The White House has just published a lengthy report discussing corruption and the sprawling impact it has on the public. It notes that corruption does not simply result in generating illicit wealth for shady actors… it corrodes public trust, subverts economic opportunity, and often contributes to human rights violations and abuses. Further exacerbating the issue is the globalized nature of today’s economy, and the disparity in regulatory oversight throughout the world – a dynamic that makes it difficult track and prevent corruption.
One particular market that was highlighted in the report, which should be no surprise to anyone, is art and antiquities. Aside from the market for those items, the report identifies the market participants as especially vulnerable to financial crimes. As it states, “built-in opacity, lack of stable and predictable pricing, and inherent cross-border transportability of goods, make the market optimal for illicit value transfer, sanctions evasion, and corruption.” It’s pretty hard to argue that point; when you factor in looting and fraudulent items, the art and antique market can be one of the shadiest industries in existence… and there is (was) no regulation or oversight.
As part of the AML Act (Anti-Money Laundering), which passed in 2020, the Treasury was instructed to study the “facilitation of money laundering, terrorism finance, and other illicit financial dealings through the trade in works of art.” That study was to be completed by the end of 2021… at this point, there hasn’t been much disclosed about further regulations, but one discussion involved classifying those involved in trading antiques as a financial institution. I cannot even imagine the headache of financial-type regulations being applied to the art and antiques market, but I’m not sure I have much say in the matter… in any case, we’ll see how this works out soon enough. As of Oct 25th, the public comment period ended and the Financial Crimes Enforcement Network (FinCEN) will offer their official Notice of Proposed Rulemaking in 2022.