Bill proposes to apply anti-money laundering regulations to the art market
On July 23, several U.S. senators introduced new legislation that would protect many professionals in the U.S. art market.
The Act – titled Art Market Integrity Law– The Bank Secrecy Act will be amended, requiring art dealers and auction houses to comply with anti-fines (AML) and counter-terrorism financing regulations. It also applies to art consultants, consultants, custodians, galleries, museums, collectors or “any other person engaged in a business for sale of art.”
If the Art Market Integrity Act becomes federal law, it will give the U.S. Treasury legal authority to embrace certain AML policies and safeguards such as conducting due diligence on clients, maintaining records and reporting suspicious transactions.
The document designated artwork of the Act includes “any original painting, sculpture, watercolor, printing, painting, photograph, installation art or video art” and does not include “product design, fashion design, architectural design or interior design or interior design”; or mass-produced decorative art, including ceramics, textiles, textiles, textiles, paper or collages. ”
The bill does not contain specific languages regarding furniture or antiques.
The lead authors of the bill are Sen. John Fettman (D-PA), representing Sen. Chuck Grasley (R-ia), Sheldon Whitehouse (D-RI), Bill Cassidy (R-la), Andy Kim (D-NJ) and David McCormick (R-PA).
The Fetterman office press release said the bill “is specifically targeting high-risk art market transactions, while exempting artists and businesses from annual art deals, which would align the United States with international standards already adopted by the UK, the EU, the EU and Switzerland to prevent the United States from becoming an illegal US for activities.”
The bill also provides that there are no single transactions over $10,000 and no $50,000 transactions involving artworks are tax-free. It also completely exempts artists from selling their own works as well as nonprofits.
“Art should be for art lovers, not terrorists and criminals,” Fettman said in a press statement.. “For a long time, the loopholes have allowed Russian crime cents to evade sanctions and terrorists like Hezbollah to remit money through art transactions.”
Last year, the Ministry of Finance believed that the art market was particularly vulnerable to money laundering and evading international sanctions. Several compelling cases have highlighted this issue over the past few years.
In 2023, art collector Nazem Ahmad was charged with violating and evading U.S. sanctions, trading $440 million in art and diamonds, and using proceeds to fund Lebanon’s terrorist group Hezbollah. Russian construction billionaires Arkady and Boris Rotenberg were able to purchase $18 million in art despite US sanctions imposed in 2014. In 2023, Russian oligarch and art collector Roman Abramovich also restored the trust that held the $963 million art collection he amassed in 2018 with his ex-wife, Dasha Zhukova, ahead of the invasion of Ukraine, protecting it from seizures caused by sanctions.
Last year, Dimitri Simes, a political adviser in charge of the U.S. Department of Justice and Russian TV writer Dimitri Simes and his wife Anastasia Sires violated U.S. sanctions through plans involving art and antiques.
The Art Market Integrity Act has been granted the Recovery Initiative of the Antiquities Alliance, the American Transparency Alliance, the Fact Alliance, the FDD Action, the American Jewish Commission, Ukrainian Lazom, the United States Ukrainian Union, Venezuelan Assets (INRAV), the National Border Patrol Commission and the Association of Federal Executives (Floy).
However, at least one expert did not have high expectations for the proposed legislation.
“The regulation of the opaque art market is urgently needed, but given the successful efforts of key players so far to limit their profits, I have little hope for this bill to succeed.” Artnews.
