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Financial Crimes Task Force Discuss Gaps in U.S. Policy on the American Art Market at a Recent U.S. Government Accountability Office (GAO) Staff Briefing

November 10, 2020

The Antiquities Coalition’s Financial Crimes Task Force Chairs John Byrne, Dennis Lormel, Michael Loughnane, and Tess Davis, in addition to Project Director Liz Fraccaro, spoke at a U.S. Government Accountability Office (GAO) Community of Practice Staff Briefing on November 10, 2020. The briefing was presented by an internal community of practice within GAO, which is a learning group aimed at information sharing for those working on matters pertaining to illicit finance. The audience consisted of analysts, methodologists, and general counsel from across GAO mission teams.

The chairs discussed the Antiquities Coalition’s nonpartisan, multi-stakeholder initiative, the Financial Crimes Task Force. The Task Force was convened to develop solutions to protect the art market from criminal misuse, and published its initial findings in a September report, Reframing U.S. Policy on the Art Market: Recommendations for Combating Financial Crimes. The report puts forward 44 concrete recommendations to combat financial crimes in the art market, aimed at the government, art market, financial sector, and international community.

Key takeaways include:

There are Documented Risks Facing the American Art Market: Money laundering, terrorist financing, sanctions violations, tax evasion, fraud, forgery, and related crimes are just some of the risks facing the $28.3 billion American art market. 

The Art Market’s Continuing Exemption from Standard Laws and Regulations is a Threat to National Security and Economic Integrity: Despite its size and value, the American art market 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. In addition to businesses one would expect, such as banks, the statute also applies to sellers of precious metals, stones, and jewels; sellers of automobiles, planes, and boats; casinos; real estate professionals; travel agencies; and pawn shops. This current art market exemption presents serious risks to our national security and economic integrity, and it is threatening the integrity of the legal art market and legitimate collectors.

The U.S. Government Must Take Action: The EU, UK, and Switzerland have all already taken action and strengthened their AML regimes, paying particular attention to the art market. If the U.S. doesn’t act, it may become more vulnerable and operate as a safe haven for criminals. 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.

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.