Russian War In Ukraine Renews Pressure On Swiss Free Ports

(MENAFN- Swissinfo) The free port in Geneva is majority-owned by cantonal authorities. Keystone / Martial Trezzini

The Russian war in Ukraine is putting free ports around the world under the microscope. A major question is whether these storage warehouses for valuable goods are being used by sanctioned individuals to hide assets. Swiss authorities don't have a clear answer. 

This content was published on June 17, 2022 - 09:00 June 17, 2022 - 09:00 Olivia Chang

• Pусский (ru) Война России против Украины: что хранят швейцарские фрипорты?

Since the outbreak of the war in Ukraine, Switzerland has faced increasing scrutiny over its handling of Russian assets. So far, the Swiss government has frozen CHF6.3 billion ($6.33 billion) worth of Russian assets and confiscated 11 properties. This came after Switzerland broke away from its history of political neutrality and adopted sanctions against Russian individuals and entities in line with the European Union. But free ports – including their exact contents and ownership – still remain largely behind closed doors and mostly inaccessible to Swiss authorities chasing assets on the sanctions' list. 

Free ports are large warehouses where merchandise can be stored without being subject to import tax and duties. Secrecy and confidentiality are inherent to how they operate. Switzerland houses seven of them and another 174 open customs warehouses. Both serve similar functions but a key difference is that customs authorities are stationed on-site at free ports.

The current war has only pushed free ports – and their culture of secrecy – back into the forefront, with criticism from experts arguing that regulations are letting some Russian assets fall through the cracks. There is no official data on Russian assets sitting in Swiss free ports. The Geneva Freeport did not reply to a request for comment at the time of writing.“It is difficult for us to assess the current situation in the free ports,” the Swiss Federal Audit Office (SFAO) said.

“I do think the war puts pressure on free port transparency because of the sanctions that have been used to try to pressure Russia's elite,” says John Zarobell, author of Art and the Global Economy and chair of international studies at the University of San Francisco.“Free ports are one of many devices these folks use to hide their wealth and therefore lack of transparency means pursuing sanctions is limited.”

More

More

MENAFN19062022000210011054ID1104396366