Congress Poised to Apply Banking Regulations to Antiquities Market
05 Jan 2021

The antiquities trade, which regulators have long feared provided fertile ground for money laundering and other illicit activities, will be subject to greater oversight under legislation passed by Congress on Friday when it overrode President Trump’s veto.

The provisions tightening scrutiny of the antiquities market were contained within the sprawling National Defense Authorization Act, which Mr. Trump vetoed last week and which the House and Senate voted to override on Monday and on Friday.

Regulators have long worried that the opacity of the antiquities trade, where buyers and sellers are seldom identified, even to the parties in a transaction, made it an easy way to shroud illicit transfers of money. The new legislation empowers federal regulators to design measures that would remove secrecy from transactions.

“We believe this type of legislation is long overdue,” said John Byrne, a lawyer with 30 years of experience in anti-money-laundering rules. “This is an area where clearly organized crime, terrorists, and oligarchs have used cultural artifacts to move illicit funds.”

Dealers resisted the move. But with the new legislation, Congress moved to broaden the 1970 Bank Secrecy Act, which increased federal scrutiny of financial transactions, to include the trade of ancient artifacts.

Exactly how the new law works will be determined over the next year by the Financial Crimes Enforcement Network, a bureau within the Treasury Department, in consultation with the private sector, law enforcement and the public. Legal experts expect that the new antiquities regulations will be similar to others governing the precious metal and jewelry industries, where certain transactions are flagged to the authorities, who then determine whether they are suspicious. The law also seeks to end the use of shell companies to conceal the identities of buyers and sellers.

Sponsors of the new measure described it as a much-needed reform.

“Over the last decade, we’ve been working with all the industries and stakeholders to build a bill that satisfies everyone,” said Representative Carolyn B. Maloney, a New York Democrat, who introduced the Corporate Transparency Act in 2019 and later shepherded that bill into the defense package. “We are at a point that we’ve built so much support that it became impossible to oppose the bill.”

The Corporate Transparency Act faced opposition from antiquities dealers, who balked at the requirement to disclose client information and at the added costs of complying with the law. The art industry has fought similar legislation that would have extended the Bank Secrecy Act into the art market.

Federal disclosures show that the auction house Christie’s has paid lobbyists more than $100,000 over the last two years to influence the outcomes of such measures. A spokeswoman for the auction house, Erin McAndrew, said that its compliance department already maintains standards to protect against money laundering that were adopted by the European Union in 2018.

She said that “Christie’s welcomes the opportunity to work with U.S. regulators on appropriate and enforceable” guidelines to combat money laundering in the art market.

Watchdogs have urged Congress to tighten regulations on the antiquities trade for years. The looting of cultural heritage sites in countries like Syria and Iraq has resulted in a growing black market for Middle Eastern antiquities. Law enforcement abroad has seized hundreds of artifacts, which officials believe trace back to earlier excavations carried out by terrorist groups like ISIS.

By Zachary Small, The New York Times, 1 January 2021

Read more at The New York Times

Photo (cropped and edited): Giovanni Dall’Orto, via Wikimedia Commons

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