A Valued Vault: Unlocking the Advantages of Freeports and Bonded Warehouses
- Company News
Freeports and bonded warehouses are crucial to our global art world and are becoming increasingly popular each year. In 1977, when ICEFAT was founded, there were less than a hundred. Now, in 2024, there are thousands across the globe. With more of our clients than ever utilizing these high-security spaces to store works “under bond”, i.e. without payment of import duty, our role as custodians of cultural heritage has come to ensure they are used effectively and efficiently. Both freeports and bonded warehouses can be “highly effective tools” and in this blog, we will look at why.
Geneva Freeport, credit MHM55, CC BY-SA 4.0
Safeguarding Subtlety
When a collector wishes to keep their purchases away from prying eyes or an institution is making a high-profile acquisition, freeports offer the subtlety required. In Switzerland’s Geneva Freeport alone, it is estimated that approximately $100 billion worth of art is kept in storage, enabling clients to access their collections without the need to clear customs. All seven of our Swiss agents regularly operate at this most discrete network of facilities, where goods remain in transit until required for display or sale. Isabelle Harsch, CEO of Harsch (Switzerland), confirms that the Geneva Freeport holds an “important role for the art market in Switzerland and contributes to the development of the transit of artworks in the country.” Luxembourg High Security Hub provides this advantage too for goods arriving from outside the EU. Many United States-based agents utilise storage in one of the five US states that do not have sales tax, such as Delaware, meaning goods can be shipped there for storage without the need for tax to be paid.
Easing Access and Spurring Speed
Our clients value flexibility and promptness in the management of their collections, so, beyond purpose-built storage facilities like the Singapore or Geneva Freeports, many agents maintain their own bonded warehouses which offer similar advantages. Many freeports are constructed in areas to increase economic activity, in locations away from traditional art market centers, so they may not be the most convenient for collectors. Therefore, ICEFAT-agent owned bonded facilities have the advantage of being more conveniently located for clients’ needs, located in cities such as London and Paris.
All of Gander & White’s UK facilities are fully bonded. Its French operation in Paris also maintains a bonded space, as do many other French ICEFAT agents. In France, rather than the whole warehouse being bonded, the ‘sous douane’ section must be clearly delineated and marked out. The total area under bond can be increased or decreased at any time but customs must be notified and inspections may take place. In most territories, the whole facility is bonded.
ICEFAT agent-owned bonded warehouses can be found among Swiss agents. Isabelle Harsch comments on Harsch’s space in Carouge, Switzerland that clients “can come to see their artworks anytime and the customs clearance can be done at our facilities by our in-house customs brokers, which speeds up the process.”
Gander & White (UK) and Harsch (Switzerland)
Moving Museums Globally
The global museum world is made more vibrant by its ability to loan objects not just with other institutions in the same country but around the world too. Our agents facilitate this process, and bonded facilities aid the smooth movement of museum objects on loan. In South Korea, ICEFAT member Dongbu Art maintains a fully climate-controlled, secure bonded warehouse within which museums store loaned items before technically importing them, ahead of temporary exhibition. A collateral is paid on ‘temporary entry’ only when the object leaves Dongbu’s bonded space to be displayed, which is then released once the object has physically left the country.
Dongbu (South Korea)
Assessing Suitability
Our agents enable clients to make informed decisions about storing their art under bond or not. Melbourne-based International Art Services (IAS) offers state-of-the-art storage facilities and could easily make it under bond if required by future market demand in Australia. If a client in the country is considering storing under bond, however, then Rhys Mitchell of IAS advises that at present “third party bonded warehouses can be found at all major international airports and ports; but are not suitable for art. There are no climate controls, and they lack the high-level security of a fine-art facility”. The majority of freeports globally are constructed to encourage manufacture – which is the case with all 12 of the freeports located in the UK – and thus are not designed for storing art. It is our role as custodians to advise clients on the most appropriate course of action to access the advantages of a freeport or bonded warehouse.
Helutrans (Singapore)
Freeports and bonded warehouses are an important, but lesser known, part of the art world, offering a discreet and efficient way to store art without needing to formally import it anywhere. Ida Ng, our Chairperson and CEO of Singapore-based Helutrans says “there has been exponential growth in freeport usage over the past couple of decades, but there is more work to be done to ensure clients can use these spaces effectively, including at Singapore Freeport, where Helutrans operates regularly. ICEFAT members are leading the way with facilitating this service for the art world, in both freeport usage and bonded warehouses.” Working with our clients globally, we’re proud to support the usage of these indispensable assets for the art world.
