This week, the ripple effect of the Russian invasion of Ukraine reached the shores of even more industries and countries, as iconic UK auction houses have put the brakes on the sale of Russian art works; the British Government backtracked on sanctions against Roman Abramovich to allow the sale of Chelsea football club under special new conditions; and experts warned that Australia’s anti-money laundering and counter-terrorism financing regime has gaps that make the country vulnerable to dodgy Russian money.
Find out more on these stories below.
Christie’s, Sotheby’s, and Bonham’s join sanctions drive against Russia with art sales ban
This week, the three iconic British auction houses each announced steps to counter the risk of dealing with politically exposed persons and/or dealing in Russian fine art trade with either questionable origins or dubious destinations. The collective move is in response to sanctions imposed by the UK government against various Russian individuals and entities in Britain since the Russian invasion of Ukraine on 24th February 2022.
Although the sales of Russian art work by both Christie’s and Sotheby’s only constitutes about 1% of their annual turnover, which was worth £37.7m in 2021, the move signals tough days ahead for UK dealers and collectors of Russian art, who generally prosper in the annual so-called ‘Russian art week’ in June. The auction houses explained their decisions as follows:
- Christie’s: “While the current sales market for Christie’s in Russia as a whole is relatively small, we have a responsibility to respond to our clients’ needs and to geopolitical events that are out of our control.”
- Sotheby’s: ““We are absolutely rigorous about following the present sanctions and are monitoring closely for any updates to the [sanctions] lists.”
- Bonham’s had not offered reasons for their decision at the time of publication.
The dramatic move in the art world echoes the UK government’s actions, which in turn followed those of the US and EU aimed at people who allegedly support Russia’s president, Vladimir Putin.
Read more on this story at The Art Newspaper.
UK Government to allow the sale of Chelsea FC under special conditions, despite sanctions imposed on Russian owner
As part of the dramatic events that followed the Russian invasion of Ukraine, and the subsequent UK sanctions on Russian billionaire and owner of Chelsea FC, Roman Abramovich, the sale of the club was previously banned but this week saw the UK Government make a U-turn on that decision.
Abramovich, whose assets in Britain are currently frozen, is banned from benefitting financially from the sale. The sale is going ahead finally after an agreement was reached with the UK Government that the proceeds could go to charity or into a frozen bank account.
The BBC reported that the number of confirmed bids is likely between 10 and 15, but as part of the sale's unique conditions, the preferred bidder will require U.K. government approval and will have to prove the source and use of its funds to gain that approval. In addition, the sale will need to be approved by the Premier League's owners and directors’ test.
The football world is on the edge of its seat, as today marks the final day of bidding in the sale of Chelsea Football Club, which is due to wrap up at 9pm BST.
Australia faces being greylisted for weak anti-money laundering controls expose it to illicit Russian cash
Australia is the latest country in which its experts have raised concerns that Australia could be grey-listed for inadequate anti-money laundering controls. Eight years ago, the Australian government gave assurance that it would commit to bringing lawyers, accountants, and real estate agents into the fold of anti-money laundering and counter-terrorism finance laws (AML/CTF).
To date, these professions remain unregulated by AML/CTF laws in Australia, and amid the current widespread global sanctioning of Russian individuals and businesses as a result of the invasion of Ukraine, experts fear that these gaps in Australia’s AML regulations could see it become an easy target for Russian money.
The failure to deliver on the 8-year-old promise is “a neon sign flashing above the continent of Australia saying ‘haven for criminal money laundering’,” says Deborah O’Neill, a Labour politician who has been active in a Senate committee inquiry into the adequacy of Australia’s AML-CTF laws.
Now Australia is in a race against the clock to bring its AML controls up to the international standard laid out by the Financial Action Task Force (FATF), who act as the global money laundering watchdog and keeper of the so-called ‘grey list’. Australian home affairs minister, Karen Andrews, was rumoured to be planning to rush legislation through parliament before upcoming elections in May, but The Guardian reported that this is unlikely as proper industry consultation will be required to invoke the complex changes.
“The government has been clear in condemning the actions of the Russian government and is committed to a strong and effective sanctions regime, including ensuring that ill-gotten gains and other sanctioned wealth is effectively targeted by AUSTRAC,” a spokesperson for Andrews said.
Read more on The Guardian
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