Despite not having a legal obligation to implement AML programs under the BSA, the Subcommittee found that the four biggest art auction houses described above all have voluntary AML programs in place. In addition, all four have sanctions compliance programs. This section details the voluntary AML and sanctions programs in place at: (1) Sotheby's; (2) Christie's; (3) Phillips; and (4) Bonhams. The Subcommittee also interviewed one private art dealer who admitted they operated with no AML or sanctions compliance programs in effect.
1. Sotheby's
Sotheby's informed the Subcommittee that it has a compliance department that oversees all issues relating to money laundering, terrorist financing, tax evasion, sanctions policies, and related litigation.[1]
Worldwide Policy on Money Laundering, Terrorist Financing and Tax Evasion. Sotheby's has a detailed, written set of rules to combat money laundering, terrorist financing, and tax evasion. The current policy document (the "2018 AML Policy") "applies to all members of the Board of Directors, employees, consultants, independent contractors, and others providing services to Sotheby's."[2] The document also states that "Sotheby's is committed to strict compliance with all applicable laws regarding anti-money laundering, combatting terrorist financing, and tax evasion."[3] It further states that "if you have any concerns about the activity of a client or legality of a transaction in which Sotheby's is involved you must raise those concerns with the Compliance Department immediately."[4]
The 2018 AML Policy explains that "the single most effective tool in combatting money laundering or terrorist financing is to have adequate knowledge about our clients. We must know who our clients are regardless of whether they are new or existing clients, occasional or regular purchasers or consignors and the volume or value of the transaction activity."[5] The 2018 AML Policy explains that "for all clients, new or existing, we must: (a) know the true identity of the person or entity who owns the property or funds in question; and (b) understand the source of the client's funds."[6] The 2018 AML Policy also outlines how to deal with an agent acting on behalf of an undisclosed principal. The document states, in pertinent part:
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