Super-rich supporters of Putin are targeted by sanctions in reaction to the war. But that's not necessarily harming their business on the art market. Why not?
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Their names are Gennady Timchenko, Vladimir Potanin, Pyotr Olegovich Aven or Roman Abramovich: These Russian oligarchs, considered friends of Russian President Vladimir Putin, are on the West's list of sanctions as a reaction to Russia's war on Ukraine.
Among the world's approximately 2,200 billionaires, 4% of them are Russian, while 2% of the super-rich with assets of more than $50 million in 2020 are also from the country, according to the latest art market report by Art Basel and the UBS bank.
Having become rich after the collapse of the Soviet Union in the 1990s, they were soon welcome guests at the art fairs in Basel, Tokyo and New York. Auction houses also prized them as potential buyers, knowing that expensive trophy art was a way for these millionaires to display their wealth.
Oligarchs withdraw from museum boards of trustees
Now, some of their foreign assets are frozen. In London, for example, FC Chelsea owner Roman Abramovich had to relinquish control of his club.
Olegovich Aven, head of the Alfa Group, Russia's largest commercial bank, lost his place on the board of London's Royal Academy. The institution rejected a donation from Aven for the Academy's ongoing Francis Bacon exhibition.
Vladimir Potanin stepped down from the Guggenheim Museum's board of trustees. The privately financed New York city museum will have to find a way to compensate for the loss of the major benefactor's contributions.
With their millions, Russia's oligarchs have gained influence in the art world and shaped the global art market for years.
For example, Abramovich wrote art market history by buying in 2008, a few months before Lehman Brothers went bankrupt, a triptych by Francis Bacon at Sotheby's for the then record price of $86.3 million (€78.3 million) — also acquiring during that same period a painting by Lucian Freud at Christie's for $33.6 million dollars.
In 2006, Boris Ivanishvili, who gave up his Russian citizenship in 2011, bought Pablo Picasso's "Dora Maar au Chat" at Sotheby's for $95.2 million.
Most expensive artworks sold at auction
Da Vinci's "Salvator Mundi" holds the record for the most expensive work of art to go under the hammer. Munch and Van Gogh also make the list, and a Monet painting has broken the record for auctioned impressionist art.
Image: picture alliance/ZUMAPRESS/R.Tang
Da Vinci's 'Salvator Mundi': $450.3 million
Created around 1500, this painting of Christ attributed to Leonardo da Vinci is one of the master's 20 still existing paintings. In 1958 "Salvator Mundi" was sold for just $60 because it was thought to be a copy. But it fetched more than four times Christie's pre-sale estimate on November 15, 2017, when it was sold for over $450 million (€382 million) — setting a world record for auctioned art.
Image: picture alliance/ZUMAPRESS/R.Tang
Picasso's 'Women of Algiers': $179.4 million
From 1954-55, Pablo Picasso did a series of 15 paintings inspired by Delacroix's "Les Femmes d'Alger," with versions named "A" through "O." He started them after the death of Henry Matisse, as a tribute to his friend and artistic rival. "Version O" broke the world record for an auction sale, selling for $179.4 million (167.1 million euros) at Christie's in May 2015.
Image: Reuters
Modigliani's 'Reclining Nude': $170.4 million
At a Christie's auction held in November 2015, seven potential buyers spent nine frantic minutes bidding on this painting. It was finally snapped by a telephone bidder from China. The nude, painted in 1917-18, provoked a scandal at its first exhibition in Paris. The police shut down the art show after a crowd gathered outside the window.
Image: picture-alliance/AP Photo
Modigliani's 'Nude lying on her left side': $157.2 million
Modigliani's work "Nu couché (sur le côté gauche)" caused such a controversy when it was first shown in Paris in 1917 that the police had to close the exhibition. The Italian artist's oil painting became the most expensive artwork to have been sold at New York auction house Sotheby's in May 2018.
Image: Reuters/Venus Wu
Klimt's 'The Woman in Gold': $135 million
This 1907 painting by Gustav Klimt is considered one of the most elaborate and representative of his "golden phase." In 2006, it was sold through a private sale brokered by Christie's for a record sum for a painting, $135 million. That same year, Jackson Pollock's classic drip painting "No. 5 1948" broke that record, obtaining $140 million through another private sale.
Van Gogh's 'Portrait of Dr. Gachet': $149.7 million
Van Gogh allegedly said of the homeopathic doctor Dr. Gachet, whom he painted here in 1890, that "he was sicker than I am." The plant is a foxglove, which is used to make the drug digitalis. In 1990, the work was auctioned off to Ryoei Saito, Japan's second-largest paper manufacturer, for $82.5 million, making it the world's priciest painting at the time (the price above has been adjusted).
Image: AP
Bacon's 'Three Studies of Lucian Freud': $142.4 million
This 1969 triptych documents Francis Bacon's friendship and rivalry with fellow painter Lucian Freud. At the time it was sold, in November 2013, it obtained the highest price for a work of art at an auction, until Picasso - and now Modigliani - surpassed that record in 2015.
