FinCEN Signals Suspicion of Art Market Even Before AML Study Begins
Nicholas O’Donnell, 24 March 2021
In connection with the late-2020 amendment to the Bank Secrecy Act (BSA) to include “dealers in antiquities” as a result of its inclusion in the National Defense Authorization Act (NDAA), the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued a notice of “Efforts Related to Trade in Antiquities and Art.”
The notice is a combination of guidance to entities now covered by the BSA, but it is also a potential backdoor around the entities that Congress chose not to regulate with respect to potential or perceived money laundering risks: art dealers. It also raises concerns about the objectivity of the forthcoming study of the art market that Congress instructed FinCEN to conduct. In either event, it is further evidence that momentum continues to gather for stricter oversight and regulation of the U.S. art market, and the importance of the art trade demonstrating more transparency and diligence if it hopes to modify or mitigate that regulation.
As I’ve explained here and in a January article in The Art Newspaper, the NDAA brought “dealers in antiquities” within the Bank Secrecy Act’s requirement to file Suspicious Activity Reports (SARs). Banks, of course, are the primary object of the Bank Secrecy Act, and they are already obliged to file and do file SARs
What this new notice does is an interesting bridge from what the legislation does to where FinCEN clearly believes legislation is going. It states, “Financial institutions with existing BSA obligations, including the reporting of suspicious activity, should be aware that illicit activity associated with the trade in antiquities and art may involve their institutions.”
