Month: December 2020
AC Financial Crimes Task Force Chair John Byrne Highlights AML-Strengthening Implications of NDAA
The Fiscal Year 2021 National Defense Authorization Act (NDAA) is all but sure to become U.S. law as of December 17, having passed in Congress with a 335-78 vote in the House on December 8 and a 84-13 vote in the Senate on December 11. While White House Press Secretary told reporters on December 15 that President Donald Trump intends to veto the bill, the chambers are expected to override such a veto with another vote.
Should the NDAA become law, it would also enact the Anti-Money Laundering Act of 2020, described by AMLRightSource as “the first major reform to the AML infrastructure since adoption of the USA PATRIOT Act.”
AMLRightSource Executive Vice President John Byrne—also a chair on the Antiquities Coalition’s Financial Crimes Task Force—highlighted the strengths of this legislation in the December 11 episode of AMLRightSource’s flagship podcast, This Week in AML, as well as in an interview for an article (“U.S. Senate passes defense bill with new anti-laundering measures”) published on December 14 by Thomson Reuters, described as “the world’s leading provider of news and information-based tools to professionals.”
Byrne’s key takeaways on the Anti-Money Laundering Act of 2020 include:
- Examiners from the various federal agencies would have to undergo more in-depth training: “While examiners do get trained, there has always been concern that sometimes, because of what they’re focused on, they don’t always see the forest from the trees—not an overt criticism, but one I think is justified,” Byrne told AMLRightSource Creative Director Elliot Berman on This Week in AML. “So in this bill … a training program for examiners from the various federal agencies will be created, and it’s got to include risk profiles, financial crime patterns, and—to me, what’s very important—an understanding of why the programs are necessary for law enforcement and how they can result, sometimes, in de-risking. So I think that, in addition to the current training that goes on, this is a welcomed addition.”
- FinCEN would be tasked with soliciting additional feedback from institutions on suspicious activity reports and discussing trends: The Anti-Money Laundering Act of 2020 will obligate the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) “to share feedback with regulators—and, in some cases, disclose to individual institutions when they can, information on the utility of SARS filed,” Byrne told Berman on This Week in AML. “I think that’s very valuable.”
- Overall, its enactment would greatly benefit anyone with a stake in anti-money laundering efforts, including advocates against cultural racketeering: “Since this is the most dramatic series of potential changes to the AML infrastructure since the USA PATRIOT Act in October 2001, I am extremely impressed by the bipartisan work to address reporting, innovation, de-risking and examiner training challenges among many other areas.” Byrne told journalist Brett Wolf in Thomson Reuters. “This is a very real opportunity to improve AML and to address long neglected gaps such as with antiquities dealers and the art market.”
The full Thomson Reuters article is currently only available to clients subscribed to Thomson Reuters Regulatory Intelligence, a resource solution that Thomson Reuters promotes in its brochure as delivering “global coverage of over 1,000 regulatory bodies and more than 2,500 collections of regulatory and legislative materials.”
To listen to the full episode of This Week in AML, click here.
Latest AC Story Map Recounts Black Market Journey of Original Bill of Rights Copy
In recognition of Bill of Rights Day on December 15, the Antiquities Coalition is releasing its fifth, fully immersive Story Map, titled “Lost Rights: An Exploration of the Misadventures of a Stolen American Relic.”
The title and concept for this Story Map are both derived from a book by David Howard, whom Deborah Lehr interviewed on June 30 for an AC exclusive webinar.
Like Howard’s book, this Story Map recounts the journey of one of the original copies of the Bill of Rights through the hands of some of the more prominent antiquities dealers in America. The document was one of just eleven surviving original renditions of the 10 amendments to the Constitution submitted to the 13 states in 1789.
The priceless document was first taken from the North Carolina State Capitol as a spoil of war by a Union soldier in 1865. Following the theft, the document traveled the country for over a century, tucking into private offices and quietly shifting through the hands of multiple antiquities dealers.
Follow its journey below:
By raising awareness of cases such as North Carolina’s Lost Rights, the Antiquities Coalition hopes to help recover invaluable cultural patrimony. If you have any information on lost or stolen American documents, please visit https://tips.fbi.gov/. Also, visit our website to explore The Ten Most Wanted Antiquities list, an illustrated guide to some of the most significant looted, stolen, and missing artifacts from around the world.
Antiquities Coalition Pens Support for Increased Regulations in Arts & Cultural Heritage Law Committee Newsletter
The Fiscal Year 2021 National Defense Authorization Act (NDAA) is all but sure to become U.S. law as of December 14, having passed in Congress with a 335-78 vote in the House on December 8 and a 84-13 vote in the Senate on December 11. Among other things, the NDAA will remove antiquities dealers’ current exemption from what are now standard anti-money laundering (AML) laws and regulations under the Bank Secrecy Act (BSA).
