The U.S. Treasury Department will propose new rules extending anti-money-laundering requirements to antiquities dealers, as part of recently passed defense-policy legislation.
A provision in the National Defense Authorization Act, approved Jan. 1, extends the application of the Bank Secrecy Act to antiquities market dealers and asks the Treasury secretary to implement regulations.
The provision also requests the Treasury Department to conduct a study on the facilitation of money laundering and terrorist financing through the art market before the end of the year.
The responsibility would likely fall to Janet Yellen, acting through the Financial Crimes Enforcement Network, Treasury’s anti-money-laundering unit. Ms. Yellen has been nominated by President Biden for Treasury secretary and awaits approval from the Senate.
The provision comes as lawmakers and law enforcement agencies recognize sales of antiquities, such as cultural artifacts, as a risk area for illicit finance, said Gregory Lisa, a partner at law firm Hogan Lovells U.S. LLP.
Antiquities sales have been used to finance terrorist organizations, law-enforcement officials and experts say.
“You’re allowing cross-border transactions, you’re allowing participants to transfer funds through the sale of either real or fake antiquities, without any controls around it,” said Mr. Lisa, a former interim director of the Office of Compliance and Enforcement at FinCEN
The defense legislation contained other provisions aimed at curbing illicit finance, including new requirements for ownership disclosures.
The law asks the Treasury secretary, in coordination with the Federal Bureau of Investigation, the Justice Department and Department of Homeland Security, to define the scope of the impending anti-money-laundering rules on the antiquities market. That would include spelling out who should be subject to the requirements, whether the rule would focus on high-value trade in antiquities and whether purchasers of high-value antiquities would need to be identified.
The rules are also expected to clarify whether dealers and other participants in the antiquities trade need to be identified and whether there should be exemptions to the rule.
The Treasury Department didn’t respond to a request for comment.
The new rules for the antiquities market could look like those for precious metals, stones and jewels, dealers and policy observers said.
Dealers in precious metals, stones or jewels are required to establish anti-money-laundering programs, according to a rule announced by FinCEN in 2005. The rules apply to dealers who have purchased and sold at least $50,000 worth of covered goods during the preceding year, according to FinCEN.
The anti-money-laundering rules for the antiquities market, as well as potentially the art market, might be stricter with a lower value threshold, said Polly Wilkins, an attorney representing high-net-worth individuals in international disputes and investigations at law firm Kobre & Kim LLP in London.
Write to Mengqi Sun at [email protected]
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