Oligarchs skirt US sanctions through art sales
Russian oligarchs have skirted U.S. sanctions through murky
high-end art deals, according to a congressional report released Wednesday that
urged lawmakers to rein in an unregulated industry favored by money launderers.
The secrecy of the art world — in which buyers often remain
anonymous — gave billionaire friends of President Vladimir Putin access to the
American economy even after the United States sanctioned them following
Russia’s 2014 annexation of Crimea, the report found.
Investigators traced $18 million in art buys to shell
companies linked to Arkady and Boris Rotenberg, close Putin associates who
American officials say benefited financially from the Crimean annexation.
The Senate’s Permanent Subcommittee on Investigations
highlighted loopholes that exempt even the most lucrative art sales from
financial safeguards aimed at stopping money laundering.
Major U.S. auction houses acknowledged never asking for the
true identity of the buyer, the report found, dealing with an intermediary for
the sales in question “even when it was well-known that the ultimate owner was
someone else.”
In all, the shell companies linked to the oligarchs moved at
least $91 million through the U.S. financial system after the sanctions were
imposed, the report found.
"It is alarming and completely unacceptable that
common-sense regulations designed to prevent money laundering and the financing
of terrorism do not apply if someone is purchasing a multimillion-dollar piece
of art,” said U.S. Sen. Tom Carper, of Delaware, the subcommittee's top
Democrat.
U.S. Sen. Rob Portman, Republican of Ohio, said he supports
legislation to lift the “curtain of secrecy” that has made the art industry a
preferred vehicle of money launderers.
The Rotenbergs could not be reached for comment. They have
been the subject of U.S. sanctions since March 2014, singled out for their
close ties to Putin. Arkady Rotenberg is a childhood friend and former judo
sparring partner of Putin. His companies won billions in road contracts in
Sochi, the host of the 2014 Winter Games.
Global art sales reached about $64 billion last year, with
the United States accounting for nearly half the market. The industry remains
unregulated in the U.S., however, attracting the likes of racketeers and money
launderers.
Any reforms to the notoriously opaque art world will face
vigorous opposition from well-heeled collectors “who don’t want anybody to know
what they have,” said Robert Wittman, a former FBI agent who founded the
bureau’s Art Crime Team.
U.S. art sales would plummet, Wittman said, if Congress
followed the subcommittee's recommendation to extend the Bank Secrecy Act to
businesses brokering high-value art transactions.
The report points to new anti-money laundering rules the
European Union adopted recently for expensive art deals, including verifying
the identity of the buyer and seller of the art. That directive followed the
release of the so-called Panama Papers, a collection of more than 11 million
secret financial documents that illustrated how some of the world’s richest
people hide their money.
The congressional report released Wednesday cited an email
chain contained in the Panama Papers that listed nine shell companies in the
British Virgin Islands linked to the Rotenbergs.
It said the Rotenbergs' art deals in the U.S. were
facilitated by Gregory Baltser, an American citizen and art adviser based in
Moscow who has “no plans to return to the United States.”
Baltser's attorney sent the congressional subcommittee a
letter denying allegations that he did business with the Rotenbergs.
Comments
Post a Comment