Prior to these recent developments, Antiquities Coalition Executive Director Tess Davis submitted her support for the NDAA’s enhanced regulations in an op-ed for the Fall 2020 newsletter of the Art & Cultural Heritage Law Committee, a committee of the American Bar Association Section of International Law.
In “Increased Regulation Deters Crime—and is Good for the Art Market,” Davis asserted that “criminal misuse of the art market is threatening not only U.S. national security and economic integrity—but also responsible collectors, dealers, galleries, auction houses, and museums,” citing the U.S. Permanent Subcommittee on Investigations’s July 2020 Rotenberg report (“The Art Industry and U.S. Policies that Undermine Sanctions”) and the Office of Foreign Assets Control’s October 2020 Advisory and Guidance on Potential Sanctions Risks Arising from Dealings in High-Value Artwork.
“The Rotenberg report and OFAC advisory underscore why the $28.3 billion American art market is called the country’s largest unregulated industry,” Davis wrote. “Art stands alone, among sectors of similar risk and size, in its exemption from the Bank Secrecy Act (BSA).”
After explaining what the Bank Secrecy Act (BSA) does and what businesses it applies to, Davis highlighted the illogical loophole at hand: had the Rotenbergs been dealing in goods or services covered by the BSA, the businesses involved would have been required to, as Davis described, “take basic steps to ensure the transactions were not covers for financial crimes.”
Many of these steps, Davis noted, align with the safeguards created by following the best business practices of the 21st century art market—but without a legal requirement, adherence to these best practices is essentially optional.
Davis did not ignore the primary concerns of art and antiquities dealers, who, she wrote, fear “not only an erosion in their business culture, which for centuries has been built on discretion, but also increased compliance costs in an economic recession.”
That said, Davis countered these arguments by pointing not only to the fine print of the NDAA, but also to the effects of such legislation on similar and global markets.
“[A]ny regulations would only be crafted after an extensive ‘notice and comment’ period, during which the art market would have ample opportunity to work with the government in tailoring effective rules,” Davis wrote. “And comparable sectors have continued to thrive under the BSA, as has the European art market under similar measures, providing countless lessons from which to learn.”
Aside from protecting U.S. interests, Davis added, increased due diligence will also help the art market avoid “reputational harm, attorneys’ fees, and potential civil criminal liability.”
“To couch the proposed changes in political terms, the art market’s policy of ‘don’t ask, don’t tell’ has failed,” Davis concluded. “Through the BSA or other means, it is time to move on to ‘trust—but verify.’”
To read the full article, click here.
Financial Crimes Task Force Project Director Presents at ACAMS Chapter Meeting
At a recent Association of Certified Anti-Money Laundering Specialists (ACAMS) Alabama Chapter meeting, Financial Crimes Task Force Project (FCTF) Director Liz Fraccaro presented on “Ancient Artifacts, International Intrigue and Financial Crimes.”
ACAMS is the largest international membership organization for Anti-Financial Crime professionals, supporting individuals and organizations who are dedicated to ending financial crime through thought leadership, continuing professional education, and a best-in-class peer network.
Fraccaro explored the documented risks facing the art market as well as how the COVID-19 pandemic has changed the landscape of the legal art market. Through the case studies featured in the 2020 FCTF report, Fraccaro addressed channels corrupt actors have used historically to manipulate the art sector as a means to store and move value through art.
Learn more about the FCTF here.
DLME Instagram showcases “fascinating objects from various partner institutions,” AC and DLME intern Michael Krasuski writes
AC Executive Director Tess Davis Pens Chapter for New Book on Provenance Research
Think Tank Makes Recommendations for Strengthening the Legal Trade in Cultural Material
New Antiquities Coalition Policy Brief Proposes Multilateral Export Control Regimes to Fortify the Legitimate Trade in Cultural Objects
Today, the Antiquities Coalition has released a Policy Brief that examines the possibility of implementing Multilateral Export Control Regimes (MECRs) to strengthen the legal trade in cultural objects in order to prevent the illicit trade. The Multilateral Export Control Regime (MECR) model ensures that importers from market countries make contact with authorities in supplier countries and justify the end use of an intended import before receiving an export license from supplier countries.
Author Sam Greene is a strategic consultant with expertise in international affairs, immigration, security, and trade, with over a decade of experience working at the United States Department of Homeland Security (DHS). In his policy brief, he uses Latin America as a case study, and makes key recommendations for how the region could prepare for and implement the MECR structure to protect cultural heritage.
