Consistent with general AML principles, the AML Standards stress that beneficial ownership may be obscured behind multiple layers of intermediaries, such as shell companies or offshore companies involving trusts. The AML Standards further provide a list of possible red flags for identifying increased risks of money laundering presented by a client that:
These offshore companies can cross borders, invest and transfer cash between each other, and after creating a frustrating enough web of transfers and exchanges, as many of them as vague and anonymous as possible mid-transit, they can invest in money-making ventures. Over time, they build small empires in their target destinations, which for Russians are often Switzerland and the UK, particularly London. But that’s fairly basic. The real pros are a lot sneakier than that, using charitable organizations and nonprofits as their identity shields.
Initially, the oligarchs used intelligence officers as their personal security guards but Vladimir Putin flipped the system when he came to power in 2000, so that the intelligence services now controlled the oligarchs. The men who had made their fortunes through the privatisation of Russia’s infrastructure and natural resources now faced a choice – to share their cash with Putin’s circle or face the consequences.
The police also arrested Tania Rappo, a charismatic Monaco socialite whom officers interrupted in the middle of a massage. Once a member of Rybolovlev's inner circle, Rappo and her husband Olivier, a retired dentist, had dined with the tycoon and his parents only days before. Now facing charges of money laundering, she would later tell me over dinner how the oligarch had plied her with drink as they chatted in his penthouse.
The 2,200 photographs by masters like Alfred Stieglitz, Edward Weston and Edward Steichen — more than could fit into an 18-wheeler — were paid for, court papers say, with some of the $78 million that the authorities say Mr. Rivkin got from defrauding oil companies like Shell, Exxon, and Mobil. Mr. Rivkin, who has not been charged with any crimes, was last thought to be in Spain and had arranged to have the photos shipped there.
Los Angeles-based editor of Politech, ex-Soviet computer lobotomist. Specializes in, but not limited to, science, AI, the web, conspiracy theories, and statistics. His work has been featured in or mentioned by How Stuff Works, BusinessWeek, Discovery News/Seeker, The Shift With Drex, Le Monde, SEED, Bad Astronomy, Science To The People, i09, and RawStory, among others.
The AML Standards for Art Market Operators (“AML Standards”) are set forth by the Basel Institute on Governance, an independent not-for-profit organization. Not surprisingly, the AML Standards adopt a “risk based” approach to establishing measures to mitigate money laundering risks, and further note that “[s]mall businesses may not have the resources to address money-laundering risks in the same way that large auction houses or major dealers and galleries will have, and may have a different risk exposure.” The AML Standards are intended to apply to everone trading in art objects, and intermediaries between buyers and sellers. They also suggest that service industries supprting the trade in art objects that are already subject to AML laws, like financial institutions, should identify their clients and customers in the art trade “as higher risk as long as there are no internationally applicable standards.”
When addressing the KYC procedures under Guideline 3, the AML Guidelines explain that establishing a client’s risk profile will require an art business to obtain information on the client; understand the purpose and intended nature of the transaction; and understand the client’s source of wealth and how they acquired their art collection. The AML Guidelines also stress the need to identify beneficial ownership, “even if the contracting client raises confidentiality concerns,” and note that the art business “may also choose to include appropriate warranties and representations in their agreements with their clients to emphasise the importance of this point.” Further, art businesses should peform due diligence on intermediaries, such as art advisors or brokers, acting for one of the parties to a transaction.