In a bid to evade international sanctions, designated Russian individuals are exploiting art storage facilities, prompting the National Crime Agency (NCA) to issue a stern warning on Tuesday. The NCA cautions that these facilities must remain vigilant against criminals aiding oligarchs subject to Russia sanctions through the art market.
Oligarchs Art Facilities Exploiting : Art Market Vulnerability
Adrian Searle, director of the National Economic Crime Centre at the NCA, emphasized the allure of the art market to criminals due to its potential for immense value transfer. “This is why we need the sector to increase its vigilance and embrace their role as the gatekeeper of the legitimate art market,” Searle stated.
Oligarch Investments and Sanctions
As the value of art continues to surge, high-net-worth individuals are utilizing specialist facilities, some tax-free, to safeguard their pieces within their investment portfolios. However, the imposition of sanctions against oligarchs following Russia’s invasion of Ukraine has heightened the risk of unnoticed caches.
Oligarchs Art Facilities Exploiting : Testing Due Diligence
Criminals are adept at testing due diligence processes by initially engaging in legitimate activities before surreptitiously storing illicit items or transferring assets belonging to sanctioned individuals, warns the NCA.
Red Flags and Anonymized Cases
Vigilance is crucial for detecting changes in client circumstances, ownership transfers, quick sales, or moves out of jurisdiction. The NCA points to shell companies, complex structures, and trusts with unclear ownership as potential warning indicators.
