Art Regulation and Money Laundering

The Financial Times recently published a short post on the perceptions of regulations and regulating the art market. From a recent London Art Business Conference one speaker stated the art market is regulated and cited over 167 laws and regulations concerning the sale and trade of fine art. With so much money now involved in art sales, there is a growth in money laundering and with the added interest by law enforcement and of course regulators.

The Financial Times reports

The subject of regulation of the art market and money laundering has never been more pressing, particularly since economist Nouriel Roubini brought it up at Davos this year. So it was inevitable that a number of panels at last week’s Art Business Conference in London [disclosure: I was conference chair] tackled this thorny subject. Specialist lawyer Pierre Valentin disposed of the notion that the market is totally unregulated: “The idea that it’s a lawless free-for-all is complete nonsense,” he said, citing the 167-plus laws and regulations that impact on the art trade. Michael Martin of Deloitte Luxembourg, a money laundering investigator, pointed out that until recently, regulatory authorities paid scant attention to the art market. Now, things have changed: “There is strong interest [by regulators] in addressing the money-laundering risk in art,” he said, quoting Stiliano Ordolli, head of the Swiss money laundering reporting office, as saying, “There must be a real regulation of the art market, if only to protect the honest traders.” Art dealers want more government regulation about as much as turkeys look forward to Christmas. The conference heard that the alternative is greater co-operation within the existing structures of associations such as the British Art Market Federation, but with more effective sanctions. If the trade wants to change negative perceptions of its industry, it must clean up its act, said Valentin — notably in areas such as undisclosed conflicts of interest, lack of transparency and insider dealing. All very good, no doubt, but I’m not holding my breath.

Source: The Financial Times