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.

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.

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.

This blog post is authored by Deborah Lehr, Chairman and Founder of the Antiquities Coalition, and Tess Davis, Executive Director.

Today, February 24, marks one year since Russia’s 2022 invasion of Ukraine. 

As Russia continues to attack Ukraine by land, sea, and air, we must remember President Volodymyr Zelensky’s warning that Vladimir Putin is aiming to “erase Ukraine, its history and its peoples”— including his country’s rich cultural heritage. Russia is seeking to achieve this goal through both the intentional, targeted destruction of sites and collections as well as pillage and theft. The latter has the added advantage of providing a potentially lucrative source of financing.

And despite the U.S. government’s efforts to isolate Russia’s economy, a major blind spot remains: the American art market.

In 2020, a Senate report revealed how a pair of Russian tycoons laundered millions through the American art market in a full evasion of U.S. sanctions. The report, and many others, refer to the $28.3 billion American art market as the largest unregulated industry in the U.S. and, arguably, the world.

Headlines of this expose tell you much of what you need to know: 

• Politico: “Congressional Probe: Russian Oligarchs Using Art to Evade Sanctions” 
• New York Times: “Opaque Art Market Helped Oligarchs Evade Sanctions”
• Art Newspaper: “Senate Investigation Finds Art Market Secrecy Allowed Russian Billionaire Brothers, Friends of Putin, to Evade Government Sanctions”

The pair in the report are Arkady and Boris Rotenberg, two Russian billionaires, who over the years amassed a fortune in contracts and investments tied to the Kremlin due to their childhood friendship with Vladimir Putin. After Russia invaded Ukraine and annexed Crimea in February 2014, the United States quickly followed with sanctions on Putin and his inner circle, including the Rotenbergs.

By July 2020, when the Senate report was published, these sanctions targeted over 700 Russian individuals and entities. The U.S. government generally feels that sanctions are a powerful tool to force behavior change without military action, yet there had been growing concern in Congress that these particular sanctions weren’t working. 

For too long, the American art market has not been subject to the Bank Secrecy Act (BSA), our country’s primary anti-money laundering (AML) law. This weakness is exploited by bad actors, like the Rotenbergs, to evade U.S. sanctions. 

The Rotenberg scheme hinged on the concept of beneficial ownership of both corporations and art, using shell companies and art intermediaries. Shell companies are businesses that exist only on paper, and it’s important to stress they’re not necessarily illegal, but they can certainly be useful tools for illegal acts. These companies make it incredibly difficult, even for U.S. investigators, to determine who funds and profits from them, especially if they are formed in “offshore” jurisdictions with lax reporting requirements. The Senate investigation states that they don’t think they even found all of the Rotenbergs’ shell companies. 

The brothers also used an art intermediary, in this case, an American expatriate in Moscow by the name of Gregory Baltser. Again, this is a common practice that is not illegal, but a role that can be abused. Baltser, or his art agency, would bid on works for the Rotenbergs at auctions or negotiate with private dealers. They would purchase the pieces, using Rotenberg money disguised through the shell companies, and transfer the title to the Rotenbergs or one of their corporations.

From May to November 2014 alone, these shell companies were used to purchase at least $18 million plus worth of art in the United States, potentially giving the Rotenbergs major financial assets in the country.

The BSA requires high-risk individuals and institutions to assist the U.S. government in detecting and preventing financial crimes, however, major auction houses do not have to comply. If Baltser had been buying precious metals, stones, and jewels (or even an automobile, boat, or plane), U.S. law would have required the sellers to confirm the identity of the actual buyer and taken basic steps to ensure the transactions were not covers to launder money. 

The Rotenberg case study shows that this current art market exemption is not working for our national security and economic integrity — and it’s not working for the art market. The European Union, United Kingdom, and Switzerland have all already applied their AML regimes to the art market, why haven’t we?

If the United States doesn’t act, we risk our jurisdiction continuing to be a safe haven for criminals like the Rotenbergs. As we think about the devastation Ukraine has faced and will continue to face, we urge policymakers to consider closing this pathway to protect our shared history, economic integrity, and global security.

The American art market comprises 42% of the international art market, making it the largest in the world. Because of its scale, U.S. collectors, policymakers, and the public are uniquely positioned to play a role in combating the illicit trade of art and antiquities. 

While most individuals assume looted and stolen artifacts are prevalent only in the U.S.’s largest museums, these objects are located across the nation and appear frequently in smaller museums and at premier art shows.

Tess Davis, Executive Director of the Antiquities Coalition, spoke to David Quiñones, one of the hosts of the Why Are We Like This? podcast, to discuss the global issue of cultural racketeering and how the illicit antiquities trade thrives in the podcast’s home state of Florida.

Miami Beach is the U.S. location for the Art Basel show, an art fair hosting some of the top galleries and auction houses in one place. Davis notes that because efforts to mitigate the illicit antiquities trade have largely focused on New York, illegal art markets are emerging in cities like Miami Beach, Houston, and more.

There have also been significant repatriations from Florida residents in recent years, most notably from Netscape founder James H. Clark. Clark’s collection included tens of millions of dollars worth of artifacts smuggled and trafficked from Southeast Asia, including the 1000-year-old statue of Ganesha.

Davis emphasizes that awareness around the illicit antiquities trade is growing and museum patrons are increasingly holding these institutions accountable for the stolen objects within their walls. As more individuals speak out about cultural racketeering, we can expect to see more repatriations from collectors and museums and vital policy change from national and international governments.

Listen to the full episode here.