Bloomberg

(Bloomberg) -- The recent case of the $20 million Amedeo Modigliani painting allegedly stolen by Nazis and ‘discovered’ this year at the Geneva Free Port, prompting a criminal probe, shows the need to implement more stringent disclosure rules on collectors, according to the directors of the world’s largest tax-free warehouse.

The painting, “Seated Man With a Cane,” had been shown in public four times since it was first located as part of a U.S. court case in 2011, Jean-Pierre Vila, the free port’s general-secretary told reporters at a briefing on Wednesday. Even the name of the company that owned the painting, International Art Center, had been disclosed, he said. However, Swiss Customs doesn’t require the identification of the ultimate owner, who remained secret. This only exacerbated the situation, he said.

Even if the disclosure to Swiss Customs “is legally correct, it is in some ways misleading, instills distrust and adds to the” gossip around such cases, Vila said.

Geneva prosecutors in April opened a criminal probe into the ownership of the painting, which is at the core of a transatlantic dispute between the grandson of its original owner, Parisian art dealer Oscar Stettiner, and collector David Nahmad, who owns the painting through International Art Center. The painting was ordered sequestered on April 11 as the probe got underway but was released when they closed the case a few weeks later.

Scandals

The Geneva Free Port is trying to clean up its reputation after suffering as a result of the Modigliani affair and an earlier scandal involving one of its major tenants, art dealer Yves Bouvier. Those events have even triggered some customers in recent months to remove their valuables and move them to less scrutinized venues. Mindful of what director-general Alain Decrausaz called the “strong competition” from the free ports that have opened since 2010 in Singapore, Delaware, Luxembourg and Beijing, the 127-year-old free port has begun implementing its own reforms to boost transparency.

A biometric identification system for all clients and tenants is being installed, Decrausaz said. To address the issue of stolen antiquities such as recent cases involving Etruscan sarcophaghi, and Roman artifacts, the free port has hired an outside inspection service to evaluate new goods submitted for storage that are considered antiquities, Decrausaz said.

Panama Link

The fact that renowned collector Nahmad actually owned the painting came to light in April when the link between him and the International Art Center was disclosed as part of the millions of pages of documents leaked from Panamanian law firm Mossack Fonseca. Those documents, known as the Panama Papers, have led to widespread revelations about offshore accounts owned by the rich and powerful, and forced the prime minister of Iceland to resign. A lawyer for David Nahmad was not immediately available to comment.

Any change of disclosure rules rests, however, with the Swiss federal government and right now it only requires tenants to disclose their identity as a corporation, not the actual owner. David Hiler, who was hired as the president of the Geneva Free Port a year ago to implement reforms, told reporters there are other areas the government needs to address, including the need for better cooperation between customs authorities.

To contact the reporter on this story: Hugo Miller in Geneva at hugomiller@bloomberg.net. To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Albertina Torsoli

©2016 Bloomberg L.P.

bloomberg

 Bloomberg