The Dreiland: Rhine, Trade, Fairs and Art — a part of the book Basel as an International Financial Centre by Dr Alexander Ressos.
Part H leaves the institutions and industries of the city and turns to the space in which they operate. Basel lies at the point where Switzerland, France and Germany meet, at the bend of the Rhine that Part A described as the knee of the river. The region that the inhabitants call the Dreiland forms a single economic area in many respects, although it is divided by two national borders, by the external border of the European Union customs territory and by three systems of tax, social security and labour law. Goods, workers, capital and works of art cross these borders every day. The legal friction that arises at each crossing is the raw material of a considerable part of the professional services offered in Basel, from customs brokerage and tax advice on cross-border employment to export control compliance and the due diligence of the art trade.1
The Dreiland is also a space shaped by trade over many centuries. The Rhine carried goods long before the railways arrived. The fairs of Basel go back to the privilege of 1471, while the Kaufhaus collected duties on goods passing through the city for most of the late Middle Ages and the early modern period.2 The modern economy of the region continues these traditions in new forms. The Rhine ports handle a part of Swiss foreign trade, and the EuroAirport operates as a binational airport on French soil. Customs authorities enforce sanctions and export controls at the border, while Art Basel has made the city a principal venue of the global art market.
The five chapters of Part H follow these strands. Chapter I describes the Rhine ports and the logistics industry, including the law of Rhine navigation, shipping finance, customs warehousing and the ecological recovery of the river after Schweizerhalle. Chapter II examines the trinational economy, the cross-border workers who commute into Basel every day and the taxation of their income, together with the EuroAirport and its unusual legal status. Chapter III treats customs, export control and sanctions at the border as the modern counterpart of the French customs officers whom Part C encountered in the eighteenth century. Chapter IV traces the fairs from the Mustermesse to Art Basel and the MCH Group, while Chapter V concludes with the art market as an asset class, the free ports, the protection of cultural property and the money laundering risks associated with works of art.
This part belongs to Basel as an International Financial Centre by Dr Alexander Ressos, published here in full, section by section.
The Rhine Ports and Logistics — conclusion
The Rhine ports connect landlocked Switzerland with the seaports of the North Sea and form a trimodal hub in which ship, rail and road meet. Read more Basel · The DreilandSwitzerland's gateway to the sea
Switzerland is a landlocked country whose economy depends on imports of energy, raw materials and food and on exports of high-value goods. Read more Basel · The DreilandThe Swiss Rhine Ports as an institution
For most of the twentieth century, the ports were run separately by the two half-cantons. Basel-Stadt administered Kleinhüningen and the St. Read more Basel · The DreilandKleinhüningen, Birsfelden and Muttenz
The port of Kleinhüningen, on the right bank of the Rhine in the north of Basel-Stadt, is the largest and the most central of the Swiss Rhine ports. Read more Basel · The DreilandWhat the river carries
The volumes handled in the Swiss Rhine ports fluctuate from year to year with the water level of the river, the state of the economy and the prices of energy. Read more Basel · The DreilandThe Mannheim Act and the freedom of navigation
The Rhine is one of the oldest international rivers in the legal sense. In 1815 the Congress of Vienna proclaimed the principle of freedom of navigation on the rivers that separate or cross several… Read more Basel · The DreilandThe Central Commission in Strasbourg
The Central Commission for the Navigation of the Rhine (CCNR) is often described as the oldest international organisation in the world, since its origins go back to the Congress of Vienna and it held… Read more Basel · The DreilandCrews, vessels and dangerous goods
Navigation on the Rhine is a regulated profession. A boatmaster who steers a vessel on the Rhine requires a qualification recognised under the Rhine regime, traditionally the Rhine patent… Read more Basel · The DreilandThe Swiss flag at sea
The Rhine connects Switzerland with the seaports, while the oceans beyond are the domain of the Swiss maritime fleet. Read more Basel · The DreilandShipping finance
The financing of ships is a specialised branch of banking that combines asset finance with the particular risks of the shipping market. Read more Basel · The DreilandLow water and the climate risk
The navigability of the Rhine depends on the level of the river, which in turn depends on precipitation and on the melting of snow and glaciers in the Alps. Read more Basel · The DreilandThe logistics companies of Basel
The port and the customs station gave rise to a logistics industry whose companies became international leaders. Danzas is the oldest example. Read more Basel · The DreilandPharmaceutical logistics and the cold chain
