René Magritte, one of Belgium’s most famous artists, was a leading member of the 1920s movement called surrealism, which sought revolution against the constraints of the rational mind. When describing his paintings, Magritte said they “evoke mystery” and strived to ask beholders: “What does that mean? It does not mean anything, because mystery means nothing, it is unknowable.” I sometimes feel as if I am looking at a Magritte painting when examining Russians’ ability – in plain sight and amid much detailed reporting – to evade western sanctions policies.
Arkady Rotenberg, worth a reported $3.5bn (£2.9bn), is a childhood friend of Vladimir Putin. He used to be the Russian president’s judo sparring partner, before progressing to become a rich businessman. Rotenberg has publicly claimed to own the $1bn so-called “Putin’s Palace”, a huge Italianate complex on the Black Sea coast said to be secretly owned by the Russian president.
In March 2014, Rotenberg was one of the first Russians to be hit with sanctions after Russia unlawfully invaded Ukraine and annexed Crimea. Yet two months after the restrictions were imposed, a complex web of shell companies linked to Rotenberg and his family was used to buy Magritte’s La Poitrine for $7.5m at a Sotheby’s auction in New York.
According to a US Senate investigation, the painting was shipped to a storage facility in Germany called Hasenkamp where it rested for five years. In August 2019, when the committee started investigating the purchase, the artwork was whisked off to Moscow. In its report, the congressional committee said the lack of banking regulations over art transactions was “shocking” and created an “environment ripe for laundering money and evading sanctions”. It directed sharp criticism at auction houses and art dealers for doing little to screen or stop sanctioned people from trading art.
Since the full-scale invasion of Ukraine last year, some additional measures have been taken. The auction houses Christie’s, Sotheby’s and Bonhams cancelled sales of Russian art in London in response to western sanctions on the Kremlin and its wealthy cronies. But so much more could be done to tackle a notoriously opaque market which has been long favoured by Russian oligarchs looking to shift money around. After all, paintings and sculptures are easier to transport and hide than yachts and private jets, many of which have been seized over the last year. Art also provides oligarchs with a mechanism to launder their reputations – weaving themselves into such a gilded world provides cultural, social and political standing.
Leonid Mikhelson is the major shareholder in Novatek, a Russian gas company, and has done business with Gennady Timchenko, an oligarch who has been close to the Russian president for decades. He has been sanctioned since 2014. Yet during the same time period, Mikhelson’s foundation has also staged four shows between 2014 and 2018 at the Whitechapel Gallery.
Western allies of Ukraine seeking to put pressure on the Kremlin over the war crimes extravaganza unleashed on Ukraine could ban sanctioned Russians from their prestigious art markets, including auction houses. More stringent regulations about beneficial ownership could be introduced, which would help to clean up the real estate market as well as the art world. An international taskforce should be established to recover priceless works of art looted from Ukrainian galleries and museums by Russian occupiers. And western authorities should confiscate pieces bought by sanctioned individuals and their proxies. The money should go towards the reconstruction of Ukraine.
The UK will not have to look far for such items. Two months after the war started last year, its authorities could have made a real statement. The Victoria and Albert Museum hosted a blockbuster Fabergé in London: Romance to Revolution exhibition displaying objet d’arts that the Russian jeweller sold to the British royal family and aristocracy at the beginning of the last century. In prized place was the Rothschild Fabergé clock egg from 1902. The Rothschild egg had been bought at Christie’s in London in 2007 for £9m by Russian businessman Alexander Ivanov. It was transferred to the V&A exhibition by Ivanov’s Hermitage Museum in St Petersburg after receiving assurances from the UK that it would be exempt from seizure by the courts.
The egg was eventually returned to Russia months after Putin ordered his troops into a conflict in Ukraine that is increasingly defined by the deliberate targeting of civilians – in complete breach of all international laws.
Last week, the international criminal court in The Hague indicted Putin for the mass abduction of Ukrainian children and issued a warrant for his arrest. Given the current situation, it is unlikely that Putin will ever risk visiting a country that would honour the arrest warrant.
But another measure might have been taken to show the Russian president that the west means business. It is documented that some time after Ivanov bought the Rothschild Fabergé clock egg, he surprisingly decided to give it away. The ownership was transferred in 2015 to a Russian individual who was hit by UK, EU and US sanctions last year as Russian tanks rolled into Ukraine. His name is Vladimir Putin.
• This article was amended on 28 March 2023 to better reflect some attribution.
Vladyslav Vlasiuk is a sanctions expert working in the Ukrainian presidential office
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