London, Moscow, Baden-Baden … In pursuit of Fabergé eggs

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This article by Konstantin Manenkov was originally published in French in Le Courier de Russie, the English translation by Paul Gilbert

This is an unprecedented affair: billionaire Alexander Ivanov accuses the UK of stealing and damaging rare pieces from his Fabergé egg collection. British customs confiscated them from the oligarch in 2013, during a tax evasion investigation. Today the collector demands from London two billion dollars in damages.

February 2013. The 50-year-old billionaire Alexander Ivanov returns to Moscow after an auction held in London, where he acquired jewelry in the amount of £ 1.2 million (approximately EUR 1.36 million). He passes through customs at London Heathrow Airport without encountering difficulties, although the agents pay particular attention to the over-sized works of art carried by the collector. Shortly before takeoff, the Border Police arrested Sergei Avtonochkin, director of the Fabergé Museum in Baden-Baden (property of Mr Ivanov in Germany) who, on that day, traveled with the billionaire. Avtonochkin was charged with breach of UK taxation. At the same time, Border Police seized some of the items bought by the two men. The value of confiscated coins is estimated at more than £ 600,000 (€ 680,000). Mr. Ivanov eventually gets permission to board his plane but his purchases remain in the UK.

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ALEXANDER IVANOV. CREDITS: FABERGÉ MUSEUM

December 2014: the billionaire learns that British investigators have searched his museum.

Back in Russia, for many months and despite the efforts of his lawyers, the collector gets no clear answer from the British authorities about the fate of his collection. Worse: at the end of December 2014, the billionaire learns that British investigators, with an international mandate, have searched his Fabergé Museum. Mr Ivanov then discovers that legal proceedings have been opened against him in London. The UK tax office accuses him of not paying VAT for rare items he has acquired in several auctions, including that of February 2013.

British law does not subject works of art to VAT when, immediately after their acquisition, they leave the territory of the European Union. This is not the case of the collection of Mr Ivanov, whose pieces were transported from London to Baden-Baden and therefore remained in the European Union. In addition, English investigators have doubts about the exact location of some of the most valuable pieces of the collectors. They pose the question for the famous egg Rothschild Fabergé gold …

A gift questioned

The translucent pink egg, made in 1902 for the Rothschild family, is one of the most beautiful pieces produced by Peter-Karl Fabergé. It is decorated with a clock and encloses an automaton – a double feature that can be found only in two other pieces from the workshops of the famous jeweler, supplier of the Russian imperial court.

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THE IMPERIAL EGG ROTHSCHILD FABERGÉ. CREDITS: CHRISTIES.COM

The cock encrusted with diamonds sheltered in the egg is animated to mark the passage of the hours, rising by flapping wings, stirring the head and opening its beak to sing.

Alexander Ivanov bought it in November 2007, for £ 9 million (€ 10.2 million, a record at the time), at an auction at Christie’s.

The egg was first offered to President Vladimir Putin, who then donates it to the Hermitage.

Seven years later, in December 2014, shortly before his museum in Baden-Baden was searched, Ivanov offered the precious object to the State Hermitage Museum in St. Petersburg, for the celebration of its 250th anniversary. The delivery of the gift does not lack solemnity since the egg is, at first, offered to President Vladimir Putin, who then donated it to the Hermitage.

“When I bought it [the Fabergé egg, ed ], I knew it would end up in Russia,” Ivanov said in an interview with Moskovski Komsomolets .

The British detectives, however, suspect Mr Ivanov of silencing an important detail: he would obviously have brought the Rothschild egg to Russia only in 2014; previously it had to be in the Baden-Baden museum. In other words, he had not left the European Union. As a result, by not paying VAT, the collector broke UK law. Alexander Ivanov disputes this version of the facts and assures that, during all this time, the precious object was in Moscow, in one of the old Fabergé shops.

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FABERGÉ MUSEUM IN BADEN-BADEN. CREDITS: EXPEDIA.COM

Two pieces from the Ivanov collection, which became the property of the United Kingdom, were sold at auction …

By the end of 2017, no evidence of Mr Ivanov’s guilt being established by the UK authorities, the collection confiscated in February 2013 by customs officers at Heathrow Airport is finally returned to its owner. But the case is not over yet: to begin with, according to Mr. Ivanov, several coins seized are damaged: including the pommel – rock crystal – cane that belonged to Peter-Karl Fabergé, found broken, and impossible to restore according to him. Worse still, pieces simply have disappeared. Among them: a bronze bust of Tsar Nicholas II and a photo album that belonged to the jeweler Pavel Ovtchinnikov – supplier of Tsar Alexander III -, a rare object whose binding is silver. The collector then asks for explanations: it is said that these two objects, become the property of the United Kingdom, were auctioned …

The Dante operation

Furious, the Russian billionaire decides to file a complaint against the customs services and the British Ministry of the Interior. 

“Some people tried to dissuade me by saying that I had virtually no chance of winning. I think it’s worth it, “says Ivanov. The collector claims in London two billion dollars in damages. 

According to him, the real objective of the English authorities was to seize all the pieces of his museum. To achieve this, an operation called “Dante” would have been set up with the help of British intelligence services: “She was supervised by an agent who worked under cover at the Consulate General of the United Kingdom in Frankfurt,” says the collector.

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CREDITS: DOCUMENTARY FRAMEWORK “FABERGE: A LIFE OF ITS OWN”

From computer vendor to Fabergé egg collector

Alexander Ivanov, a law graduate, was enriched in the mid-1980s, at the time of Mikhail Gorbachev’s perestroika . In the USSR computers were imported and mineral (chemical) fertilizers were exported. In 1988, his profits already amounted to six million dollars, says the billionaire willingly. “Mr. Ivanov was the biggest seller of computers for state services, including the government departments  ,” said political scientist Lev Pavlioutchkov.

Alexander Ivanov estimates the value of his collection at 2 billion dollars.

In the early 1990s, Ivanov left this lucrative business sector to start buying and selling antiques. He began in the plastic arts, but quickly specialized in the items of the house of the jeweler Fabergé, which gradually become his main assets. Alexander Ivanov is not the only billionaire collecting the objects of the most famous Russian company. The oligarch Viktor Vekselberg, chairman of the Renova group’s board of directors, bought in 2004 nearly 200 Fabergé objects from Malcolm Forbes’ heirs for an amount ranging from 150 to 250 million dollars. Today, Viktor Vekselberg’s collection has nearly 700 pieces worth a total of $ 350 million. Obviously, Mr. Ivanov estimates that the value of his own collection is more important ($ 2 billion). His antique colleagues are however dubious: for them, the purchase and sale of antiques can reap profits to buy Fabergé eggs for tens of millions of dollars …

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LILY OF THE VALLEY, FABERGÉ EGG, 1898. CREDITS: DOCUMENTARY FRAME “FABERGE: A LIFE OF ITS OWN”

An unprecedented case

The Russian art critic Dmitry Butkevich doubts that Mr. Ivanov will succeed in obtaining damages: “I do not know any precedent,” he says. Konstantin Babouline, director of the Art Investment portal, also prefers not to make any predictions about the outcome of the case: “This is the first time I am confronted with a confiscation of works of art on the British border. Russian collectors encounter much more often difficulties at the Russian customs. “

Alexander Ivanov, for his part, is considering the possibility that the British justice system will not consider his complaint because of the excessive amount he claims for compensation for his losses. But the Russian collector does not intend to give up: his lawyers are preparing to pursue the United Kingdom in other countries, including Germany. 

© Konstantin Manenkov / Paul Gilbert (English translation). 20 June 2018