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Financial Crimes Task Force Chairs Discuss Safeguarding National Security and Economic Integrity at Recent Bipartisan House Foreign Affairs Committee Staff Briefing

November 6, 2020

The Antiquities Coalition’s Financial Crimes Task Force Chairs John Byrne, Michael Loughnane, Angel Swift, and Tess Davis spoke at a House Foreign Affairs Committee Staff Briefing on November 6, 2020. The chairs discussed the documented risks facing the U.S. art market from money laundering, terrorist financing, sanctions violations, tax evasion, fraud, forgery, and related crimes. Most importantly, they discussed concrete recommendations that Congress can spearhead to fight back.

Key takeaways include:

The American Art Market’s Continuing Exemption from Standard Laws and Regulations Threatens National Security and Gives Bad Actors a Backdoor into the U.S. Economy: In July 2020, a U.S. Senate report exposed how the art market’s continuing exemption from standard laws and regulations had gifted Russian oligarchs Arkady and Boris Rotenberg with an easy backdoor into the world’s biggest economy, evading U.S. sanctions on Vladimir Putin’s inner circle. The report, and many others, refer to the $28.3 billion American art market as the largest unregulated industry in the United States—and, arguably, the world. It is not yet subject to the Bank Secrecy Act (BSA), the United States’ primary anti-money laundering (AML) law. The BSA requires high-risk individuals and institutions to assist the U.S. government in detecting and preventing financial crimes. Because AML regulations do not apply to the art market, the Rotenbergs were able to launder at least $18 million through leading New York auction houses and private dealers, and evade the sanctions meant to keep them out of the United States financial system.  The Rotenbergs are just one example among many of the dangers an unregulated art market poses to national security.

Congress Must Take Action: The EU, UK, and Switzerland have all already taken action and applied their AML regimes to the art market. U.S. dealers operating in Europe—which, given the art market’s global nature, are virtually innumerable—need to be thinking about these rules already. Unfortunately, if the U.S. doesn’t act, it may continue to be a safe haven for criminals like the Rotenbergs. Adding the AML infrastructure to the art market does more than just help identify and prevent money laundering—it would help with the full scope of financial crimes, such as sanction evasion. That said, this is just a first step—there is much more that the US government can be doing to work with the private sector to safeguard our national security, economic integrity, and the vast majority of responsible collectors, dealers, auction houses, and museums.

To view AC’s most recent story map on the Senate report, click here.

To read the Financial Crimes Task Force Report—which calls for new policies, practices, and priorities for the United States to implement on its own and in conjunction with the private sector and international community—click here.