A small addition to an existing US law could have big implications for American art dealers and the art market at large.
A Congressman has proposed adding “dealers in art and antiques” to the list of businesses that are subject to strict anti-money laundering and other financial compliance rules. If the bill passes, dealers will need to prepare for a lot more paperwork—and scrutiny.
Last Friday, Representative Luke Messer of Indiana, who serves as Republican policy committee chairman on the House Financial Services Committee, introduced a bill proposing that art and antique dealers be added to the Bank Secrecy Act, also known as the Currency and Foreign Transactions Reporting Act. The law was passed by Congress in 1970 and is overseen by a division of the US Treasury Department.
Screenshot of the new proposed addition to the Bank Secrecy Act
The news comes just over a month after the EU voted to adopt tighter restrictions on the art trade.
Although there is already increased government oversight of certain corners of the antiquities and cultural property sector, “this is the first type of regulation in the US that will affect the entire art market,” attorney Michael McCullough told artnet News. “It will have a major effect on dealers large and small.” Weeks after the EU restrictions passed, McCullough’s law firm Pearlstein, McCullough & Lederman sent a memo to its clients warning that legislators were zeroing in on American art dealers.
The Bank Secrecy Act holds numerous industries to stringent standards and would require the art trade to make serious changes, including requiring that dealers and other art sellers establish new compliance programs and customer due diligence and monitoring systems.
Under the new terms, dealers would be required to screen potential clients to make sure their names do not appear on lists provided by the Office of Foreign Assets Control, which tracks individuals, countries, and regimes that have been subject to economic sanctions by the US government. And they wold have to set up new processes to monitor and report suspicious activity and potential money laundering.
Neither Messer’s office nor representatives for the House Financial Services committee responded to artnet News’s request for comment by publication time.
The only thing that may have the art world breathing at least a small sigh of relief is how much further the proposed legislation has to go before it could become law. The bill must move through the House’s legislative process and a companion bill would have to be introduced in the Senate and move through the committee process there. The scope of the action could change dramatically during this period—or, the bill could fail to make it out of committee altogether.