iii. BALTZER LLP Failed to Provide Anti-money Laundering and Sanctions Compliance Certifications Required by the Agreement with Christie's
As stated above, the agreement between BALTZER LLP and Christie's required BALTZER LLP to certify annually that it conducted customer due diligence and did not suspect its clients were engaged in money laundering.[1] Obtaining that certification, as scheduled and with the proper assertions regarding anti-money laundering, became a challenge for Christie's over the course of the relationship due to a lack of responsiveness by Mr. Omelnitski, despite numerous attempts by Christie's to obtain the certification. As explained below, Christie's later revised the agreement with BALTZER, in part because of Mr. Omelnitski's failure to provide the required compliance certifications. The new agreement required Mr. Baltser to identify all winning bidders to the Christie's Legal Department to perform KYC checks.
2014. Christie's Compliance Counsel emailed Mr. Omelnitski on September 26, 2014 requesting “to refresh [Christie's] due diligence in relation to the BALTZER arrangements, particularly around sanctions screening."[2] She confirmed to the Subcommittee she was referring to the increasing number of sanctions imposed by the United States and the European Union on Russian individuals and entities in response to the annexation of Crimea.[3]
On October 15, 2014, the Compliance Counsel emailed Mr. Omelnitski regarding the certification required in the February 2014 Letter Agreement.[4] She explained that "[g]iven the rapidly evolving sanctions landscape in Russia, we are asking all our business partners to certify that they have complied and will continue to comply with relevant AML regulations including ongoing sanctions screening against . . . EU, UN, OFAC, etc. lists."[5] The Compliance Counsel emailed Mr. Omelnitski on October 31, 2014 to again request the report.[6] Mr. Omelnitski responded and assured her that "we are preparing the report . . . I shall have it for you within a week."[7] On November 22, 2014, Mr. Omelnitski emailed the Compliance Counsel stating, "I am really sorry for [the] delay with the report. I am traveling extensively over the last two months. I shall be ready with it next week. Once again apologies for [the] delay."[8]
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