At Council on Foreign Relations Meeting on Sanctions Strategy, Antiquities Coalition Calls on U.S. Treasury to Close Art Market Loopholes
February 27, 2024
February 2024 marked two years since Russian forces invaded Ukraine, destroying lives, communities, and cultural heritage. During that time, we have also seen the exploitation of heritage and historical propaganda become one of the Kremlin’s most effective weapons for its information warfare program targeting the West, a scenario the AC’s Think Tank warned would happen, as well as the organized plunder of Ukraine’s art and antiquities by invading forces. While priceless to the Ukrainian people, these treasures have the potential to be a valuable commodity to the cash-strapped Russian state, and thus may greatly undermine the U.S.-led sanctions regime. The lack of regulation of the American art market is additionally providing another—now well documented—route for Russia to evade sanctions.
At a recent meeting held by the Council on Foreign Relations (CFR) on February 23, 2024, the U.S. Deputy Treasury Secretary Wally Adeyemo spoke on challenges facing the U.S. sanctions strategy. Tess Davis, Executive Director of the Antiquities Coalition and Term Member of the CFR, had the opportunity to ask the Secretary about a sanctions black hole: the American art market.
“Russia is isolated from the global economy, but there remains an easy backdoor through the $30 billion American art market, which is arguably the largest unregulated market in the world, period. And the U.S. government has proven in great detail how art’s providing a lucrative, and unfortunately untraceable, funding source for blacklisted individuals and entities. We’re talking tens of millions to Putin’s top enablers, the Rotenberg brothers, but also 160 million (dollars) to Hezbollah,” Davis noted. She then asked what Treasury is doing to fight back against these risks.
Adeyemo disclosed how his colleagues at the Office of Foreign Asset Control are focused on the art market and pursuing both wealthy Russian oligarchs and those close to the Kremlin. He also shared details on how the Russian Elites, Proxies, and Oligarchs (REPO) Task Force, which was founded in March of 2022 and is made up of the G7 and other allies, is working to ensure the U.S. and allies can track assets, including art, that may be used to move money around the world.
“Ultimately, the thing that we know is that wealthy Russians have spent decades learning to evade not only our sanctions, but Russian taxes, frankly. So they are very good at this. But what we—by setting up the task force—the Repo Task Force, it’s put us in a position where we’re able to share more information not only in the United States, not only with the U.K., but with a number of our allies and partners to be able to go after their ability to move wealth in ways like this,” he added.
The Antiquities Coalition thanks the CFR and U.S. Deputy Treasury Secretary Wally Adeyemo for facilitating this important conversation. While there is much more to be done, open collaboration and consideration of all markets will ensure maximum effectiveness of the U.S. sanctions strategy.
Watch the full session here and learn more about how the Antiquities Coalition is encouraging responsible art markets and trade practices.