(Sm)art Investing: Rich Move Assets from Banks to Warehouses
Part 2: A Vehicle for Money Laundering
It is widely acknowledged that many of these artworks promptly disappear into art warehouses. Dealers are also quietly aware of how the international art trade can be used to launder money.
In April, the FBI searched the Helly Nahmad Gallery on Madison Avenue in New York. US authorities accuse Nahmad, one of the members of a family of collectors, of money laundering and other crimes, which he denies. The New York gallery had a prominent booth at Art Basel this year, as it does every year.
UBS is the main sponsor of Art Basel. It has the largest lounge in the VIP area, where it invites its best customers to special exhibits. Art is big business in Basel. "The target audience falls within the highest segment of the wealthy," says Swiss attorney Karl Schweizer, who has developed the business for UBS. "You can make incredible customer ties with art."
Deutsche Bank, Germany's largest bank. has also entered the business of art warehouses. It already has its own large art collection and is the main sponsor of London's Frieze Art Fair, which also has a sister event in New York. Now the bank is building its own warehouse in London and, like UBS, has leased storage space for 200 metric tons of gold in Singapore.
Getting In on a New Business
The Christie's auction house maintains a presence at the Singapore Freeport, a sleek, futuristic building located at the airport. The Asian city-state has copied Switzerland's successful strategy with the help of a Swiss adviser. It also offers complete discretion and tax exemption.
The Luxembourgers have also amended their tax laws to accommodate their freeport, which is scheduled to open in September 2014. In the VIP area of Art Basel, officials from Luxembourg sought to entice a well-heeled clientele by touting the new facility -- in various languages, including Russian -- as "your tax-free emporium."
Indeed, this tiny country in the heart of the European Union has big plans. At a conference on the future of Luxembourg as a financial hub, Arendt said: "We no longer wish to focus on the Belgian dentist and the German butcher."
Translated from the German by Christopher Sultan
- Part 1: Rich Move Assets from Banks to Warehouses
- Part 2: A Vehicle for Money Laundering
© SPIEGEL ONLINE 2013
All Rights Reserved
Reproduction only allowed with the permission of SPIEGELnet GmbH
Click on the links below for more information about DER SPIEGEL's history, how to subscribe or purchase the latest issue of the German-language edition in print or digital form or how to obtain rights to reprint SPIEGEL articles.
- Frequently Asked Questions: Everything You Need to Know about DER SPIEGEL
- Six Decades of Quality Journalism: The History of DER SPIEGEL
- A New Home in HafenCity: SPIEGEL's New Hamburg HQ
- Reprints: How To License SPIEGEL Articles