Image: picture-alliance/dpa
Renoir's 'Dance at Moulin de la Galette': $141.7 million
This 1876 work by Impressionist master Renoir depicts a dance venue for high society on the outskirts of Paris, the Moulin de la Galette. One of Renoir's most famous works, it exudes the joie de vivre that is characteristic of his style. In 1990, the work was purchased for $78.1 million (adjusted price above) by Japanese buyer Ryoei Saito, along with van Gogh's "Portrait of Dr. Gachet."
Image: picture-alliance/dpa
Picasso's 'Boy with a Pipe': $130.7 million
This portrait of an adolescent holding a pipe and wearing a garland of flowers in his hair was created during the Spanish master's "Rose Period" in 1905. Just a little under a century later, the painting fetched an impressive sum of $104.2 million at a Sotheby's auction in 2004 (price adjusted above).
Image: picture-alliance/dpa
Munch's 'The Scream': $119.9 million
This agonizing character painted by Edvard Munch is one of the most iconic paintings in the world. The Expressionist artist had actually made four versions of it: Three are in Norwegian museums, and the fourth one was sold for the screeching price of $119.9 million in May 2012 at Sotheby's, which would be adjusted to $130.7 million today.
Image: picture-alliance/dpa
Picasso's 'Young Girl with a Flower Basket': $115 million
Picasso is well represented among the highest earning painters. His 1905 masterpiece "Fillette a la corbeille fleurie" ("Young Girl with a Flower Basket") was sold – along with two other Rose Period paintings – by the artist himself to writer Gertrude Stein in a sale that helped launch his career. The work, which was later part of David and Peggy Rockefeller's collection, sold for $115 million.
Image: picture-alliance/dpa/J. Schmitt-Tegge
Monet's 'Meules': $110.7 million
The French painter Claude Monet created multiple landscape series that depict the same subject in different types of light and seasons, showing off his ability to capture atmosphere. The painting "Meules" (1890), from his "Haystacks" series, fetched $110.7 million (€98 million) at a Soethby's auction — the record for a Monet and the first impressionist painting to cross the $100-million threshold.
Image: picture-alliance/AP Photo/Sotheby's
Picasso's 'Nude, Green Leaves and Bust': $106.5 million
Inspired by his mistress Marie-Thérèse Walther, Picasso created this painting in a single day in 1932. If you add the eight minutes and six seconds it took for the auction record bid at Christie's in May 2010, it still appears to be well-invested time. Its price could be adjusted to $115.7 million today.
Image: picture-alliance/dpa
Botticelli's 'Young Man Holding a Roundel': $92.2 million
Sandro Botticelli's masterpiece was sold at auction at Sotheby's in January 2021 for $92.2 million. The Italian Renaissance master had never fetched so much at auctions before. Prior to the sale, the work had been estimated at about $60 million.
Image: AFP/ C. Ord
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The London auction houses have not revealed how many of their recent March sales landed in Russian hands. But it remains clear that extremely rich Russians possess considerable assets from the art market.
Most of them are likely kept outside of Russia, preferably in bonded warehouses in Switzerland, Liechtenstein or Luxembourg, for example. "What is kept there is a great secret," notes German daily Frankfurter Allgemeine Zeitung (FAZ), "like so many things in the art business, which is characterized by discretion and a lack of transparency."
US Congress disclosed art market practices
Despite sanctions, it remains possible to move millions on the art market, as a report by the American Congress revealed in 2020.
Resourceful oligarchs have been using shell companies to do this, conducting offshore transactions or hiding behind an intermediate buyer.
The arts industry, according to the US report, is the "largest unregulated market in the United States."
The legislators there, but also in Europe, have meanwhile tightened their rules to prevent businesses from being used by criminal elements for money laundering.
Since then, new "Know Your Customer" (KYC) regulations have applied, requiring dealers to check the identity of their clients.
In addition to existing client identity checks, the KYC checklists of auction houses such as Christie's, Sotheby's and Phillips now require them to identify Russian clients and crosscheck them with the names of those who are targeted by sanctions.
Sotheby's, which, like Christie's and Phillips, has an office in Moscow, has stated that they "are closely following developments in connection with the sanctions lists and will comply with all applicable regulations." Christie's president, Dirk Boll, has assured they were also abiding by the guidelines.
It is probably in the interest of the auction houses, as they would otherwise face a loss of reputation or penalties.
Being Russian-owned, the auction house Phillips has faced particular criticism; amid calls for boycotts, it has been attempted to polish its image by donating the full net proceeds from its March London sales, $7.7 million, to the Ukrainian Red Cross.
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Sanctions not an obstacle to art deals
Still, there have been past cases demonstrating how sanctions can be dodged.
Sanctions were already placed on oligarch brothers Arkady and Boris Rotenberg, considered close confidants of Vladimir Putin, in 2014, following the Russian occupation of Crimea.
But this did not detract them from trading artworks, as the "Panama Papers" revealed in 2017: They sold Magritte's painting "La Poitrine" for $7.5 million, as the trade journal The Art Newspaper recently recalled.
The international art market's ongoing gains from Russian oligarchs, despite all the sanctions, can hardly be estimated. The documentation of art deals in auctions and in galleries is too incomplete, especially in discrete private sales.
