A Bill That Aims to Fight Money Laundering Through Antiquities Sales Is Making Its Way Through Congress. Some Dealers Are Quaking

A bill currently before the Senate could subject art and antiquities dealers to tighter oversight.

The Capitol in Washington, DC. (Photo by Samuel Corum/Getty Images)

Antiquities dealers in the US should be keeping a close eye on Capitol Hill.

A bill currently making its way through Congress could have major implications for the art and antiques business, requiring antiquities dealers to report even small transactions to the government, alert authorities of suspicious activity, and maintain extensive records of their sales. The bill, which is part of a broader effort to crack down on money laundering and terrorist financing in both the US and Europe, passed the House of Representatives on October 22 and is now being reviewed by committee experts in the Senate.

Not surprisingly, the proposed legislation, officially called the Corporate Transparency Act of 2019, has provoked fierce debate. Some opponents believe the proposal—which would remove antiquities dealers’ current exception from the Bank Secrecy Act, requiring these businesses to adhere to rigorous reporting standards—would further isolate the US from the rest of the world and aims to solve an almost nonexistent problem.

Blanket import restrictions in defiance of the requirements set by Congress, have closed off much of the world to US art collectors and museums,” said Kate Fitz Gibbon, an attorney in New Mexico who specializes in cultural property and is the executive director of the Committee for Cultural Policy. “Collectors and museums that collect ancient art think of themselves as staid and sober…. Look at coin collectors. There’s probably no other group of collectors so focused on scholarship or so intolerant of error.” 

Fitz Gibbon argues that more research is necessary before legislation is implemented. “If Congress is intent on shifting policy, there should be legitimate explanations of why change is necessary, supported by facts and informed by public testimony,” she says. 

Not everyone agrees with this position, however. “Having spent over 30 years in the anti-money laundering community, it is imperative that all entities with a financial footprint have an obligation to report suspicious activities such as possible fraud and money laundering,” said John Byrne, an attorney and vice chairman of consulting firm AML RightSource. “This clearly includes sellers and buyers of art or antiquities. Hopefully Congress will be successful in adding those businesses.”

Meanwhile, the Antiquities Coalition, an organization dedicated to combating antiquities looting, is advocating for the law to be expanded even further, to encompass art dealers rather than just antiquities dealers. The coalition says in a statement that unless art dealers are explicitly added, “it will be a major missed opportunity, as antiquities are just one part of a much larger art market.”

After the legislation was approved by the House of Representatives late last month (far more quickly than expected, according to The Art Newspaper), the bill went to the Senate on October 23 and has since been read twice and referred to the Committee on Banking, Housing, and Urban Affairs. A representative for Idaho Senator Mike Crapo, chairman of the committee, told Artnet News that no further updates are available. One source said the bill is unlikely to move forward before the end of the year. 

The US isn’t the only market where increased scrutiny of the art and antiques trade may have a big impact. EU dealers are awaiting more information about how the Fifth Money Laundering Directive, adopted in 2018 and taking effect in early 2020, will affect their approach to business. The guidelines are expected to require dealers to conduct anti-money laundering checks on transactions valued at €10,000 or more and to offer increased transparency around the final owner of a work of art. 

Even though the regulation is aimed at the EU, it will also raise the standard for US dealers doing business with member countries. And the UK has committed to adopting the new directive’s regulations regardless of what happens with Brexit, so the country’s market—the third largest in the world, behind the US and China—is expected to be affected as well, although implementation may be delayed due to the general election in December. 

“This legislation presents the art market’s biggest move to transparency since the introduction of online auction records,” says Susan J Mumford, CEO of Artaml, a technology company providing an online anti-money laundering tool for art market participants. “The reality is that illicit funds are entering the industry and governments are taking action. The result is that art dealers on the front line will be required to conduct checks on buyers at sensitive moments in the middle of transactions.”

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