ML/TF Legislation for Art Industry Labeled ‘Damaging and Unjust’

Cinoa, the international art & antiques dealers’ association has issued an open letter signed by seven art trade groups calling for a review of AML/CFT policy.

“The US Treasury Report is the latest report looking into possible links between money laundering and terrorism financing through the trade in works of art, for the purpose of advising Congress on anti-money laundering measures,” says Erika Bochereau, Cinoa’s secretary-general. 

“What does it conclude? That the justification for urgent and wide-scale measures is not there, the risks for the majority of the art market are very low and proposals to regulate the market should be delayed until the US government has dealt with the more pressing problem of shell companies and real estate.”

The letter points out eight reports produced in recent years linking the art market to money laundering and terrorist financing. Five have been funded by governments: Germany’s Illicit report (2015); the European Commission reports, Deloitte (2017) and Ecorys (2019); and, in the US, The Rand Organisation Report (2020) and US Treasury Report (February 2022). It also cites three other reports—a study by King’s College, London, into Islamic State (IS) financing (2017), the World Customs Organisation (WCO) Illicit Trade Reports, and the 2020 Trade-Based Money Laundering report by The Egmont Group.

In Bochereau’s view, the lack of hard evidence produced by any of these reports linking trafficking, terrorism financing, or money laundering to the art market means that authorities should stop targeting “dealers, collectors and auction houses with wave after wave of damaging and unjust legislation.” Policymaking is, the letter says, “being driven by assumptions and false claims.”

One of these “false claims” is the widely-cited Unesco figure that the annual value of the trafficked cultural property is $10bn.

“Cinoa spends a considerable amount of time explaining to policymakers why some art-related legislation harms the art market and does not target the real problems,” Cinoa’s president, Clinton Howell, tells The Art Newspaper. 

“There is a lot of misinformation which is reiterated by the press and used by lawmakers. Many of the issues could be eliminated if there is more fact-checking of the data and a better understanding of the problems. Our goal is a fundamental review of policy-making taking into account our five recommendations.”

Suggested read: Art Dealers Urged to Intensify Regulatory Actions Against Money Launderers