In a study published pursuant to the Anti-Money Laundering Act of 2020, Treasury (i) examined aspects of the high-value art market that could present money laundering risks, and (ii) described efforts by regulators and market participants to prevent or mitigate money laundering risk in that market.
Treasury found that the market participants that are most vulnerable to money laundering in the art market include businesses that offer financial services, such as art-collateralized loans, and those that are not subject to anti-money laundering/countering the financing of terrorism ("AML/CFT") rules. Galleries that have larger annual sales and regularly transact in high-value art may present a higher risk. Further, the digital art market and its utilization of non-fungible tokens (or "NFTs") may present new risks.
To address the money laundering risks identified in the study, Treasury recommends several non-regulatory and regulatory options, including:
- encouraging private sector information-sharing programs to foster transparency;
- updating guidance and training for law enforcement, customs enforcement, and asset recovery agencies;
- using FinCEN recordkeeping authority to support information collection and enhanced due diligence; and
- applying AML/CFT requirements (such as suspicious activity reporting and know-your-customer procedures) to certain art market participants.
Primary Sources
- U.S. Treasury Press Release: Treasury Releases Study on Illicit Finance in the High-Value Art Market
- Study of the Facilitation of Money Laundering and Terror Finance Through the Trade in Works of Art
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