Major changes for the antiquities trade are on the horizon for the U.S. in 2021, all in the name of cracking down on money laundering and creating more federal oversight over a market that's historically been underregulated.
At the start of the year, both the House of Representatives and the Senate overrode President Trump’s veto to pass the National Defense Authorization Act for 2021 (NDAA). Included in this bill is a law that will increase federal oversight of the antiquities market, making it more difficult for buyers and sellers to conduct their operations in secrecy, reports Zachary Small for the New York Times.
The new legislation will extend the 1970 Bank Secrecy Act, which tightened federal restrictions on financial transactions, to apply to antiquities dealers. Now, dealers will have to reckon with a number of anti-money laundering protocols, including a rule that requires the “ultimate beneficial owner” of a limited liability company to register with the federal government. This rule means that it will become more difficult for art buyers and sellers to obscure their identities through offshore entities and shell companies, reports Eileen Kinsella for artnet News.
“Long considered but only now passed, the bill is a significant step into regulating the U.S. art and antiquities market,” lawyer and art law specialist Nicholas M. O'Donnell notes in an analysis for Art Law Report.
The new law also directs the Financial Crimes Enforcement Network (FinCEN), a bureau within the Treasury Department, to conduct a study of money laundering in the art market in the next year. The FinCEN study will explain exactly how the new law will work and answer a number of outstanding questions about further regulations: for instance, the organization will need to define who exactly constitutes an “antiquities dealer,” O’Donnell writes.
Regulators have long feared that the opaque U.S. art market provides “fertile ground for money laundering and other illicit activities,” in part because buyers and sellers are rarely identified, Small writes for the Times. More broadly, many have called for stricter regulation of the international art market, as conflict in countries such as Syria and Iraq has contributed to a growing black market for looted cultural heritage artifacts worldwide.
“The proposed legislation will begin to close a major loophole,” Tess Davis, the executive director of the nonprofit Antiquities Coalition, tells the Times.
She adds that pawnbrokers fall under the purview of Bank Secrecy Act, but major auction houses such as Christie’s and Sotheby’s do not: “Why should the rules be stricter for a mom-and-pop business hawking stereos in Milwaukee than a billion-dollar auction house in Manhattan?”
Senate members have long criticized the U.S. antiquities market, O’Donnell notes. Last summer, Congressional investigators wrote a report that detailed how Russian oligarchs were able to evade U.S. sanctions and buy art using shell companies and an intermediary, as Graham Bowley then reported for the New York Times. In the report, the Senate labeled the art market the “largest legal unregulated market in the United States.”
However, many in the art world argue that accusations of money-laundering in the antiquities trade are overblown. “Virtually all transactions of high-dollar amounts in the ancient art business are handled through financial institutions and instruments already covered by the Bank Secrecy Act,” Randall A. Hixenbaugh, the president of the American Council for the Preservation of Cultural Property, tells the Times. “Criminals seeking to launder ill-gotten funds could hardly pick a worse commodity than antiquities.”
Many antiquities dealers have opposed the new regulations. Some continue to call for reduced or scaled regulations, arguing that the financial and logistical burdens of federal oversight will place undue stress on small businesses, as the Art Dealers Association of America (ADAA) notes in a statement accessed by artnet News.
“The new regulations raise questions about the cost benefit balance of compliance,” writes O’Donnell.
“But leave no doubt after last year’s Senate report,” he adds, “that regulators have the art market in their sights and the market must respond if it wants to have a say in the oversight that is sure to come.”
#History | https://sciencespies.com/history/how-a-new-law-will-impact-the-u-s-antiquities-trade/
No comments:
Post a Comment