The life sciences industry has shaped a specialised segment of the logistics market in Basel. Read more Basel · The DreilandRail, the Gotthard and the Rhine–Alpine corridor
Basel is a hub on the most important north-south freight corridor of Europe, which links the North Sea ports with the ports of northern Italy and the industrial regions of Lombardy and Piedmont. Read more Basel · The DreilandGateway Basel Nord and the third port basin
The project Gateway Basel Nord envisages a trimodal container terminal on the former freight station area of the Deutsche Bahn in the north of Basel, connected to a new third port basin (Hafenbecken… Read more Basel · The DreilandThe port and the city: Klybeck and the Rhine quays
The port and the city compete for the same land. The Klybeck quay and the Westquai peninsula at Kleinhüningen lie close to the residential districts of Kleinbasel. Read more Basel · The DreilandCustoms warehousing and open customs warehouses
The customs status of goods in the port determines their tax burden and the procedures that apply to them. Read more Basel · The DreilandContracts and liability on the river
The carriage of goods on the Rhine is governed by a combination of international conventions, national law and standard terms. Read more Basel · The DreilandThe river after Schweizerhalle
The Rhine that flows past the ports today differs profoundly from the river of 1986. Read more Basel · The DreilandThe Trinational Economy: Cross-Border Workers and the EuroAirport — overview and summary
Basel lies at a point where three national legal orders meet within a single urban area. Read more Basel · The DreilandThe Dreiland as a functional region
Geographers describe the area around Basel as a functional region, meaning a territory whose inhabitants live, work, shop and spend their leisure time across administrative boundaries. Read more Basel · The DreilandRegio Basiliensis and the beginnings of institutional cooperation
The modern institutions of cross-border cooperation began with a private initiative. Read more Basel · The DreilandThe Trinational Eurodistrict Basel
The local authorities of the agglomeration first organised their cooperation in 1995 under the name Trinationale Agglomeration Basel (TAB), a project body that prepared studies on transport, urban… Read more Basel · The DreilandThe Upper Rhine Trinational Metropolitan Region
A broader structure was created in December 2010, when representatives of the political, economic, scientific and civil-society actors of the Upper Rhine signed a declaration establishing the… Read more Basel · The DreilandCross-border commuters: numbers and structure
The most tangible expression of the trinational economy is the daily movement of cross-border commuters, known in Switzerland as Grenzgänger and in France as frontaliers. Read more Basel · The DreilandThe G permit and the Agreement on the Free Movement of Persons
Under Swiss immigration law, a foreign cross-border commuter needs a cross-border commuter permit, the permit G (Grenzgängerbewilligung). Read more Basel · The DreilandSocial security coordination
The free movement of persons would be of little use if workers lost their social security rights when crossing a border. Read more Basel · The DreilandThe framework agreement on telework
The solution took the form of a multilateral framework agreement concluded under Article 16 paragraph 1 of Regulation 883/2004, which allows the competent authorities of two or more states to agree… Read more Basel · The DreilandUnemployment and health insurance
Unemployment insurance follows a special rule for frontier workers. Article 65 of Regulation 883/2004 provides that a wholly unemployed frontier worker receives unemployment benefits from the state… Read more Basel · The DreilandTaxing commuters from Germany: Article 15a
The taxation of employment income across borders is governed in principle by Article 15 of the OECD Model Tax Convention, under which salaries are taxable in the state where the employment is… Read more Basel · The DreilandTaxing commuters from France: the agreement of 1983
The Franco-Swiss double taxation convention of 9 September 1966 follows the general principle of taxation in the state of employment. For frontier workers it refers to special agreements. Read more Basel · The DreilandHome office after the pandemic: the arrangements of 2023
The spread of home working after 2020 raised a question that the drafters of 1983 could not have foreseen. Read more Basel · The DreilandWages, prices and the franc
Commuting across the border is driven by differences in wages and prices. Swiss nominal wages are considerably higher than those in Baden and much higher than those in Alsace, while living costs,… Read more Basel · The DreilandShopping tourism across the border
The reverse flow is that of Swiss consumers shopping in Germany and France. Prices for food, clothing, cosmetics and household goods are considerably lower in the neighbouring countries, which leads… Read more Basel · The DreilandThe EuroAirport: a treaty airport
The EuroAirport Basel-Mulhouse-Freiburg is one of the most unusual airports in the world. Read more Basel · The DreilandThe Swiss sector and the dispute over tax and labour law
