The U.S. Department of the Treasury has released findings from a study exploring illicit financing in the high-value art market, determining evidence of money laundering risk within the market.
“As we tackle systemic challenges like corporate transparency and other loopholes that allow criminals to abuse the U.S. financial system, we will look at what else might be needed to address money laundering risks specific to other industries, including the art industry,” said Scott Rembrandt, deputy assistant Secretary for Strategic Policy in the Office of Terrorist Financing and Financial Crimes.
The scope of work, mandated by Congress in the Anti-Money Laundering Act of 2020, involved studying examined art market participants and sectors of the high-value art market, potentially presenting money laundering and terrorist financing risks to the domestic financial system.
Additionally, the analysis identified approaches government agencies, regulators, and market participants could take to reduce the laundering of illicit proceeds through the high-value art market.
Study recommendations focusing on non-regulatory and regulatory options include fostering the creation and private sector information-sharing programs to encourage transparency among art market participants; updating law enforcement, customs enforcement, and asset recovery agencies guidance and training; and using Financial Crimes Enforcement Network (FinCEN) recordkeeping to support information collection and enhanced due diligence.
The Treasury Department conducted interviews with art market participants, government personnel, international partners, and academic and non-governmental organizations to collect data for the study.