President of the European Commission Jean-Claude Juncker has received criticism from MEPs for his response to allegations about “freeports”, secure warehouses used for the tax-exempt storage of high value goods.
Freeports, such as Le Freeport in Luxembourg, which was authorised during Juncker’s time as prime minister of the country, were established as bonded warehouses for goods in transit, and therefore free of import duties or sales taxes.
But they are now used for the indefinite storage of high-value items such as paintings, precious stones, antiques and gold, all of which can potentially be traded within the premises without tax authorities being notified.
MEPs on a special committee for financial crime and tax evasion have criticised freeports for circumventing international transparency rules and potentially enabling money laundering.
“The high level of monetary transactions, the unfamiliarity of enforcement agencies with values and the portable nature of art itself all contribute to making the art market a suitable vehicle for illegal activity,” said the committee’s report.
The majority shareholder of Luxembourg Freeport is businessman and art dealer Yves Bouvier, who described it to BBC News as “the most controlled and transparent bonded warehouse in Europe, with 100% of the goods entering and exiting being checked and controlled by the customers and mandatory identification of all beneficiary owners.”
However, Anamaria Gomes MEP, who visited the warehouse, described the controls as “perfunctory”, while MEP Wolf Klinz accused Juncker of not taking their concerns seriously.
The European Commission responded to warnings by insisting that there was “no evidence showing that free zones in the EU are systematically use to commit fraud.”
However, it described “unprecedented strides to boost tax transparency and to close loopholes leading to large-scale tax avoidance at EU level. Steps that would have been unthinkable just a few short years ago without the political will and drive of President Juncker himself.”
Source: BBC News