An Anti-Money Laundering Bill That Could Have Profound Effects On The Art Market Just Takes A Big Step


This week, lawmakers in Washington moved closer to passing a sweeping anti-money laundering law that could have far-reaching effects on the art market.

The bill, known as Catalysts ActAmend the 52-year-old Bank Secrecy Act to require art and antique dealers, as well as lawyers, trust companies, public relations firms and others, to investigate potential customers and to report financial wrongdoing – protection against the wealthy hiding money and illegally acquired assets.

In other words, the law would introduce tough regulation into the notoriously unregulated art market. Dealers, advisers, galleries, auction houses and museums are all specifically mentioned in the text of the bill and would face new legal obligations if passed.

“Intermediaries in overseas transactions should be subject to the same anti-money laundering controls as banks, and that brings us a little closer,” said Republican Rep. Joe Wilson of South Carolina, who co-presented the bipartisan bill in 2021. International Consortium of Investigative Journalists (ICIJ). “No one should be able to hide behind blood money to exploit democratic institutions for their own benefit.”

On Wednesday, the House Armed Services Committee voted aloud to include the Enablers Act in the National Defense Authorization Act, a bill passed each year that outlines the Department of Defense’s budget. . The inclusion in the Defense Authorization Act makes it likely that the Enablers Acts will be approved by the House later this year.

If the law passes, it will be the most significant update to the nation’s anti-money laundering laws in two decades, according to another of its early sponsors, New Jersey Democratic Rep. Tom Malinowski. “It will make it much harder for the crooks and kleptocrats of the world to hide their money in America,” he wrote on Twitter.

The Senate Armed Services Committee passed its own version of the National Defense Authorization Act earlier this month. Lawmakers from both bodies will meet as a conference committee later this year to reconcile the two bills, a process that could decide the ultimate fate of Enablers Act this year.

Wilson and Malinowski, along with Representatives Maria Elvira Salazar (Florida) and Steve Cohen (Tennessee), introduced the Enablers Act last October, following the Pandora Papers investigation. The investigation, conducted by the ICIJ, revealed that more than 1,600 works of art by some 400 artists were used to secretly brewing money in tax havens during the last years.

In 2020, lawmakers also included the Business Transparency Acta bill that requires U.S. businesses must report their owners to the Treasury Department’s Financial Crimes Enforcement Network under the National Defense Authorization Act. This led to the passage of the act.

Notably, the bill also antique dealers required comply with the anti-money laundering provisions of the banking secrecy law.

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