Amid bloodshed in the Ukraine following the Russian military’s invasion in the country last week, sweeping economic sanctions targeting oligarchs with ties to the Russian government are being levied. With questions lingering about how businesses of all kinds will be impacted, the auction house Phillips, which is owned by Russian luxury retailer Mercury Group, has said it doesn’t expect sanctions to affect its operations.
Owned by Leonid Friedland and Leonid Strunin, the Moscow-based Mercury Group is the largest luxury retailer in Russia. The holding company runs a chain of luxury stores across the country, including the Moscow department store Tsum. The Russian group has owned Phillips since 2008, when it acquired the company from Simon de Pury for an estimated $60 million. At the time of the major private deal, Russia had recently emerged as a key art market player.
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Friedland and Strunin have not been named among the people whose assets are being frozen by the U.S. and U.K., though even businessmen who are not being hit with sanctions could face difficulties going forward. Still, Phillips said it doesn’t fear financial hardship as a result of the war in Ukraine. “We do not expect the recent sanctions to affect our business,” a spokesperson for the auction house said, adding that Phillips “does not conduct business with any individuals or institutions who are subject to sanctions.”
The U.K. announced sanctions targeting five banks and high net worth Russian oligarchs in Vladimir Putin’s close circle. Among them are Gennady Timchenko, an energy mogul and owner of investment firm Volga Group who has a track record of working to promote Russian heritage abroad through arts and cultural initiatives. Construction and infrastructure magnates, Boris and Igor Rotenberg, who were investigated for circumventing sanctions to buy art in 2020, have also been targeted.
In a statement on Friday, the U.S. Department of the Treasury’s Office of Foreign Assets Control said that it was targeting the two largest banks in Russia, the Public Joint Stock Company Sberbank of Russia and the VTB Bank Public Joint Stock Company. The actions, the department said, impose “severe economic costs that will have both immediate and long-term effects on the Russian economy and financial system” designed to “isolate Russia from international finance and commerce.” The executive order targets roughly 80 percent of all banking assets in Russia.
“We at Phillips unequivocally condemn the invasion of Ukraine. Along with the rest of the art world, we have been shocked and saddened by the tragic events unfolding in the region,” said Stephen Brooks, Phillips CEO, in a statement to ARTnews. “We call for an immediate cessation of all hostilities in the strongest possible terms.”