THEO VAN GOGH WATCH: HOW PUTINS OLIGARCH SAVES HIS BILLIONS ON INTERNATIONAL FLOOR / ABRAMOVICH

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Welcome to ICIJ’s weekly newsletter! 27-9-23

Splashing cash on valuable art is one way to show off taste and cultural cachet — but it can also be a means for the rich to hide and build wealth away from the public eye. Investigations by ICIJ and others have often highlighted the symbiotic relationship between the discreet art world and the offshore financial system.

Last week, ICIJ partners revealed how Russian billionaire Roman Abramovich and his ex-wife, U.S.-based art collector Dasha Zhukova, amassed an extraordinary stockpile of modern art over nearly a decade, including works by Russian, European and American masters, and acclaimed British contemporary artists.

“You could fill a museum with it,” one art expert told The Guardian of the collection, which was valued at $963 million in 2018.

Details of the collection — and the secretive trust structure controlling it — were uncovered in a cache of leaked documents from the Cyprus-based financial services firm MeritServus, which was sanctioned by the U.K. government in April after its close ties to Abramovich and other oligarchs were widely reported, including by ICIJ.

The files show a shake-up of the trust arrangements weeks before Russia’s invasion of Ukraine as the threat of Western sanctions loomed over President Vladimir Putin’s inner circle.

On Feb. 4, 2022, Ermis Trust Settlement — the Cyprus-based trust controlling the offshore company that owns the art collection — was amended by its trustees to make Zhukova “irrevocably entitled to 51%” of the trust’s distributions. The former couple previously each held a 50% beneficial interest in the trust.

Abramovich, who has long downplayed his connection to Putin, was sanctioned by the United Kingdom and the European Union the following month, leading to his assets being frozen and forcing him to sell the Chelsea football club.

While there is no suggestion Zhukova, who is not subject to sanctions and has publicly condemned the war, was aware of the offshore moves, the timing has raised red flags for sanctions experts — under EU, U.K. and U.S. rules, any asset more than 50% owned by a sanctioned individual can be frozen.

Now, more than a year and a half into the war, the revelations about the scale and quality of Abramovich’s collection have also led to concerns over the whereabouts of hundreds of cultural treasures and when the public might again have access to them. Read more here.

MONEY LAUNDERING EVOLVES
A new report by Europol has revealed how the rise of digital banks has created new pathways for criminals to move dirty money and fund their operations, as authorities struggle to keep up with evolving technology. Nearly 70% of criminal networks operating in the EU rely on money laundering, the report found, degrading the region’s financial stability and impeding its economic growth.

Thanks for reading!

Joanna Robin
ICIJ’s digital editor