The American art market is considered the largest unregulated market in the world, making it vulnerable to a wide range of financial crimes. This ongoing exemption from standard financial regulatory 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. Unless and until the U.S. public and private sectors close these loopholes, they will leave the world’s largest economy wide open to money launderers, artifact traffickers, drug smugglers, kleptocrats, oligarchs, terrorists, and the many other criminals proven to have exploited the art market’s weaknesses.
We successfully launched the Financial Crimes Task Force, uniting leaders from the art, legal, and banking sectors, as well as former law enforcement and government officials. The task force released an interactive report with 44 concrete recommendations to fight back, aimed at the government, art market, financial sector, and international community.
We provide introductory lectures to regional chapters of AML professionals, addressing the art and antiquities market’s vulnerabilities to financial crimes and stressing the importance of these issues for banking and financial sectors.
In recent years, a growing number of scandals, investigations, prosecutions, and convictions have demonstrated the art market’s dangerous vulnerability to a wide range of financial crimes. This interactive StoryMap illustrates case studies from around the world. While the United States remains the world’s largest art market, and thus dominates any survey, these examples make clear this is a global problem. The cultural objects involved likewise span geography, as well as history, from ancient relics, to Monets and Van Goghs, to Dalis and Picassos, as well as fakes and forgeries. Sometimes these antiquities and artworks are central to the crimes themselves, but just as often, they are tools to launder the proceeds of artifact trafficking, drug smuggling, embezzlement, corruption, or other crimes. The criminals responsible range from small time crooks to infamous kleptocrats, from white-collar embezzlers to black-clad ISIS thugs. However, they are rarely dedicated collectors or professionals from the art market, but rather bad actors seeking to exploit the sector’s many weaknesses. Thankfully, if the U.S. government and private sector work together, there is much they can do to fight back.
Unfortunately, dealers, galleries, and auction houses are not yet covered by the Bank Secrecy Act, the United States’ primary anti-money laundering law, which requires at-risk industries to assist the government in preventing and detecting financial crimes. The statute already applies to dealers in precious metals, stones and jewels, as well as sellers of automobiles, planes and boats, casinos, real estate professionals, travel agencies and pawnshops. Congress is continuing a bipartisan push to tackle this major loophole, as seen from this interactive timeline.
If the United States fails to act, it risks our own market becoming a safe haven for financial criminals. This is because other major market jurisdictions—including the United Kingdom, Switzerland, and the European Union—have already taken similar action to fight money laundering and terrorist financing in their art markets. This map highlights examples of these and other relevant legislation around the world.
