The following excerpt written by Leila Amineddoleh, attorney and professor specializing in art and cultural heritage, is a timely look into money laundering risks that are on the rise due to the growing popularity in art investing.
"The art market continues to grow as more and more people view art as an investment. Whereas this isn’t inherently a legal or criminal problem, the nature of the market has changed, meaning that art market players are taking on roles typically devoted to financial institutions. An increasing number of merchants are loaning money to clients and lending against art, meaning that sums of money are moving under the radar.
With vast amounts of money circulating on an unregulated art market, it has become the perfect place to launder money. Anonymity and secrecy in the art market also isn’t necessarily bad, but some players have exploited the opaque nature of the art world to engage in criminal activity. For this reason, federal regulations are long overdue. There is no reason for art dealers to be exempt from regulations pertaining to dealers of valuable commodities. It will be particularly interesting to see how the Act defines 'dealer.' There are collectors who are not technically dealers who trade in millions of dollars of art each year."
- Leila Amineddoleh
A new bill introduced in the United States House of Representatives in May would extend the Bank Secrecy Act to the art and antiquities market, potentially costing dealers millions of dollars while bringing regulation to an industry often portrayed as a haven for money laundering and other financial crimes.