RECOMMENDATIONS
(1) Congress should amend the Bank Secrecy Act to add businesses handling transactions involving high-value art. The art industry is currently not subject to AML requirements under the BSA. The European Union recently required businesses handling art transactions valued at €10,000 or more to comply with AML laws, including verification of the identity of the seller, buyer, and UBO of the art.
(2) Congress should require the Treasury Department to collect beneficial ownership information for companies formed or registered to do business in the United States. This information should be available to law enforcement for investigatory purposes. Beneficial owner information maintained by the Treasury Department should include appropriate privacy and security protections.
(3) When imposing sanctions on an individual, the Treasury Department should consider routinely imposing sanctions on the individual's immediate family members. While the U.S. sanctioned Arkady and Boris Rotenberg in March 2014, for example, it did not sanction the brothers' children until later dates. The Treasury Department stated it imposed sanctions on Igor Rotenberg in 2018 because he "acquired significant assets from his father, Arkady Rotenberg, after OFAC designated [Arkady] in March 2014." This allowed Arkady and Boris Rotenberg to evade U.S. sanctions by transferring their interests in companies to their children while maintaining operational control.
(4) The Treasury Department should implement and announce sanctions concurrently. While President Obama announced sanctions for Russia's annexation of Crimea on March 16, 2014, the Treasury Department did not officially impose sanctions on specific individuals and entities until March 20, 2014. During this four-day window, millions of dollars were transferred through the United States and back to Russia. The Treasury Department should take necessary actions to both announce and implement sanctions to avoid creating a window of opportunity for individuals to evade sanctions.
(5) The Treasury Department should lower or remove the ownership threshold for blocking companies owned by sanctioned individuals. According to guidance by the Treasury Department, a company is blocked if it is majority owned by a sanctioned individual. If the sanctioned individual has a minority ownership in a company, that company is not blocked, even if the sanctioned individual owns 49 percent of the company.
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