In connection with the late-2020 amendment to the Bank Secrecy Act (BSA) to include “dealers in antiquities” as a result of its inclusion in the National Defense Authorization Act (NDAA), the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued a notice of “Efforts Related to Trade in Antiquities and Art.” The notice is a combination of guidance to entities now covered by the BSA, but it is also a potential backdoor around the entities that Congress chose not to regulate with respect to potential or perceived money laundering risks: art dealers. It also raises concerns about the objectivity of the forthcoming study of the art market that Congress instructed FinCEN to conduct. In either event, it is further evidence that momentum continues to gather for stricter oversight and regulation of the U.S. art market, and the importance of the art trade demonstrating more transparency and diligence if it hopes to modify or mitigate that regulation.
Topics: The Art Newspaper, Nazi-looted art, Antiquities, Terrorist financing, Responsible Art Market initiative, Money laundering, FinCEN, A Tragic Fate, Financial Crimes Enforcement Network, Illicit Art and Antiquities Trafficking Protection, suspicious activity reports, Corporate Transparency Act of 2019, Bank Secrecy Act, National Defense Authorization Act
Casting aspersions about the art market is a popular pastime. And no doubt there is much about the commercial art world that invites this criticism, not least a tendency towards secrecy (or discretion, depending whom you ask). Sometimes these criticisms lean into suggestions of rampant criminality or money laundering, for which there is actually scant support. That is to say, there is a common suggestion that the lack of a single regulatory scheme over the art market (which is not to say it is unregulated, another misconception) is evidence of participation by dealers or collectors in illicit activity. In fact, as we have written before, the far greater risk is of being used by bad actors trying to launder money through art transactions. For this and other reasons, we were proud to assist in drafting the Responsible Art Market initiative U.S. country guide and the more recent toolkit that was launched in January.
Topics: OFAC, Christie's Inc., Responsible Art Market initiative, Money laundering, AML Program, Know your customer, H.R. 5886, Luke Messer, Office of Foreign Asset Control, Illicit Art and Antiquities Trafficking Protection, KYC