Congress poised to apply banking regulations to antiquities market

NEW YORK (NYT NEWS SERVICE).- The antiquities trade, which regulators have long feared provided fertile ground for money laundering and other illicit activities, will be subject to greater oversight under legislation passed by Congress on Friday when it overrode President Donald Trump’s veto.

The provisions tightening scrutiny of the antiquities market were contained within the sprawling National Defense Authorization Act, which Trump vetoed last week. The House and Senate voted to override the veto on Monday and on Friday.

Regulators have long worried that the opacity of the antiquities trade, where buyers and sellers are seldom identified, made it easy to shroud illicit transfers of money. The new legislation empowers federal regulators to design measures that would remove secrecy from transactions.

With the new legislation, Congress moved to broaden the 1970 Bank Secrecy Act, which increased federal scrutiny of financial transactions, to include the trade of ancient artifacts.

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Exactly how the new law works will be determined over the next year by the Financial Crimes Enforcement Network, a bureau within the Treasury Department, in consultation with the private sector, law enforcement and the public. Legal experts expect that the new antiquities regulations will be similar to others governing the precious metal and jewelry industries. The law also seeks to end the use of shell companies to conceal the identities of buyers and sellers.

The Corporate Transparency Act faced opposition from antiquities dealers, who balked at the requirement to disclose client information and at the added costs of complying with the law. Federal disclosures show that the auction house Christie’s has paid lobbyists more than $100,000 over the past two years to influence the outcomes of such measures.

The looting of cultural heritage sites has resulted in a growing black market for Middle Eastern antiquities. Law enforcement abroad has seized hundreds of artifacts, which officials believe trace back to earlier excavations carried out by terrorist groups like ISIS.

The new legislation calls for a study on the role of art in money laundering and terror financing. Regulators have also signaled that the Bank Secrecy Act could be further extended into the art market.

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