August 24, 2000

Sotheby's Response

Date: Thu, 24 Aug 2000 15:43:56 +0100

Dear Mr. Cremers,
We are writing in response to the recent emails circulated to your subscribers worldwide. Mr. Van Rijn has made no specific, substantiated allegations of wrongdoing by Sotheby's. There are only general, unsubstantiated allegations about some form of illegal operation involving Egypt, Australia and the United States. You and your readers must appreciate that Sotheby's has no obligation to respond to unsubstantiated allegations. Moreover, over the last few years, Mr. Van Rijn has repeatedly made unsubstantiated allegations about Sotheby's, all of which remain unproven. Finally, for your information, Mr. Van Rijn is a confessed forger and is reported in the press to have been convicted of a felony. He recently observed to us in an email that "we are old enemies". Given this long history, we did not feel it necessary or appropriate to respond. Indeed, we are disappointed that you have chosen to print and circulate such rumor and innuendo. If there are ever specific, detailed and credible allegations about any items we sell, we certainly will conduct an appropriate investigation.

Nevertheless, in the hope that, in the future, you will contact us before posting unsubstantiated claims about our conduct, we provide the following response. With respect to the specific lots offered at Sotheby's in June, we have no reason to believe that either of the parties that Mr. Van Rijn mentions were ever owners of the items at issue. Our consignor was a US dealer who has confirmed to us that the items were not purchased from the parties Mr. Van Rijn mentions. None of our specialists saw the consigned property in Australia at any time.

On a broader note and by way of background information for you and your readers, Sotheby's engages primarily in the public auction sale of fine and decorative works of art and has offices located in more than 30 countries. Auctions are conducted in 14 auction centres throughout the world. Sotheby's has, therefore, a commercial interest in not having stolen or smuggled works of art circulating in the art market, and strongly opposes the destruction of archaeological sites, art theft and illegal export. The Company fully supports the goal of suppressing the illicit traffic in works of art and takes numerous precautions, as outlined below, to minimise the risk of inadvertently offering for sale any objects that may constitute part of the illicit market. Sotheby's role in combating the illicit art market

Sotheby's Worldwide Compliance Department.

To strengthen our defence against the illicit trade in works of art, Sotheby's was the first in the art industry to establish a Worldwide Compliance Department. The Compliance Department reports to the Audit Committee of the Board of Directors of Sotheby's Holdings, Inc and has primary responsibility for ensuring the implementation of Company policies on such issues as the international movement of works of art. These policies are periodically reviewed and revised by the Compliance Department.

Each employee is personally responsible for understanding and complying with Sotheby's internal policies. The Compliance Department trains employees; monitors observance of company policies; conducts systematic audits to track compliance; answers employees' questions about Company policy and investigates complaints. Violations of the Company's rules may subject employees to disciplinary action, including termination of employment.

Employees are obliged to comply with Sotheby's internal policies and the laws of the countries in which the employees are doing business, including applicable export or import laws. Employees have been instructed to report any potential or actual violations of Sotheby's policies or of local law to either the Legal Department or the Compliance Department.

The Worldwide Compliance Department includes three qualified lawyers, who work closely with, and are supported by, Sotheby's Worldwide Legal Department, which has been expanded to include nine lawyers based in the major auction locations of London and New York. A network of law firms around the world support the Legal and Compliance Departments.

Sotheby's policies. An important element of Sotheby's policies is that Sotheby's will not sell property if it knows that it was illegally exported or imported unless irregularities can be legally rectified before the sale. If an employee suspects, or has knowledge of, an illegal export or import, they must report their concerns to the Legal Department.

When providing either pre-sale estimates to clients abroad or receipting property from clients in a country with relevant export controls, it is Sotheby's policy to advise the client in writing that they must comply with applicable export and import control laws.

To ensure that works of art are offered for sale by Sotheby's with good title, all sellers are required to provide written confirmation of their legal ownership. Sotheby's requires sellers to warrant that they have good title and that both title and right to possession will pass to the buyer. In addition, sellers agree to indemnify the buyer for breaches of this warranty.

