How Anti-Money Laundering Legislation Could Impact the Art Market

A resolution in the United States Congress suggests that galleries and auction houses could soon be subject to strict reporting requirements about their customers amid a global push for greater transparency in art transactions. While these requirements could have significant benefits in terms of helping to curtail money laundering by bringing greater oversight to an often opaque art market, the law could also burden dealers and auction houses with onerous administrative and reporting duties that will be especially challenging for smaller and mid-size galleries.In May 2018, the Illicit Art and Antiquities Trafficking Prevention Act(IAATP) was introduced in the United States House of Representatives and referred to the House Committee on Financial Services. The bill sought to apply the Bank Secrecy Act (BSA)to dealers in art and antiquities. The BSA, adopted in 1970, established record keeping, program, and reporting requirements for national banks, federal savings associations, federal branches, and agencies of foreign banks. The IAATP’s inclusion of art dealers among those responsible under the BSA would have required dealers to satisfy new reporting obligations and ensure that any potential clients are not being sanctioned by the Office of Foreign Assets Control. The IAATP bill did not pass, but a new House resolution may signal that it is still alive.

Source: Artsy

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