Congress Applies Anti-Money Laundering Laws to Antiquities Dealers
January 1, 2021
Legislation Follows Revelations that America’s Enemies Are Exploiting Regulatory Loopholes in Its $28.3 Billion Art Market
WASHINGTON, DC, January 1, 2021—With the National Defense Authorization Act for Fiscal Year 2021 (NDAA), which passed today, Congress has begun to close regulatory loopholes that have made the American art market one of the largest unregulated markets in the world.
The bill, H.R. 6395, removed antiquities dealers’ current exemption from what are now standard anti-money laundering (AML) laws and regulations under the U.S. Bank Secrecy Act (BSA). Specifically, the NDAA adds those “engaged in the trade” of ancient art and artifacts to the BSA’s list of high risk professions and industries, which must assist the U.S. government in preventing and detecting financial crimes. While what this requires in practice will be determined at a later date, the BSA has generally sought to reinforce good business practices like performing customer due diligence and record keeping, as well as anonymously reporting suspicious activity to the relevant authorities. In addition to expected businesses like banks, the statute already applies to sellers of precious metals, stones, jewels, automobiles, planes, and boats, as well as to casinos, real estate professionals, travel agencies, and pawn shops.
“A bipartisan Congress investigation confirmed that bad actors are exploiting the multi-billion dollar American art market, threatening our national security and economic integrity, as well as responsible collectors, galleries, auction houses, and museums,” said Deborah Lehr, chairman and founder of the Antiquities Coalition, referring to July revelations that Russian oligarchs had laundered millions through American auction houses and art dealers, fully evading U.S. sanctions on Vladimir Putin’s inner circle. “By applying anti-money laundering protections to antiquities dealers, Congress has taken an important first step to fight back, but this is just a first step. There is much more the U.S. government can—and should—do in partnership with the private sector to combat criminal misuse of the art market.”
One roadmap was provided by Reframing U.S. Policy on the Art Market: Recommendations for Combating Financial Crimes, published in September by the Antiquities Coalition’s Financial Crimes Task Force. This comprehensive report details how the American art market, which makes up 44 percent of the global total, is dangerously susceptible to money laundering, terrorist financing, sanctions violations, and related crimes. It also provides 44 solutions to address these challenges—foremost of which is adding dealers in cultural property to the BSA.
John Byrne, co-chair of the Task Force and former chairman of the Association of Certified Anti-Money Laundering Specialists (ACAMS), the largest AML organization in the world, also praised today’s action by Congress.
“The AML community has long advocated that those with financial footprints that can be abused for the movement of illicit funds be part of the BSA infrastructure,” Byrne said. “The actions of this Congress will ensure that criminals and terrorists will no longer have an easy path to utilize cultural artifacts to support future horrific acts.”
To learn more about how the U.S. government can partner with the private sector to protect the American art market from financial crimes, read the full Antiquities Coalition Task Force Report and explore our other interactive resources here.
To learn more about how H.R.6395 will impact the art market, read our FAQ here.
To learn more about how the U.S. government can build on H.R.6395, read our post here.
About the Antiquities Coalition
The Antiquities Coalition unites a diverse group of experts in the fight against cultural racketeering: the illicit trade in antiquities by organized criminals and terrorist organizations. This plunder for profit funds crime and conflict around the world—erasing our past and threatening our future. The Coalition’s innovative and practical solutions tackle crimes against heritage head on, empowering communities and countries in crisis. Learn more at theantiquitiescoalition.org.