The binational structure has been a source of legal disputes for decades. The 1949 Convention regulated the construction and operation of the airport but did not exhaustively determine which law… Read more Basel · The DreilandCargo, passengers and the rail link
The EuroAirport handles passenger and cargo traffic. Before the COVID-19 pandemic it served about nine million passengers a year, a figure reached again after the recovery, which placed it third… Read more Basel · The DreilandRail and tram across the border
Basel's rail network has been trinational since the nineteenth century. Part D has described the Badischer Bahnhof, the German railway station on Swiss soil, which was built under the treaty of 1852… Read more Basel · The DreilandSpatial planning, housing and the IBA Basel
The development of the trinational region raises questions of spatial planning that no single authority can answer. Read more Basel · The DreilandEmployers and the accompanying measures
Employers in Basel who employ cross-border commuters face a range of legal obligations. Read more Basel · The DreilandAdvising across three jurisdictions
The trinational economy generates a steady demand for legal and tax advice that spans the three countries. Read more Basel · The DreilandCustoms, Export Control and Sanctions at the Border — overview and summary
Every chapter of this book has passed, at some point, through a customs office. The Kaufhaus of the medieval city collected tolls on the goods that crossed the Rhine bridge. Read more Basel · The DreilandFrom the Kaufhaus to the border office
The continuity is worth stating at the outset because it explains much of the present. Read more Basel · The DreilandThe Federal Office for Customs and Border Security
The authority responsible for the Swiss side of the border is the Federal Office for Customs and Border Security (FOCBS), known in German as the Bundesamt für Zoll und Grenzsicherheit (BAZG) and in… Read more Basel · The DreilandDaziT and Passar: digital customs
The transformation of the customs administration was driven above all by a digital programme called DaziT, a name formed from the Romansh word for customs, dazi, and the letter T for transformation. Read more Basel · The DreilandThe new customs legislation
The Customs Act of 18 March 2005, in force since 1 May 2007, has governed Swiss customs law for almost two decades. Read more Basel · The DreilandSwitzerland outside the customs union
The most basic legal fact about the Basel border is that it is a customs border in the full sense. Read more Basel · The DreilandSchengen without a customs union
Since Switzerland joined the Schengen area, the control of persons at its borders with Germany and France has followed the logic of an internal Schengen border. Read more Basel · The DreilandThe crossings of the Dreiland
The physical border around Basel is long and permeable. Within a radius of a few kilometres, the city has more than a dozen road crossings with Germany and France, several railway lines, two… Read more Basel · The DreilandPolice and customs cooperation across three borders
Customs control in a trinational region depends on cooperation between administrations that answer to different governments. Read more Basel · The DreilandThe customs security agreement and the authorised economic operator
After the terrorist attacks of 11 September 2001, customs administrations worldwide introduced advance security declarations, under which goods must be notified electronically before they arrive or… Read more Basel · The DreilandExport control at the border: the role of customs
Part G explained that Swiss export control law distinguishes between war material, governed by the War Material Act, and dual-use goods and specific military goods, governed by the Goods Control Act… Read more Basel · The DreilandLicensing, catch-all and the ELIC system
Licence applications for dual-use goods are submitted to SECO through an electronic platform called ELIC, which has replaced paper procedures for most export control matters. Read more Basel · The DreilandSeizure and criminal proceedings in Switzerland
When customs officers detect a suspected violation of export control or sanctions law, the first step is usually the provisional seizure of the goods. Read more Basel · The DreilandSanctions circumvention and the Russia diversion problem
Since 2022, the enforcement of the Russia sanctions has become the dominant theme of border control in Europe. Read more Basel · The DreilandThe German side: the Zoll and the Außenwirtschaftsgesetz
On the German side of the border, customs is a federal responsibility exercised by the Generalzolldirektion in Bonn and by regional main customs offices. Read more Basel · The DreilandThe French side: the douane in Mulhouse
The French customs administration, the Direction générale des douanes et droits indirects (DGDDI), is organised in interregional and regional directorates. Read more Basel · The DreilandCash and bearer instruments at the border
Cash controls have become an important part of border enforcement in the context of anti-money laundering policy. Read more Basel · The DreilandCrypto-assets and digital assets at the border
Crypto-assets and digital assets pose a conceptual challenge to border control. A person who holds a significant amount of bitcoin or stablecoins on a hardware wallet or in a memorised seed phrase… Read more Basel · The DreilandCultural property at the border