“While negotiated import controls are excellent in developing positive international relations, and are a needed layer to preventing the illicit flow of cultural property, they can only be fully realized if met by an equally enforced and informative export control,” Greene argues.
Greene recommends that to implement MECRs, Latin American countries appoint necessary representatives, seek out expertise, define restriction lists, designate enforcing authorities, commit to timely implementation, and share accurate information. He also recommends that they encourage other regions to do the same.
For a summary and link to the policy brief, visit: https://thinktank.theantiquitiescoalition.org/can-the-cultural-property-market-ever-be-a-legitimate-market-with-multilateral-export-control-regimes-it-can/
About the Antiquities Coalition Think Tank
The Antiquities Coalition unites a diverse group of experts in the international campaign against cultural racketeering, the illicit trade in art and antiquities. This plunder for profit funds crime, conflict, and violent extremist organizations around the world. By championing better law and policy, fostering diplomatic cooperation, and advancing proven solutions with public and private partners worldwide, the Antiquities Coalition empowers communities and countries in crisis to safeguard cultural heritage for future generations.
Launched in 2016, the Antiquities Coalition Think Tank joins forces with international experts, including leaders in the fields of preservation, business, law, security, and technology, to bring high-quality, results-oriented research to the world’s decision-makers, especially those in the government and private sectors. Policy briefs strive to strengthen policy makers’ understanding of the challenges facing collective human heritage, and to help them develop better solutions to protect it. The views expressed in these policy briefs are the author’s own, and do not necessarily reflect those of the Antiquities Coalition.
Learn more at thinktank.theantiquitiescoalition.org.
AC Executive Director Tess Davis Discusses Impact of COVID-19, Web Marketplaces and the Antiquities Coalition on the Art World in New Art Scoping Podcast Episode
Art historian and museum leader Maxwell L. Anderson released Episode 38 of his Art Scoping podcast, dedicated to spotlighting the thoughts and efforts of art world leaders, on December 5. The latest episode’s protagonist was our very own Tess Davis, executive director of the Antiquities Coalition.
Davis discussed a wide swath of topics with Anderson, focusing particularly on recent Antiquities Coalition efforts and the tenuous, evolving nature of the art world at large.
Key takeaways include:
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- The COVID-19 pandemic has introduced crushing blows and increased volatility to the art world: Stay-at-home orders around the globe left many cultural sites with little to no security protections for several months, rendering them “sitting ducks for criminals,” Davis said, referring to the number of lockdown-facilitated crimes compiled by reports the Antiquities Coalition released in May and August. The shuttering of brick-and-mortar establishments has also inflicted “unprecedented” losses and layoffs, leading experts to anticipate that a significant portion of museums and art businesses will fail to survive the pandemic. In addition, pandemic-related financial unrest has led the art market to become increasingly volatile, with museums selling off their works for “hard cash,” investors leaving the stock market in favor of tangible assets (such as cultural property), and collectors taking out loans from auction houses by using their own collections as collateral. “It’s really a critical time, and whether bad actors profit at the expense of legitimate businesses — it’s going to hinge on how we all respond to this,” Davis said.
- Online antiquities sales, already on the rise before the pandemic, have exploded in the era of COVID-19: Davis cited “archaeological watchdogs,” such as the ATHAR Project, in pointing out a growing trend of posts in Facebook groups dedicated to the trade in pillaged cultural material. “It has been encouraging to see Facebook taking action against this — [but] the words that they’ve made, the statements they’ve made, the policies they’ve made… we’re going to have to see this backed up by action.” Davis said, referencing Facebook’s June 23 announcement that it would begin to delete any content “that attempts to buy, sell or trade in historical artifacts” on Facebook or Instagram. On a positive note, Davis added that because the pandemic has complicated airline travel so greatly, experts are expecting that more smugglers will have to resort to selling antiquities online and shipping them via postal services. “Hopefully these adaptations will make it easier for law enforcement to track and to catch these criminals,” Davis said.
- In light of increased online traction for antiquities sales, The Antiquities Coalition has created a list of “Ten Most Wanted Antiquities”: “What we’re hoping to do is to raise awareness of some of the more infamous cases of ancient art and artifacts that are missing — that have disappeared into the black market, or disappeared otherwise — in the hopes that some of these are out there, somewhere. And so we’ve highlighted pieces from around the world, representing a number of different cultures, that, again, have disappeared… and our hope is that someone will see this and help to bring these pieces home,” Davis explained.
To listen to the full podcast, click here.