AC Leads Discussion on the Threat of Sanctions Evasions to U.S. Art Market

February 24, 2023, marks one year since Russian forces invaded Ukraine with a plan to “erase Ukraine, its history and its people,” including the country’s cultural heritage. Russia has worked toward its goal by destroying historical sites and looting Ukraine’s rich cultural history, ultimately playing a role in financing their reign of terror.

Despite the U.S. government’s efforts to isolate Russia and its economy, the American art market remains a blind spot for Russia’s crimes. As the American art market continues to be recognized as the largest unregulated market in the world, the U.S. government must do more to prevent financial crimes from impacting responsible dealers, collectors, and citizens.

On March 30, 2023, the Antiquities Coalition hosted a roundtable to discuss the vulnerabilities of the American art market and the importance of sanctions as a preventative measure against bad actors looking to exploit it. “Not a Pretty Picture: Threats Facing the Responsible Art Market, U.S. Economic Integrity, and National Security from Sanctions Evasions” featured government officials, law enforcement, academics, non-governmental organization leaders, and other experts to explore each sector’s role in closing loopholes and protecting the $30 billion market.

Attendees also focused on the U.S. Senate Committee on Homeland Security & Governmental Affairs’ Permanent Subcommittee of Investigations (PSI) report that pointed out many of these financial loopholes remain wide open to misuse. This 150 page report, compiled from dozens of interviews and millions of documents, detailed how a pair of Russian oligarchs had laundered at least $18 million through top auction houses and galleries, in full evasion of U.S. sanctions imposed in 2014 on Vladimir Putin’s inner circle. 

The Antiquities Coalition thanks all participants who shared their expertise during the roundtable and looks forward to seeing the U.S. government take further action to preserve and protect our nation’s cultural heritage.

AC’s Tess Davis Joins the G20 to Discuss Cultural Heritage Preservation

The Group of Twenty (G20) makes up at least 90% of the global art market, highlighting that its member states are uniquely positioned to lead the fight against cultural racketeering. Under the 2021 Italian Presidency, the G20 prioritized combating the illicit trade, hosting events for international leaders to discuss the issue and establishing a specific working group on culture. 

This focus has continued under this year’s President the Republic of India, and this year the Cultural Working Group is hosting four webinars to inform its recommendations for G20 countries to address the risks their markets face from transnational crimes via art and artifacts, including smuggling, money laundering, and terrorist financing.

On March 28, 2023, Tess Davis, Executive Director of the Antiquities Coalition, spoke during the first thematic webinar on the Protection and Restitution of Cultural Property and delivered five recommendations for the G20 to combat looting and trafficking. 

  1. Continue to Recognize the Illicit Trade is a Serious Crime: Working towards the end goal of dismantling criminal networks through prosecutions and convictions is critical and sends the message that looting and trafficking are not white collar, victimless crimes.
  2. Foster a Whole of Government Approach: The Cultural Working Group could serve as a model for its Member States by taking a Whole-of-G20 approach, reinforcing the Working Groups on Trade, Investment, and Corruption as well as the Finance Track.
  3. Ensure Better Coordination with Member States: The Culture Working Group could encourage Member States to assign day-to-day responsibility for this issue to a senior staff person within their governments.
  4. Strengthen the Legal Framework: Better use of existing instruments such as the UNTOC, harmonization of national laws, and training for legislative drafters, attorneys, and judges, are all necessary steps.
  5. Committing to Continuing Action: An annual, high-level convening will sustain the momentum from India, Indonesia, and Italy’s Presidencies.

These recommendations are part of a larger report from the Antiquities Coalition’s G20 Task Force, Safeguarding Cultural Heritage in Conflict Zones: A Roadmap for the G20 to Combat the Illicit Trade in Cultural Objects.

During the working group’s first public program tackling the cultural racketeering crisis in 2021, Deborah Lehr, Chairman and Founder of the Antiquities Coalition, emphasized that the G20 must take collective action to end cultural racketeering.

Persistent loopholes in the global art market threaten governments and legitimate businesses by enabling corruption, money laundering, and terrorist financing. The Antiquities Coalition commends the G20 for prioritizing cultural property protection and looks forward to how it will tackle the illicit antiquities trade.

AC Joins Letter Calling on Secretary Yellen to Appoint Permanent FinCEN Leadership

On March 8, the Antiquities Coalition joined the Financial Accountability and Corporate Transparency (FACT) Coalition and 24 others in co-signing a letter to Treasury Secretary Janet Yellen. 