Cultural property occupies a special place among the goods that customs officers control. Read more Basel · The DreilandCounterfeits and intellectual property
The protection of intellectual property at the border is another task that the customs administration performs on behalf of private rights holders. Read more Basel · The DreilandVAT, e-commerce and shopping tourism
Value added tax is the largest source of revenue collected at the Swiss border, much larger than customs duties. Read more Basel · The DreilandFree zones and open customs warehouses
The customs law also provides for places where goods may be stored without being released into free circulation. Read more Basel · The DreilandThe World Customs Organization and international standards
The rules applied at the Basel border are shaped by international standards that are developed far from the Rhine. Read more Basel · The DreilandPractice at the border
The legal structure described in this chapter is complex, but its daily operation is largely invisible. Read more Basel · The DreilandFairs: from Mustermesse to Art Basel — overview and summary
Fairs have accompanied the history of Basel since the late Middle Ages. Part A described how the Emperor Frederick III granted the city a fair privilege in 1471, at a moment when the fairs of Geneva… Read more Basel · The DreilandFrom the privilege of 1471 to the Herbstmesse
The privilege of 1471 allowed Basel to hold two annual fairs, of which the autumn fair has survived to the present day. Read more Basel · The DreilandThe Schweizer Mustermesse of 1917
The modern fair business of Basel began in the middle of the First World War. Although Switzerland was neutral, it was surrounded by belligerents. Read more Basel · The DreilandThe fairground on the Kleinbasel side
The fairground on the Messeplatz is today one of the most visible pieces of architecture in Kleinbasel. Read more Basel · The DreilandThe economics of a trade fair
A fair company sells space, attention and time. Its principal revenue comes from exhibitors, who rent floor space by the square metre and pay additional charges for services such as electricity,… Read more Basel · The DreilandBaselworld: the rise of the watch and jewellery fair
Watches were present at the Mustermesse from the beginning. In 1917 a section of the fair was devoted to the products of the Swiss watch industry, which was then concentrated in the Jura arc from… Read more Basel · The DreilandThe decline and end of Baselworld
From the mid-2010s, that risk materialised. The watch industry faced a fall in demand after the Chinese anti-corruption campaign of 2012 to 2014 had reduced the market for luxury gifts, and the… Read more Basel · The DreilandMCH Group: from cooperative to listed company
The organisational history of the fair company reflects the transformation of a public-private institution into a commercial group. Read more Basel · The DreilandArt Basel: the foundation of 1970
Art Basel was founded in 1970 by three Basel gallerists: Ernst Beyeler, Trudl Bruckner and Balz Hilt. Read more Basel · The DreilandUnlimited, Miami Beach, Hong Kong, Paris and Qatar
From the 1990s onwards, the fair developed new formats and new locations. In 2000, Art Basel introduced Unlimited, a section in a separate hall for large-scale works, installations, sculptures and… Read more Basel · The DreilandThe economics of an art fair
The Basel edition of Art Basel today presents roughly 280 to 290 galleries from about forty countries, selected from a much larger number of applicants, and attracts in the order of ninety thousand… Read more Basel · The DreilandThe Art Basel and UBS Art Market Report
Since 2017, Art Basel and UBS have published an annual report on the global art market, written by the cultural economist Clare McAndrew and her firm Arts Economics. Read more Basel · The DreilandSatellite fairs and the fair week
Art Basel has generated an ecosystem of satellite fairs that take place in the same week. Read more Basel · The DreilandThe fair as a financial event
Art Basel is an art fair, yet it is also a financial event. The collectors who buy at the fair are often clients of private banks, family offices and wealth managers, many of whom view their… Read more Basel · The DreilandArt as an asset class
Part B described the double portrait of the Basel money changer Jakob Meyer zum Hasen, painted by Hans Holbein the Younger in 1516, and the later Darmstadt Madonna commissioned by the same patron. Read more Basel · The DreilandThe law of the fair: exhibitor contracts and admission
Participation in a fair is governed by a contract between the organiser and the exhibitor, usually composed of an application form, general terms of participation and specific regulations for the… Read more Basel · The DreilandTemporary import, customs and value added tax
Works of art and other goods brought to a fair from abroad must pass through customs. Read more Basel · The DreilandResale right: why Switzerland has none
One legal difference between Switzerland and the European Union is of particular importance for the art market: the artist's resale right, or droit de suite. Read more Basel · The DreilandThe pandemic and the online viewing room
