Likely Targets
Instead, movement into free ports might appeal to individuals not yet on the sanctions list but who consider themselves likely targets. Their art, safely inside a tax-free warehouse in a country they’re not associated with, has a much higher likelihood of staying untouched. “The logical instinct—and self-preservation instinct—is to take anything that’s not stuck in an EU or U.K. jurisdiction and get it inside of a free port or a home” says Neville.
Swiss customs said it cannot say “for tactical reasons” if it’s noticed an uptick in customs filings of valuables since Russia invaded Ukraine. Dietl, of Delaware Freeport, says he has no clients on the sanctions list and “less than a handful of clients with Russian-sounding names.”
Insiders are girding themselves for change.
“I think it’s about to emerge from being a theoretical to a tangible problem,” says Nicholas O’Donnell, editor of the Art Law Report and a partner at Sullivan & Worcester LLP in Boston. This means that lawyers will have to be increasingly vigilant when representing clients in art deals.
“We’d be foolish not to have our guard up about the counterparty and who it might be,” says O’Donnell. “With the landscape of sanctions changing so rapidly, that person you do a deal with now may be on a sanctions list two weeks from now.”
This article was provided by Bloomberg News.