Sotheby's also requires sellers to confirm in writing:
* that the property has been lawfully exported as required by the laws of any country in which it was located,
* that required declarations upon the export and import of the property have been properly made, and
* that any duties and taxes on the export and import of the property have been paid
* that they will indemnify the purchaser if there is any third party claim to the property and
* that they will provide Sotheby's with all information they have regarding the provenance of the property.

Catalogue circulation.

To minimise the risk that lost or stolen items have inadvertently been included in a Sotheby's sale catalogue:
* all lots with a low pre-sale estimate of Ł500 or more are routinely reviewed at Sotheby's expense by the Art Loss Register
* relevant catalogues are circulated to appropriate international governmental and law enforcement agencies, and
* if there is reasonable basis to believe that property has been stolen, Sotheby's Legal Department is to be informed immediately.

Provenance.

Provenance is the history of ownership of an item. Sotheby's generally publishes provenance that in its opinion contributes to scholarship or assists in distinguishing the work of art. As is evident by the broad public support for such measures as the European Union's Data Protection Act, there are numerous legitimate reasons a person may want to protect their privacy. It may be uncomfortable for the seller to advertise their identity in public if they are selling out of financial necessity. The identity of prior owners may no longer be known given the age of an object or the fact that it is not unique. In addition, the seller may have bona fide concerns about unwanted solicitation from auction houses, dealers, art insurance brokers or others. There are also reasonable concerns about security from theft. Moreover, if a client is a selling because of a divorce or separation, they may not want to state publicly their identity as seller.

Sotheby's makes special provenance inquiries particularly of archaeological or ethnographic material that we offer for sale. Indeed we hold special training sessions of the staff involved in soliciting consignments in these areas to be sure that the relevant staff are fully aware of their legal obligations and of Company policy. If we are not comfortable with the provenance information provided or the identity of the seller, we turn the property away.

If Sotheby's receives an inquiry from an interested party to provide additional provenance, and such provenance exists, then it can, under appropriate circumstances, be made available. In response to an informal inquiry regarding title to an object, Sotheby's may request that the seller release the auction house from its duty of confidentiality or that the seller appoint an intermediary to speak with a claimant. Information may also be provided in response to valid legal process such as a binding Court order.

Effects of the Illicit Market

Sotheby's draws attention to the Art Loss Register's report that although the number of lost or stolen items in the ALR database has increased dramatically in the last 10 years, the number of allegedly stolen items that appear to match items in auction catalogues has decreased. This suggests that there is an ever-widening gap between the illicit market and the legitimate market. This may be due, in part, to the commitment of Sotheby's and others in the legitimate art market to avoid selling looted, stolen or smuggled property as well as to the increased public awareness of the activities of the Art Loss Register.

We would hope that in future the Museum Security Network would not simply repeat unsubstantiated allegations but that it would itself make a determination about the bona fides of information and allegations submitted for circulation on your site. We repeat that we take seriously any credible, substantiated allegations, but to date Mr. Van Rijn's recurring unsubstantiated allegations have not seemed worthy of response.

Rena J. Moulopoulos
Compliance Director
Sotheby's Holdings, Inc.

Dear Rena J. Moulopoulos,

First of all I do want to thank you for your extensive reaction. I must admit that it did disappoint me the past six weeks that it took so long to receive your comments. It took seven requests, both via e-mail and fax to finally receive the above statements.
A couple of months ago I did try and get Sotheby's comments on the Hong kong auction opposed to by the Chinese government. These repeated requests remained without any reply.
The step I took yesterday to inform our readers about all correspondence to both auction houses and individual dealers was a difficult step to take. The last thing I want to do is to stimulate baseless rumors.
However, Mr. Van Rijn's accusations are too explicit to just ignore. I am very glad that Sotheby's finally realized this as well.
Your message will be forwarded unedited to our readers.