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The Art Industry and U.S. Policies that Undermine Sanctions

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The Art Industry and U.S. Policies that Undermine Sanctions (2020)
by the Permanent Subcommittee on Investigations
Executive Summary
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4582243The Art Industry and U.S. Policies that Undermine Sanctions2020by the Permanent Subcommittee on Investigations
​

United States Senate
PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
Committee on Homeland Security and Governmental Affairs

Rob Portman, Chairman
Tom Carper, Ranking Member


THE ART INDUSTRY AND
U.S. POLICIES THAT UNDERMINE
SANCTIONS

STAFF REPORT

PERMANENT SUBCOMMITTEE ON
INVESTIGATIONS

UNITED STATES SENATE

A complex logo with a bald eagle gripping olive branches and arrows in its talons, wings spread wide below a field of golden stars, a banner with reading "E PLURIBUS UNUM" in its beak, and a shield with elements of the American flag on its chest

​

THE ART INDUSTRY AND
U.S. POLICES THAT UNDERMINE SANCTIONS

TABLE OF CONTENTS

I.IIEXECUTIVE SUMMARY
1
II.IBACKGROUND
16
A. U.S. Sanctions Enforcement
16
1. The U.S. Treasury Department
16
2. Sanctions Following the Russian Federation’s Invasion of Crimea
20
B. The Art Market
33
1. Money Laundering in the Art Market
35
2. The Art Industry is the Largest Legal, Unregulated Market in the United States
36
3. The Applicability of the Berman Amendment to High-value Art
38
4. Shell Companies
39
C. The Four Major Auction Houses
41
1. Sotheby’s
41
2. Christie’s
43
3. Phillips
45
4. Bonhams
46
5. Online Auctions during the COVID-19 Pandemic
46
D. Art Dealers, Art Galleries, and Art Fairs
47
E. Voluntary Anti-Money Laundering and Sanctions Programs in the Art Industry
49
1. Sotheby’s
50
2. Christie’s
55
3. Phillips
58
4. Bonhams
59
5. Private Art Dealer
61
​
III.ROTENBERG CASE STUDY: USING OFFSHORE COMPANIES, LAWYERS, AND ART ADVISORS TO MASK OWNERSHIP
63
A. Attorney Mark Omelnitski and the Markom Group
63
1. The Markom Group Established Rotenberg-linked Shell Companies
67
2. Rotenberg-Linked Shell Companies were Used to Purchase Art
69
B. Art Advisor Gregory Baltser
79
1. The Auction Houses Viewed Mr. Baltser as the Principal Buyer
81
2. Mr. Baltser Purchased Art as an Agent for Steamort
84
3. Mr. Baltser Established BALTZER Auction Agency and Club in Moscow
90
4. Examples of Pre-Sanctions Art Purchases
105
5. The United States Sanctioned Arkady and Boris Rotenberg on March 20, 2014
112
6. Examples of Post-Sanctions Art Purchases
115
7. Mr. Baltser Shipped Art Purchased by Rotenberg-linked Companies to the Hasenkamp Storage Facility in Germany
131
8. Mr. Baltser Attempted to Sell Art Purchased with Funds Traced to Rotenberg-linked Companies
133
9. Mr. Baltser Did Not Cooperate with the Subcommittee’s Investigation
141
10. During the Course of the Subcommittee’s Investigation Phillips, Christie’s, and Sotheby’s Stopped Transacting with Mr. Baltser
142
IV.ADDITIONAL U.S. DOLLAR TRANSACTIONS BY ROTENBERG-LINKED SHELL COMPANIES
144
V.CONCLUSION
147

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).

Public domainPublic domainfalsefalse

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