The letter urges Secretary Yellen to appoint a permanent director of the Financial Crimes Enforcement Network (FinCEN), the office responsible for setting national anti-money laundering standards and serving as the country’s financial intelligence unit. Stable leadership is needed to ensure the bureau sets rules to effectively curb the illicit trade in art and antiquities.

The letter emphasizes that without steady leadership, the bureau will not be able to fulfill its mission and reach its full potential, specifically stating:

“For nearly two years, the Bureau has gone without permanent leadership, contradicting both the gravity of FinCEN’s mission and the stated national security, economic, and criminal justice objectives of the Administration. Lack of a permanent director complicates endeavors to set a clear vision and direction, build and maintain a collaborative leadership team, and ensure staff are best able to deliver for the American people.”

The continuing exemption of the art and antiquities market from standard laws and oversight, which now cover all industries of comparable risk and size, is a documented and growing threat to our national security and integrity, as well as the vast majority of legitimate collectors, dealers, auction houses, and museums. FinCEN is vital to ending these financial crimes to protect our shared history, national security, and global economy.

The Antiquities Coalition will continue to work alongside anti-money laundering organizations to provide recommendations for the U.S. government to combat cultural racketeering.

Learn more and read the letter here.

AC’s Tess Davis Featured in New ICIJ Met Investigation

The Metropolitan Museum of Art in New York (the Met) is home to “1.5 million works of art spanning 5,000 years of culture around the globe.” The museum’s notable collection makes it uniquely responsible to lead the Western response to the illicit trade of art and antiquities, yet the Met’s reputation continues to erode.

A recent investigation from the International Consortium of Investigative Journalists (ICIJ), Finance Uncovered, and other media partners uncovered new concerns about the provenance of the Met’s collection. Their findings revealed that at least 1,109 pieces in the museum’s catalog have close ties to individuals indicted or convicted of antiquities crimes, and 309 of these suspect artifacts remain on display.

One antiquities dealer identified in the report is Robert E. Hecht. The Met began acquiring objects from Hecht in the 1950s before Hecht was charged with antiquities smuggling in Italy in 1959 and 1961. Despite his involvement with looted and stolen objects, the Met continued buying from him. This is unfortunately not the only incident of this kind.

Tess Davis, Executive Director of the Antiquities Coalition, was quoted in response to the growing controversy surrounding the Met’s catalog:

“The Met sets the tone for museums around the world … If the Met is letting all of these things fall through the cracks, what hope do we have for the rest of the art market?”

The Antiquities Coalition continues to call for “strong, concrete, and immediate action” from the Met, including other specific recommendations that the museum could take to regain public trust. Read the full investigation here.

The AC: The Met Museum Must Continue to Enhance Transparency of its Collection

The Antiquities Coalition welcomes a new feature from the Metropolitan Museum of Art in New York (the Met), which seeks to explain how it came into possession of its “1.5 million works of art spanning 5,000 years of culture around the globe.”

In the release, published on March 13, 2023, the museum’s Director Max Hollein recognizes that “The Met is responsible for how we build and steward our collection,” and pledges that its actions will “reflect this responsibility.” The resource also stresses that the museum is fully “committed to responsible collecting,” going “to great lengths to ensure that all objects entering the collection meet our strict standards,” including not only “all legal requirements” but key ethical guidelines put forward by the Association of Art Museum Directors and others. A new website also helps the public learn about repatriations, including examples of both returned illicit antiquities and Nazi-looted art. These include a thirteenth-century wooden Temple Strut with a Salabhinka and a tenth-century stone sculpture, Shiva in Himalayan Abode with Ascetics, returned in 2021 and 2022 to the Government of Nepal; the Coffin of Nedjemankh, returned in 2019 to the Government of Egypt; two tenth-century Koh Ker stone statues of “Kneeling Attendants,” returned in 2013 to the Kingdom of Cambodia; and others. 

This step comes as the Met faces increased scrutiny of its collecting practices from such varied sources as law enforcement, investigative journalists, activists, and even comedians like John Oliver. In recent years, a police probe spanning several countries has implicated the museum in a transnational trafficking ring operating out of Egypt and war zones such as Libya, Syria, and Yemen. While no charges have yet been brought in the United States against any museum officials, including those at the Met, a related criminal case is moving forward in France against Jean-Luc Martinez, former head of the Louvre. In connection with the investigation, U.S. authorities have also seized millions of dollars worth of Egyptian treasures from the Met, alleging they were evidence of the criminal possession of stolen property and conspiracy. 