The pandemic of 2020 and 2021 interrupted the fair business for almost two years. Art Basel Hong Kong in March 2020 was cancelled, followed by the Basel edition in June 2020 and the Miami Beach… Read more Basel · The DreilandSoft power and the name of the city
Art Basel has made the name of the city known among people who might otherwise never have heard of it. Read more Basel · The DreilandThe practitioner's view
For a lawyer or wealth adviser, the fair week is a time of concentrated activity. Clients who buy at the fair may need advice on the structure of the acquisition, on the place of storage, on the… Read more Basel · The DreilandThe Art Market: Money Laundering, Freeports and Provenance — overview and summary
Every June, collectors, dealers, curators and advisers from all continents gather in the halls of the Messe Basel for Art Basel, the fair whose history the preceding chapter traced from the… Read more Basel · The DreilandCharacteristics of the art market
By the standards of trade in movable goods, the art market is a large market, although its volumes appear modest beside those of finance. Read more Basel · The DreilandInternational findings on money laundering risk
For many years the Financial Action Task Force addressed the art market only in passing, in its typology reports on trade-based money laundering and on high-value goods. Read more Basel · The DreilandSwiss regulation of art dealers
The Swiss Anti-Money Laundering Act applies primarily to financial intermediaries. Read more Basel · The DreilandThe European and British regimes
The European Union chose a broader approach. The Fifth Anti-Money Laundering Directive of 2018 added two categories of obliged entities that matter for the art market. Read more Basel · The DreilandSanctions and the art market
The relationship between art and sanctions became a public topic in July 2020. In that month the Permanent Subcommittee on Investigations of the United States Senate published a staff report entitled… Read more Basel · The DreilandFreeports: function and law
A freeport, in Swiss terminology a customs free warehouse (Zollfreilager), is a secured area in which goods may be stored without being imported into the Swiss customs territory. Read more Basel · The DreilandThe Geneva Freeport
The best known Swiss freeport is that of Geneva, operated by Ports Francs et Entrepôts de Genève SA, a company majority-owned by the Canton of Geneva. Read more Basel · The DreilandThe Basel Freilager on the Dreispitz
Basel has its own tradition of free warehouses. The Dreispitz, an area of about fifty hectares on the border between the city of Basel and the municipality of Münchenstein in Basel-Landschaft, served… Read more Basel · The DreilandThe 2016 reform of the law on free warehouses
The Swiss Federal Audit Office examined the customs free warehouses in a report published in 2014. Read more Basel · The DreilandOpacity illustrated: the Bouvier–Rybolovlev dispute
The most widely reported illustration of the questions raised by freeports is the long dispute between the Swiss art dealer and storage entrepreneur Yves Bouvier and the Russian businessman Dmitry… Read more Basel · The DreilandProvenance and art looted under National Socialism
Provenance is the documented history of a work's ownership from its creation to the present. Read more Basel · The DreilandThe findings of the Independent Commission of Experts
The historical background was examined by the Independent Commission of Experts Switzerland – Second World War, known after its chairman Jean-François Bergier, whose work on gold and banking was… Read more Basel · The DreilandBasel cases: the 1939 purchases and the Glaser collection
Basel's public collection has its own chapter in this history. In 1939 the Kunstmuseum Basel, under its new director Georg Schmidt, acquired a group of important modern works that the National… Read more Basel · The DreilandThe Gurlitt bequest
The most prominent Swiss case of recent years concerns Bern. In 2012 German customs and prosecutors found a large collection of works in the Munich apartment of Cornelius Gurlitt, son of the art… Read more Basel · The DreilandAntiquities and the Cultural Property Transfer Act
The trade in antiquities poses different questions. Here the concern lies in the illicit excavation of archaeological sites and the export of objects in breach of the laws of their countries of… Read more Basel · The DreilandThe Basel Art Trade Guidelines and industry standards
The Basel Art Trade Guidelines of the Basel Institute on Governance, mentioned in Part E, extend the logic of these duties to the money laundering and corruption risks of the art market. Read more Basel · The DreilandDue diligence in practice
For a buyer, a seller or a bank financing a purchase, due diligence in the art market comprises three layers. The first concerns the parties. Read more Basel · The DreilandArt-secured lending and art funds
Works of art have increasingly become collateral for loans. Private banks lend against valuable collections, typically at a loan-to-value ratio well below that for securities, because valuation is… Read more Basel · The DreilandTokenisation, NFTs and crypto-assets and digital assets
The newest chapter in the financialisation of art is tokenisation. A work can be held by a company whose shares are issued as tokens on a blockchain, which allows investors to acquire fractions of a… Read more