Now That Antiquities Dealers Must Comply with AML Laws, What Comes Next?
January 1, 2021
Financial Crimes Task Force Report Provides a Road Map for Other Steps that Should be Taken by the U.S. Government and Private Sector to Bar Criminals from the American Art Market
As we announced in a press statement here, today Congress passed H.R.6395, the National Defense Authorization Act for Fiscal Year 2021 (NDAA), which among other things removes antiquities dealers’ current exemption from what are now standard anti-money laundering (AML) laws and regulations under the Bank Secrecy Act (BSA). H.R. 6395 is an important first step to combat financial crimes facilitated through the art market—but it is just a first step. There are many additional actions that can be taken to safeguard our national security, economic integrity, and responsible collectors, dealers, galleries, auction houses, and museums.
The Antiquities Coalition convened the multi-stakeholder Financial Crimes Task Force to protect the American art market from criminal misuse. This September, the Task Force released Reframing U.S. Policy on the Art Market: Recommendations for Combating Financial Crimes. This report details how the $28.3 billion American art market, the largest in the world, is threatened by money laundering, terrorist financing, and other related crimes, while providing solutions on how to address these challenges. Those recommendations most relevant and applicable to the passage of H.R. 6395 include:
1) For H.R. 6395, the Secretary of the Treasury will be already providing an extensive “notice and comment” period for all stakeholders to ensure that any forthcoming regulations are clear, effective, and appropriate in scope. It is critical that the art market work with the U.S. government to tailor these rules, recognizing that increased due diligence protects not only U.S. interests, but those of the art market as well.
2) Related to the above, the Financial Crimes Enforcement Network (FinCEN), which safeguards the United States financial system from illicit use, should immediately start extensive outreach to the art market and financial sector, including nationwide conference calls, local and regional meetings, and online webinars. Through such awareness raising, FinCEN should seek to educate these key players about the risks facing their sectors, giving them the knowledge and tools needed to fully comply with any regulatory changes, and enlist them as allies.
3) H.R. 6395 does not cover art dealers. Antiquities dealers are just part of a much larger art market—a $64.1 billion global market, of which 44% is in the United States. It is critical that Congress apply the BSA to all dealers in cultural property, as, again, it has already done for all other sectors of comparable risk and scale.
The 2018 5th Anti-Money Laundering Directive of the European Union required dealers for art transactions of €10,000 or more to comply with anti-money laundering regulations, including verifying the seller, buyer, and ultimate beneficial owner (which, as the name suggests, refers to the person or persons who ultimately benefit from a piece’s sale). The United Kingdom and Switzerland now have similar requirements. By making dealers in antiquities subject to the BSA, Congress has taken action to prevent the United States art and antiquities market from becoming a safe haven for financial criminals dodging stricter regulations abroad.
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.