According to sanctions experts, this shifting of control is a way to ensure that the art collection cannot be seized if Abramovich is placed on a sanctions list. Under sanctions rules of the European Union, the United Kingdom and the United States, a sanctioned person’s entire assets can be frozen if they are more than 50 percent owned. Tipping the balance in Zhukova’s favor, even if only to 51 percent of the shares, is “very useful” to circumvent sanctions rules, according to experts.
“The 50 percent rule works a little differently in each jurisdiction,” Tom Keatinge, director of the British Center for Financial Crime & Security Studies at the Royal United Services Institute, told The Guardian. “But with any variation of the rules, it would be attractive for someone who is likely to be placed on a sanctions list to reduce the share in a trust. This happened a lot in the run-up to the war, in the hope of keeping assets out of the reach of authorities.”
A month after the transaction surrounding the art collection, Abramovich was indeed placed on the European and British sanctions lists. According to the European Commission, Abramovich has close ties to President Vladimir Putin and “privileged access” to the president. Abramovich’s assets were subsequently frozen, including his football club Chelsea FC. But that has not happened until now with his art collection, which is an important part of Western cultural heritage.
There are no indications that Zhukova has taken steps to avoid sanctions. The art is officially owned by a trust, not her own, and she could not make decisions on behalf of the Cyprus-based trust. As far as we know, no works of art from the collection have been sold or transferred since February 2022.
Abramovich did not respond to questions from The Guardian. Zhukova declined to comment. She has previously denounced the invasion of Ukraine in public statements.