Nevertheless, the art world is likely to follow whether recognizable "trophy art" from oligarch owners will come onto the market at forthcoming auctions.
Meanwhile, amid the cultural backlash against Russia's invasion of Ukraine, some events are being canceled altogether, with Sotheby's and Christie's announcing on March 16 that they would not hold their upcoming London auctions of Russian art.
Cultural backlash against Russia's invasion of Ukraine
From the Eurovision Song Contest to Disney and the Cannes Film Festival, the cultural sphere is reacting to the invasion of Ukraine. Russian artists critical of their government are also canceling performances.
Image: Matt Stroshane/Walt Disney World via AP/picture alliance
Disney to suspend all business in Russia
Initially, Disney announced it would no longer release films in Russian cinemas. Now the corporation is halting all its activities, from its TV channels, including TV content marketing, to licensing and cruises. In a statement, Disney said it is taking the steps in light of "the relentless assault on Ukraine and the escalating humanitarian crisis."
Image: Matt Stroshane/Walt Disney World via AP/picture alliance
Cannes bans Russian delegates
The Cannes Film Festival announced on March 1 that it would "not welcome official Russian delegations" or people linked to the country's government. A number of film festivals are reacting similarly, including Glasgow and Stockholm. Locarno has announced it would not join a boycott, whereas Venice will offer free screenings of a film about the 2014 conflict in the Donbas region.
Image: REUTERS
Russia barred from Eurovision Song Contest
The European Broadcasting Union (EBU), which organizes the song contest, stated on February 25 that "in light of the unprecedented crisis in Ukraine, the inclusion of a Russian entry in this year's Contest would bring the competition into disrepute." Meanwhile, Ukraine's folk rap Kalush Orchestra (photo) have emerged as the act with the best odds to win.
Image: Suspilne
Opera houses halt Bolshoi collaborations
London's Royal Opera House has canceled the summer season of Moscow's Bolshoi Ballet. The Metropolitan Opera's staging of "Lohengrin," co-produced with the Bolshoi, will also be affected by the New York opera house's decision to cut ties with Russian state-supported artists. Until now a Putin loyalist, Bolshoi director Vladimir Urin was however among the signatories of a letter opposed to the war.
Many Russian artists have condemned the war. But despite an ultimatum from the Munich Philharmonic to publicly position himself, star conductor Valery Gergiev remained silent on the war led by Putin, his friend since 1992. On March 1, the German orchestra fired its acclaimed chief conductor, and the globe-trotting maestro's numerous concerts in Europe and the US have also been canceled.
Image: Danil Aikin/ITRA-TASS /imago images
Soprano Anna Netrebko pulled out of operas
The Metropolitan Opera in New York and the Berlin State Opera have ended their collaboration with Russian opera star Anna Netrebko, who was asked to "repudiate her public support for Vladimir Putin," but declined to do so. She is "one of the greatest singers in Met history," said the opera house's director Peter Gelb, "but with Putin killing innocent victims in Ukraine, there was no way forward."
Image: Roman Vondrous/CTK/imago images
Museums cut ties with Russian oligarchs
Amid calls for cultural institutions to remove allies of Putin from their boards, museums are cutting ties with major Russian benefactors. Billionaire Vladimir Potanin has stepped down from the board of trustees of the Guggenheim Museum (photo), according to The New York Times, while Artnet reports that banking magnate Petr Aven has left his position as a trustee of the Royal Academy in London.
Image: Han Fang/Xinhua/imago images
Hermitage Amsterdam break ties with Saint Petersburg
Amsterdam houses the largest satellite of Saint Petersburg's storied Hermitage Museum. It had until now never commented on Putin's political actions, but "with the invasion of the Russian army in Ukraine, a border has been crossed. War destroys everything. Even 30 years of collaboration," the Dutch museum stated on March 3. They are also closing their current exhibition, "Russian Avant-Garde."
Image: Richard Wareham/imago images
Russian artists pull out of Venice Biennale
It is not always the organizers of events who are boycotting Russian acts. At the Venice Biennale, which starts on April 23, it is rather the artists and curator of the Russian exhibition who have resigned, stating on Instagram that "the Russian Pavilion will remain closed" in protest of civilians being killed by missiles and Russian protesters being silenced.
Image: Photoshot/picture alliance
Hollywood delays films releases in Russia
Following Disney's lead, Warner Bros, Sony, Paramount Pictures and Universal have all decided to halt the release of films in Russian cinemas. "The Batman" (photo) was to be released in the country on March 4. Other upcoming titles affected by the decision include Disney's Pixar animated film "Turning Red," Paramount's "The Lost City" and "Sonic the Hedgehog 2" and the Marvel film "Morbius."
Image: Jonathan Olley/DC Comics /Warner Bors/dpa/picture alliance
Concerts canceled in Russia
"Ukraine, we stand with you, and with all those in Russia who oppose this brutal act," said Nick Cave. He has canceled his Russian tour dates planned for the summer, just like many other groups, including Franz Ferdinand, The Killers, Iggy Pop and Green Day. Popular Russian rapper Oxxxymiron has also canceled his shows in the country, calling for an anti-war movement.