Russian oligarchs will be able to exploit legal loopholes in the UK art market to evade sanctions and launder money, experts say, despite Boris Johnson’s claim there will be ‘nowhere to hide of a Kremlin-linked wealth crackdown.

It comes as Labor MP Chris Bryant said ‘valuable assets’ were likely to be traded by supporters of Vladimir Putin, and called Christie’s and Sotheby’s – the main auction houses – to refuse to manage them.

However, senior advisers said the ultimate “beneficiary” owner of priceless artworks may still be hidden, helped by the global scale of the market and growing online presence.

Kremlin-linked cash could also be laundered through collectibles such as stamps, wine and the burgeoning non-fungible token (NFT) market, which are not included in UK money laundering regulations. money dating from 2017.

Meanwhile, there have been questions about whether Sotheby’s and Christie’s will keep their offices in Moscow, with calls for a boycott from Phillips, a prominent auctioneer owned by a Russian luxury goods company.

The tremors of Ukraine’s invasion have already rippled through the art market, with Christie’s citing “the current global situation” for the recent postponement of an auction of rare prequel art books. Russian guards, and a former CEO of rival auction house Bonhams leading calls for a boycott of Phillips.

Phillips, who is owned by Russian group Mercury, told the Guardian it was “business as usual” and his bidding was going according to plan. However, the company has come under fire for carrying out a £30million London sale last week of works by artists including David Hockney, Claude Monet and – a favorite among wealthy Russians – Francis Bacon.

While the company has announced that it will donate all of the net proceeds from the auction – £5.8m – to the Ukrainian Red Cross – it continues to be disputed.

Phillips is listed by Companies House as having two owners “with significant control” – Leonid Fridlyand and Leonid Strunin – Russians who give their address as the company’s registered office in Mayfair and their countries of residence as Monaco and Cyprus respectively. The pair have yet to comment, but the company’s CEO, Stephen Brooks, said he unequivocally condemns the invasion of Ukraine and “calls for an immediate cessation of all hostilities in the strongest possible terms.” strongest possible”.

Sotheby’s, Phillips, Christie’s and other companies emphasize that they comply with all anti-money laundering and “know your customer” obligations, exercising due diligence to ensure that people and sanctioned institutions cannot conduct business through their auction houses.

In response to Bryant’s comments, Sotheby’s said it conducts its business in strict compliance with all applicable laws and regulations, including global sanctions. He was “absolutely rigorous” about adhering to current sanctions and closely monitoring any updates to the lists. Its Moscow office is currently closed to the public.

Christie’s, which said its Moscow office “currently” remains open, said it took immediate action through its customer identification and screening processes. He said he does not authorize persons or companies named on applicable sanctions lists to transact with him. “Politically exposed persons” were also subject to enhanced due diligence.

However, Professor Louise Shelley, director of Terrorism, Transnational Crime and Corruption Center at George Mason University in the US, said the global nature of the market and the “gaping holes” in US safeguards made London very vulnerable.

“A lot of buyers in the UK market are in the US, a jurisdiction where we just don’t do enough. You can ask someone to represent a company that can be protected on many fronts and no one won’t know who’s behind it,” she said.

“There’s clearly a lot of desperate movement of all kinds of commodities and resources through investment vehicles right now, but art markets are the perfect way to move wealth and hide ownership. We have a gaping hole in our laws here in the United States right now which ultimately means it’s possible to buy art in other jurisdictions quite easily The oligarchs and their proxies would be busy to exploit any gaping holes they could find.

London-based experts said the big auction houses had started devoting more resources and time to due diligence since the introduction of money laundering regulations in 2017, but smaller businesses might have trouble.

“It has become more difficult to hide the identity of the ultimate beneficial owner, but you can do a number of things, like structure your affairs so that you have candidates here and there. Or you can just lie,” said one. “If someone wants to find a way to hide the ultimate beneficial owner, they will always find a way.”

Right now, sanctioned oligarchs and others connected to Putin’s regime might look to the art market both as a way to monetize the art they sit on – albeit taking a knock on price – or as a way to put money into a mobile investment that can also be stored physically offshore inconspicuously.

Brexit, which has made it harder to bring art into the UK, means the second scenario is likely to be more appealing.

Other experts have pointed to more glaring flaws in the 2017 legislation and shortcomings with respect to its limited definitions of what s.

“Think of collectibles that are not affected by these regulations. If I were inclined to use art to move dirty money, I would think of things like stamps, vehicles and other expensive kits. out of that range,” one said.

HMRC has been approached for comment.