lynch, Robin M.; Ding, Debbie (2016). "Dynamic global infrastructure: The freeport as value chain". Finance and Society. 2 (2): 180–88. doi:10.2218/finsoc.v2i2.1732. S2CID 133484850.
  9. ^ "La Pinacothèque de Paris ferme sa filiale à Singapour" (in French). 2016-04-14. Retrieved 2019-08-02.
  10. ^ "Singapore's Fort Knox for fine art and collectibles". www.customs.gov.sg. Retrieved 2019-08-02.
  11. ^ Majendie, Adam (18 May 2010). "Wealthy Store Art in Singapore's Tax-Free 'Fort Knox'". Bloomberg.
  12. ^ Selina Lum (2017-04-30). "$1.4b art row puts secretive market in spotlight". The Straits Times. Retrieved 2019-08-02.
  13. ^ Seward, Zachary M. "The high-security, high-concept vault where Deutsche Bank will store $9 billion of gold". Quartz. Retrieved 2019-08-02.
  14. ^ "Asia's 'Fort Knox', Le Freeport in Singapore, said to be up for sale". The Straits Times. 2019-07-19. Retrieved 2019-08-02.
  15. ^ Jacqueline Woo (2017-04-13). "S'pore has key features to become Asia-Pac's global precious metals trading hub". The Straits Times. Retrieved 2019-08-02.
  16. ^ "Business focus: Fears grow over Chancellor's tax-lite free ports push". Evening Standard. 2020-02-19. Retrieved 2020-04-10.
  17. ^ "Money laundering and tax evasion risks in freeports" (PDF). European Parliament. October 2018.
  18. ^ "Affaire Bouvier-Rybolovlev : de l'art et des milliards - EconomieMatin". www.economiematin.fr. Retrieved 2020-04-23.
  19. ^ "Über-warehouses for the ultra-rich". The Economist. 2013-11-23. ISSN 0013-0613. Retrieved 2019-08-02.
  20. ^ a b "S'pore Freeport 'not at risk' of becoming haven for illicit activities". TODAY. 14 January 2014. Retrieved 2019-08-02.
  21. ^ "Singapore's Anti-Money Laundering and Counter Financing of Terrorism Regime Assessed to be Robust; Controls to be Strengthened in Certain Sectors". Monetary Authority of Singapore. 10 January 2014.
  22. ^ Bregman, Alexandra (2019). The Bouvier Affair: A True Story. Amazon. p. 77. ISBN 978-1-7338345-7-5.
  23. ^ a b "Anti-money laundering and counter-terrorist financing measures: Singapore (Mutual Evaluation Report)" (PDF). Financial Action Task Force. September 2016.
  24. ^ "INTERGOVERNMENTAL COMMITTEE FOR PROMOTING THE RETURN OF CULTURAL PROPERTY TO ITS COUNTRIES OF ORIGIN OR ITS RESTITUTION IN CASE OF ILLICIT APPROPRIATION" (PDF). UNESCO. July 2016.

See also

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