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The Rotenberg Brothers were Suspected of Bypassing US Sanctions with the Help of Art
July 29, 2020 09:00


US-sanctioned billionaires Arkady and Boris Rotenberg have found a way to get around the restrictions by making millions of dollars in art deals, according to the Senators' investigation. Brothers spokesperson called the investigation "complete absurd."

Just two months after the US imposed sanctions on Russian billionaires Arkady  and Boris Rotenberg  in March 2014,  brothers bought 10 paintings for $ 6.8 million at Sotheby’s auction. The Wall Street Journal mentiones this with reference to an investigation conducted by US Senators Rob Portman and Tom Carper for two years.

Senators tracked purchases from private sellers and auction houses in the United States of art objects worth $ 18.4 million by three companies, which, according to them, are linked by the Rotenberg brothers and Arkady's son Igor Rotenberg. Among the paintings bought shortly after the imposition of sanctions were works by Georges Braque and Marc Chagall, the newspaper notes. A few days later, the Rotenbergs renewed their collection again, buying a painting by Rene Magritte for $ 7.5 million, but from a different dealer. In total, after falling under the sanctions, the Rotenbergs were able to transfer or spend $ 91 million, including $ 18.4 million on art, the investigation claims.

The sanctions prohibit companies operating in the United States from having any financial relationship with those who are subject to restrictions. Because of this, Americans caught in deals with the Rotenbergs or others on the sanctions list can face heavy fines or even jail. Billionaires took advantage of the fact that the art world has its own rules related to the disclosure of the identity of buyers, WSJ writes. Collectors don't  always want their names or sources of income to be known. As a result, conditions are created when the auction houses do not establish the identity of the buyer or seller for the transaction. “It is known that auction houses and dealers do not always want to know who the buyer is, because they make a lot of money, but in this case we are talking about the matter of national security, the work of sanctions,” Senator Portman said.

The publication cited the example of a situation when in 2019 Sotheby’s and Christie’s auctions fought for the right to exhibit the painting “Bridge-2” by Lionel Feininger, which, according to senators, belonged to the Rotenbergs. Christie’s won this right, but did not check the seller of the painting, content with an explanation from his representative that the painting belongs to a company from the Marshall Islands. As a result, there was no buyer for the canvas, estimated at $ 5 million, and it was removed from the auction before the auction. This became known after the Senate investigation called representatives of the auction houses.

Despite this attitude of market participants towards identifying the true owners of art objects, representatives of various auction houses told the investigation that they maintain "zero tolerance" for violations of sanctions. At the same time, they claimed that they did not know about the connection of the art dealer Grigory Baltser living in Russia with the Rotenbergs.

Balzer's lawyer said that he had no dealings with billionaires, and that the investigation prevented him from doing his job. A spokesman for the Rotenbergs called the charges "complete absurdity." He said billionaires have never used any tool, including art, to launder money or circumvent sanctions. “All transactions with works of art, made by members of the Rotenberg family or on their behalf, were made openly, strictly for legitimate personal purposes and always on market conditions,” the billionaires spokesman said in a statement.

Author: Anna Dorozhkina

Tags: sanctions Russian oligarchs    

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