“The Met, as the largest and most-visited art museum in the Western Hemisphere, should be leading the fight against cultural racketeering,” said Deborah Lehr, Chairman and Founder of the Antiquities Coalition. “We appreciate that museum leadership is listening to calls to strengthen transparency with regards to its collections practices, but it has an opportunity—and obligation—to do more. We urge the Met to convene a task force of distinguished experts to uncover why past ethical and legal lapses happened, and more importantly, ensure they never happen again.”

The Antiquities Coalition has long called for “strong, concrete, and immediate action” from the Met, including other specific recommendations that the museum could take to regain public trust. This is even more critical given breaking news: today, March 20, the International Consortium of Investigative Journalists (ICIJ) revealed that at least 1,109 pieces in the museum’s catalog have close ties to individuals indicted or convicted of antiquities crimes. 309 of these suspect artifacts remained on display.

Newly Signed Cultural Property Agreement Will Shut the American Art Market to Illicit Antiquities from Tunisia

The Antiquities Coalition commends the United States and Tunisia for building law enforcement cooperation and strengthening their diplomatic ties in the fight against the looting and trafficking of ancient art and artifacts.

On March 17, 2023, U.S. Ambassador to Tunisia Joey Hood and Minister of Cultural Affairs Hayet Guettat Guermazi signed a bilateral cultural property agreement, committing both countries to combating the illicit trade. The Government of Tunisia had requested the agreement on November 7, 2019. 

This agreement closes U.S. borders to illegally acquired or exported Tunisian antiquities. It does not affect the legal trade, as antiquities exported legally may still enter the U.S. market. In fact,  the agreement will open new opportunities for responsible cultural exchange between the two nations, such as traveling exhibitions and museum loans.

Tunisia, while the smallest country in Northern Africa, is home to eight world heritage sites, including the extensive archaeological site of Carthage, a Phoenician city founded in the 9th century BCE.

By restricting the import of undocumented cultural objects, cultural property agreements fight cultural racketeering, while allowing the legitimate trade to continue and thrive. In doing so, they protect the vast majority of responsible collectors, dealers, galleries, auction houses, and museums from being misused by criminals.

With this signing, the United States now has agreements with six countries in northern Africa, also including Algeria (2019), Egypt (2016), Libya (2017), Mali (1993), and Morocco (2021)—demonstrating the region’s desire to work with international partners to fight cultural racketeering, while also sharing its rich heritage with the world.

FATF: US Should Apply Anti-Money Laundering and Terrorist Financing Laws to High Risk Actors in the American Art Market

The Antiquities Coalition welcomes a new study from the Financial Action Task Force (FATF) on Money Laundering and Terrorist Financing in the Art and Antiquities Market. The 57-page report explores the links between money laundering, terrorist financing, and cultural property, identifying several factors that make the USD $65.1 billion market attractive to criminals and terrorists seeking to launder illegal proceeds or otherwise fund their activities. It notes that some countries have taken proactive action to mitigate these risks, but concludes more needs to be done: many jurisdictions do not have sufficient awareness and understanding of the risks, resulting in a lack of law enforcement resources and expertise, as well as difficulties pursuing cross-border investigations.

FATF warned that the art and antiquities market is vulnerable to this misuse, and likewise that governments are currently ill positioned to fight back, due to a number of challenges such as:

  • difficulties in tracing the origin of cultural objects;
  • a history of privacy and the use of third-party intermediaries in the sector;
  • inadequate measures, or none at all, to identify and verify customers;
  • a low number of suspicious transaction reports filed with Financial Intelligence Units;
  • a lack of prioritization of investigations in this area;
  • limited resources, awareness, and expertise by operational authorities; and
  • difficulties with cross-border investigations.

The report urges countries to strengthen their understanding of the current threats, while providing advice on successful strategies for responding. It also identifies several risk indicators that can help public and privacy sector entities identify suspicious activities, and highlights the importance of strengthened anti-money laundering (AML) and counter-terrorist financing (CFT) measures. It additionally stresses the importance of rapidly identifying and tracing cultural objects involved in money laundering or terrorist financing to aid the seizure and confiscation of items, as well as any associated illicit proceeds.

