On January 1, 2021, the U.S. Senate overrode President Trump’s veto of the National Defense Authorization Act for 2021 (NDAA), a bill that (perhaps surprisingly) included rules affecting the art market. Specifically, the new law subjects antiquities dealers to the provisions of the Bank Secrecy Act, requires registration of the ultimate beneficial ownership of limited liability companies, and directs the Financial Crimes Enforcement Network (FinCEN) at the Department of the Treasury to conduct a study of money laundering in the art market. Long considered but only now passed, the bill is a significant step into regulating the U.S. art and antiquities market, though still far less invasive than the European Union’s current approach. The new regulations raise questions about the cost benefit balance of compliance, but leave no doubt after last year’s Senate report that regulators have the art market in their sights and the market must respond if it wants to have a say in the oversight that is sure to come.

Readers here will be familiar with our support for and participation in the Responsible Art Market Initiative’s common-sense approach to diligence and responsible practices, and this development is no exception. As I tried to spotlight in the RAM New York webinar we hosted last fall, whatever one thinks of the regulations or the regulators, these things are happening. And while we expressed skepticism that FinCEN is the right body to conduct a study of the art market, the market has a choice here. We can complain, or we can get involved in the dialogue. I would rather be at the table in the discussion than outside the room. The FinCEN study may not be ideal, but it is an opportunity that responsible actors will ignore at their peril.

Immediately Squanders Market Opportunities Created by Brexit

On a historic day in the European Union, Germany quietly enacted the revised Cultural Property Protection Law (Kulturgutschutzgesetz) that has sparked much controversy in recent months.  On the very day that the United Kingdom’s vote to leave the European Union raises myriad questions about the effect on London in particular as a world center of the art market (see here for the terrific first take by our friends at Boodle Hatfield in London), Germany ironically has passed a law that will prevent it from stepping into any of the likely market void left by Britain's EU exit.  While Germany is not alone in cultural property protection laws of this sort, it is a silly and unnecessary regulation that will undercut the German art market—as vocally proclaimed by German art market players themselves.  In the art world, it was a regressive day on the eastern side of the Atlantic and a huge opportunity lost for Germany.