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On June 6, 2024, the first season of ANCHISE Talks delivered its third episode, a compelling webinar that delved into legislation around money laundering and the connection with the market of antiquities. The webinar ‘The role of the antiquities market in criminal money laundering’ saw the participation of over 70 professionals and researchers to the presentation by Benjamin Omer from Université Jean Moulin Lyon 3.
Main takaways from the webinar
Dr Omer started by saying that money laundering and illicit trafficking of cultural goods are intrinsically connected. The antiquities market occupies a gray zone between black markets and legal markets, distinguishing it from drug or arms trafficking. Traffickers aim to launder illicit cultural goods by giving them an appearance of legality to introduce them into the legal art market and maximize profits.
Two main types of money laundering can exist in the art market:
Laundering of cultural goods: This involves laundering the provenance of artworks and antiquities, mainly archaeological objects, through falsified documentation, restorations to give them a "museum look," exploiting the reputation of major art dealers, using free ports, shell companies, and tax havens, as well as involving intermediaries and complicit experts.
The case of the Nank sarcophagus, looted in Egypt and transiting through multiple countries before being acquired by the Metropolitan Museum of Art in New York, exemplifies this process.
Money laundering through cultural goods: This involves using high-value artworks to launder illicit funds from other crimes such as drug trafficking, tax fraud, and tax evasion.
Purchasing art objects with dirty money, followed by resale or obtaining loans on their value, allows for money laundering. The volatility and subjectivity of art market prices facilitate this form of laundering.
The art market is vulnerable to money laundering due to:
Lack of transparency, stemming from a tradition of secrecy and the use of shell companies and tax havens.
Difficulties in establishing provenance, even for restituted objects, due to the absence of complete documentation.
Complicity or passivity of some market actors, who fail to verify provenance or report suspicious transactions.
Weak due diligence obligations, at both European and national levels.
The European Union has implemented anti-money laundering and counter-terrorism financing obligations for art market actors, notably under the Fifth Anti-Money Laundering Directive. However, the implementation of these obligations is insufficient, as evidenced by the low number of suspicious transaction reports submitted to authorities. Some market actors also exhibit reluctance to comply with AML/CFT regulations, lobbying to avoid stricter obligations. Efforts to strengthen regulation and improve market transparency include the Council of Europe’s Nicosia Convention (2017), which establishes specific criminal offenses related to laundering cultural goods and falsifying documents. Also, national legislation in countries such as Germany (2016) and Italy (2021) enhances due diligence and provenance verification requirements. Art market initiatives like the Responsible Art Market Initiative develop guidelines to combat money laundering. Recommendations from the FATF (Financial Action Task Force) and other key institutions calling for stronger regulations and international cooperation.
In Dr. Omer view, there is the need for enhancement of due diligence obligations on objects, in addition to client due diligence, could represent a major step forward in combating cultural goods laundering. This obligation would involve a checklist for art market actors to ensure the objects they handle are not laundered. Research plays a crucial role in improving understanding of money laundering in the art market. Reliable data is needed to estimate the scale of the problem, identify trends, and assess the effectiveness of anti-money laundering measures. Strengthening collaboration between museums, art dealers, and researchers is essential to accelerate provenance verification processes and enhance market transparency.