The report includes some good practices that countries have taken to address the challenges they face, including:

  • the establishment of specialized units and cross-disciplinary networks of experts;
  • enhanced domestic and international information sharing;
  • access to relevant databases; and
  • cooperation with experts and archaeologists to help identify, trace, investigate and repatriate cultural objects.

The 60-page report was published on February 27 and reinforces many of the Antiquities Coalition’s findings and recommendations from its 2020 Financial Crimes Task Force Report. Indeed, in that study, the Antiquities Coalition called on FATF to generate a typology report to identify money laundering and terrorist financing vulnerabilities related to the art and antiquities trade. Other recommendations reinforced in the FATF report include calling on the public and private sectors to: 

  • work together to strengthen information sharing, including having national customs and law enforcement agencies contribute data on their cultural property seizures to the World Custom Organization (WCO), for inclusion in its annual Illicit Trade Report;
  • update guidance and training for law enforcement to include the unique risks and opportunities presented by the art market;
  • use FinCEN’s existing tools, such as targeted record-keeping and reporting requirements, to better understand threats to the art market from financial crimes; and
  • apply AML/CFT requirements to high-risk art market participants.

The American art market remains largely excluded from the U.S. Bank Secrecy Act (BSA), the 1970 statute that still governs AML and CFT efforts in the United States. The 2020 AML Act was the first major update to the BSA in almost twenty years, and among many other things, added antiquities dealers to the list of individuals that must assist the U.S. government in preventing and detecting financial crimes. In addition to expected businesses like banks, the BSA had already applied to sellers of precious metals, stones, jewels, automobiles, planes, and boats, as well as to casinos, real estate professionals, travel agencies, and pawn shops. 

The 2020 AML’s Act inclusion of antiquities dealers was just one small part of a wider legislative overhaul, that has left Treasury with enormous tasks before it in the months and even years ahead. FATF’s report on Money Laundering and Terrorist Financing in the Art and Antiquities Market reinforces the need to prioritize the regulation and protection of this market in the United States.

Read the FCTF Report here.

AC Congratulates Advisor Dr. Zahi Hawass on Latest Discovery

The Great Pyramids have remained a mystery for thousands of years. Experts are even divided on how exactly the pyramids were constructed. Although they have been studied extensively for years, new research methods continue to uncover fascinating details about their interior structure.

After eight years of exploring, Dr. Zahi Hawass, Advisor for the Antiquities Coalition, and his team have uncovered a new tunnel in the Pyramid of Khufu. This work was made possible by recent scanning technology allowing researchers to look at unexplored areas without disrupting  the Pyramid itself. This achievement brings us one step closer to learning more about these significant pieces of history, their construction, and those who built them. 

This discovery also showcases the importance of preserving and protecting cultural heritage sites to allow for the detection of historical objects without causing harm. The Antiquities Coalition congratulates Dr. Hawass on this wonderful revelation and looks forward to future contributions from his team.

Watch the press conference here.

Dynamite Doug Podcast Exposes Douglas Latchford with AC’s Tess Davis

Cambodia’s rich cultural heritage was ravaged during years of Civil War and sold into the illicit antiquities market by numerous smugglers. However, one stands out among the rest for his severe crimes against the nation’s history: Douglas Latchford.

For more than 40 years, Latchford was the world’s foremost dealer of Cambodian antiquities, even allowing some to end up in prestigious institutions like the Metropolitan Museum of Art (Met) in New York and the British Museum. The Antiquities Coalition worked extensively alongside the Pandora Papers investigation in exposing Latchford’s dark legacy on a global scale in 2021.

On March 1, Project Brazen launched Dynamite Doug, a new podcast series diving into how Latchford carried out the greatest art heist in history – the looting of Cambodia’s entire cultural heritage. The six episodes were informed by Latchford’s emails, secret audio recordings and over 30 interviews to serve as the most explosive account yet of his actions. 

Hosted by actor Ellen Wong, the series features cultural heritage experts including Tess Davis, Executive Director of the Antiquities Coalition, in conversations on how Latchford got away with destroying Cambodia’s heritage for his own gain.

Cambodian dancer Sophiline Cheam Shapiro staged a protest in the Met to accompany the podcast launch, spotlighting the nation’s attempts to reclaim its heritage as she danced alongside statues looted by Latchford and on display.

Learn more about the podcast and listen here.