Rybolovlev has turned up the legal pressure on Bouvier. Beyond getting him arrested in Monaco, the oligarch’s legal team, headed by Tetiana Bersheda, got Singapore’s High Court to impose a $500 million freeze on Bouvier's assets, his MEI Invest Limited, and supposed accomplice Tania Rappo. In Geneva, public prosecutor Jean-Bernanrd Schmid conducted a search in Natural Le Coultre’s headquarters and a gallery looking for documents related to the Modigliani and Da Vinci transactions. Rybolovlev is operating through the two holding companies that own the art collection, Accent Delight International and Xitrans Finance.
Over the years Bouvier has shifted his core business from art transportation to building and operating vast, secretive high-tech fortresses used for storing not just artworks but cars, wine, coins, and furniture. Such repositories, known as free ports, have existed for centuries, but until quite recently their primary purpose was to hold raw materials in transit—a shipment of soybeans, say. They were found primarily in transit zones, such as airports and canals, and they usually enjoyed one of the benefits of existence at the jurisdictional margins: tax and duty freedom.
Keep in mind that Kislyak is the same Russian ambassador who routinely met with numerous members of Trump’s campaign throughout 2016, discussing sanctions, Syria, and Crimea. If Trump really didn’t know what was going on, why is his son-in-law meeting with a bank that has spent years trying to avoid sanctions for laundering money for Putin’s inner circle and controlled by the Russian President himself? If we believe he was that oblivious, Trump’s ignorance of his own business operations would beggar belief.
The wealthy figured this out in a big way back in the 1980s, giving rise to ‘art stars’ valued in the millions. And with the increasing popularity and geographical scope of biennials and art fairs in the 1990s, rich people all over the world now have access to seas of multi-million dollar investments that can be rolled up and stored just about anywhere.
The Responsible Art Market, or RAM, is an industry-supported not-for-profit organization which describes itself as ‘”[r]aising awareness of risks faced by the art industry and providing practical guidance on establishing and implementing responsible practices to address those risks.” On its website, RAM provides both an Art Transaction Due Diligence Toolkit, as well as Guidelines on Combatting Money Laundering and Terrorist Financing (“AML Guidelines”). The AML Guidelines are similar to the protocols set forth by the Basel Institute, but provide slightly more concrete detail. They set forth eight basic principles:
In regards to the critical issue of the source of the funds, the AML Guidelines “encourage” art businesses “to decline payments from a third party who is not their client and buyer of record. If there are legitimate reasons why it is justified for the Art Business to accept payment from a third party, before doing so the Art Business should conduct enhanced due diligence on both their buyer of record and the third party payer[.]” The AML Guidelines also articulate a “preference” for art businesses only “to accept payments from reputable banks in jurisdictions subject to AML regulation and supervision. Such reputable banks and financial institutions are generally subject to a high degree of AML regulation. That said[,] Art Businesses should remain vigilent and not rely entirely on the fact that banks and financial institutions will have carried out the necessary checks and verification to be satisfied that the source of funds is clean.”
"It's easy for [Bouvier and Rappo] to paint me as the stereotypical Russian oligarch," he says. But if he were so interested in hiding his assets from Elena, he says, why would he announce to the world that he had been the victim of a multibillion-dollar scam, in the process letting it be known how much his trusts had overpaid for each of his artworks?
But while Simpson saw disturbing patterns, he was unable to nail anything down, because he couldn’t get the relevant records from banks and other financial institutions. Schiff posed an interesting question: Simpson didn’t have subpoena power, but the committee did. Who should it subpoena if it wanted to learn more? Simpson laid out a roadmap for Schiff:
“Before we looked into the allegations that Trump campaign people were surreptitiously meeting with the Russians it was only an allegation, but it proved to be all too true,” Schiff said. “Before we looked into allegations that Mike Flynn was having secret communications with the Russians and that the Trump transition might be seeking to undermine the sanctions imposed on Russia over its interference to help the Trump campaign, that was only an allegation, but that proved to be true. There's simply no way to either verify or be able to dismiss these serious allegations without looking into them.”
Law enforcement officials in the United States and abroad say “Hannibal” is just one of thousands of valuable artworks being used by criminals to hide illicit profits and illegally transfer assets around the globe. As other traditional money-laundering techniques have come under closer scrutiny, smugglers, drug traffickers, arms dealers and the like have increasingly turned to the famously opaque art market, officials say.
He told Swiss publication Le Temps that Rybolovlev owes his company “tens of millions of euros,” while claiming that the oligarch set him up after failing to cough up the cash for Rothko’s No. 6 – Violet, Green, and Red. “[Rybolovlev] couldn’t pay the balance of the last painting he bought from my company, the most beautiful Rothko in the world.” Invited by the buyer to chat, Bouvier “fell into an ambush” as he was detained and handcuffed by eight police officers.
Regardless of whether this provision ultimately is enacted, the underlying issue will persist. This post discusses some of the general concerns that the art and antiquities world can be misused as a conduit for dirty money. We then discuss the AML Standards for Art Market Operators proposed by the Basel Institute on Governance, and similar standards set forth by the Responsible Art Market, both of which attempt to set forth a framework for those in the business of trading art to mitigate their money laundering risks.…
At the same time, Trump partnered with a real estate developer called Bayrock, founded by Soviet-born Tevfik Ariv who set up office in Trump Tower. In 1999, Russian-born former gangster implicated in a Wall Street pump-and-dump scheme and money laundering, Felix Sater, joined Bayrock and would become a top Trump adviser. Sater claimed they would talk often, with him pitching ideas on a regular basis. By 2005, the duo is trying yet again to build a hotel in Moscow to no avail.
We empirically analyze the illicit trade in cultural property and antiques, taking advantage of different reporting incentives between source and destination countries. We generate a measure of illicit trafficking in these goods by comparing imports recorded in United States' customs data and the (purportedly identical) trade recorded by customs authorities in exporting countries. This reporting gap is highly correlated with corruption levels of exporting countries. This correlation is stronger for artifact-rich countries. As a placebo test, we do not observe any such pattern for US imports of toys. We report similar results for four other Western country markets. (JEL F14, K42, Z11, Z13)