It’s hard to feel bad when a guy worth $10 billion gets ripped off, but the story of Russian billionaire Dmitry Rybolovlev being taking for a ride by his “trusted” art dealer, Yves Bouvier, is certainly fascinating. There are two aspects of the story I find particularly interesting. First, the increased use of “freeports” around the world by the super rich in order to buy, sell and hold assets tax free. This is merely another example of how billionaires often avoid taxes entirely, while the nine-oligarch wealthy, the middle class and the poor are nickel and dimed for virtually everything. Liberty Blitzkrieg covered freeports back in 2013 in the article, Introducing “Freeports” the Latest Way for Oligarchs to Store Their Assets. Here’s an excerpt:
Passengers at Findel airport in Luxembourg may have noticed a cluster of cranes a few hundred yards from the runway. The structure being erected looks fairly unremarkable (though it will eventually be topped with striking hexagonal skylights). Along its side is a line of loading bays, suggesting it could be intended as a spillover site for the brimming cargo terminal nearby. This new addition to one of Europe’s busiest air-freight hubs will not hold any old goods, however. It will soon be home to billions of dollars’ worth of fine art and other treasures, much of which will have been whisked straight from collectors’ private jets along a dedicated road linking the runway to the warehouse.
The world’s rich are increasingly investing in expensive stuff, and “freeports” such as Luxembourg’s are becoming their repositories of choice. Their attractions are similar to those offered by offshore financial centers: security and confidentiality, not much scrutiny, the ability for owners to hide behind nominees, and an array of tax advantages. This special treatment is possible because goods in freeports are technically in transit, even if in reality the ports are used more and more as permanent homes for accumulated wealth. If anyone knows how to game the rules, it is the super-rich and their advisers.
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