The art dealer's livelihood depends on protecting client information.[1] Should Sotheby's ask a dealer to whom they may intend to resell the artwork following the dealer's transaction with Sotheby's, according to the Chief Compliance Counsel, the dealer would respond, "Are you kidding me? I'm not telling you."[2]
Ultimately, according to the Chief Compliance Counsel, whether to continue and execute a transaction with a dealer who may sell to a subsequent buyer was a judgment call.[3] If the dealer is someone Sotheby's knows; established in the art world; someone Sotheby's has transacted with many times in the past; and is not under investigation, she said Sotheby's is likely to complete the transaction.[4] If the dealer does not meet those criteria, she said Sotheby's would refuse to move forward: "we'll say there's too much smoke here, and we've done that."[5]
The Chief Compliance Counsel stated that in some instances, the Compliance Department offers its counterparties the option of telling Sotheby's Compliance personnel who their principal is, which enhances Sotheby's ability to perform its due diligence and allows counterparties to protect their commercially proprietary information. Sotheby's has been successful in this way in encouraging intermediaries to divulge their clients' identities without risk of losing their business portfolio.[6] She said that Sotheby's "has a lot of success with that," yet some intermediaries still refuse to disclose their principal due to a lack of trust.[7] Sometimes intermediaries request before disclosing the identity of their principal a non-disclosure agreement ("NDA") to provide comfort that Sotheby's would not share the information outside of its Compliance Department.[8]
The Chief Compliance Counsel also discussed Sotheby's sanctions compliance policies.[9] She explained that Sotheby's runs its client list through World-Check on a daily basis to identify possible sanctions violations.[10] This check includes "all the major sanctions from around the world."[11] Any hits on sanctioned entities get flagged to the Compliance Department.[12] For private sales, Sotheby's runs the names for both the buyer and the seller through World-Check to determine if either are sanctioned.[13] World-Check is a database used by financial institutions to
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