This Week in AML

FinCEN Reminds FIs About Trade in Antiquities and Art

This week, Executive Vice President John Byrne, and Creative Director Elliot Berman of the AML RightSource staff talk about the notice from FinCEN about its efforts around trade in antiquities and art. John and Elliot discuss the activities that FinCEN is undertaking in this area, some of the resources which are included in the notice, and FinCEN’s guidance about the elements of an effective SAR narrative about antiquities and art.


Here are links to the notice and several useful resources from the Antiquities Coalition:


One Year Later: COVID-19 and Cultural Racketeering

Financial Crimes Task Force


FinCEN Reminds FIs About Trade in Antiquities and Art TRANSCRIPT

Elliot Berman: Hey, John, how are you this week?

John Byrne: Hi, Elliot. Good, thanks.

Elliot Berman: So this week, FinCEN put out a notice. I'm wondering whether this will be the first of a series of them that talks about informing financial institutions about efforts related to trade and antiquities and art. And it focuses in on the sections of the AML Act that talk about those issues and then on some other things. So I'm assuming you saw that notice.

John Byrne: Yeah. What was interesting about it [was] the task force that, that I co-chair with, Dennis Lormel for the antiquities coalition, we actually were meeting to figure out what would be a good opportunity to meet with FinCEN staff, as everybody does prior to a rulemaking, to discuss the issue of art and antiquities, and then this was issued - not subsequent to any contact from us, but it was very timely.

So I thought a couple of things about this jumped out at me. One is, a notice like this is the sort of thing that you have to give FinCEN credit for recognizing that people know that the legislation requires a regulation within a certain period of time, and also requires a study. Giving the community an update on what's going on is very helpful. So both the fact that the regs (regulations) will come out on advanced notice, [and that] they'll capture information, [and] then a final rule-making on antiquities, and then separately that there's a study about the potential of money laundering through trade and works of art - which I personally believe they're absolutely going to see that that's the case - I think this is very helpful. They have a lot on their plate. There's a lot of other studies and strategies in the legislation, so I think this was both timely and pretty important.

Elliot Berman: Yeah I agree with that. It was interesting. One of the things they did besides remind everybody about the fact that there are the potential regulation(s) [that] need to be created - regulations on antiquities and the arts study.

They also had a section that was providing links to a variety of resources for financial institutions who want to learn more about it, who feel that they're maybe not up to speed, which was really interesting. A lot of government stuff,  but some FATF stuff [as well] so they’re in a footnote, but you know, if you're [reading] the online version, those are live links, so that's really good.

And then the last thing they did, which I thought was helpful is they provided some clarification on how you might report potential issues in antiquities and in art, and if you felt you needed to file a suspicious activity report, I'm assuming you saw that.

John Byrne: Right, right. And going back to the source material, we were sort of disappointed they didn't include the antiquities coalition report, which is available on their website because it does give the financial sector a view into that world. But that'll be ongoing. So yeah, exactly - they give some direction that if you're going to file a SAR, some of the information that we're looking for is the transactions or possible transactions that were involved, the relevant information, the actual purchasers and sellers of the property, and intermediaries. If you can figure that out, the dollar amounts, the volume, any beneficial owners, - you know, are there shell companies involved - then in the case of stolen art, they talk about a detailed and specific description of these stolen items. And maybe you potentially have photographs [on file] of the items that they could be available if there's an investigation.

So I think a really good job by FinCEN in giving direction prior to a regulation, and prior to a, a conclusion, whether again, the use or the misuse of art, can assist in terrorism and other money-laundering related activities.

Elliot Berman: Right. And while I agree with all of your analysis about the likelihood that the arts study will generate a regulation, this was also a good reminder that reporting suspicious activity is just that - if an institution sees something suspicious and it meets their criteria for filing, the underlying subject matter doesn't have to be per se a crime - That's not a judgment the institution has to make. It just needs to provide sufficient information so that the readers of the filed report can decide whether an official investigation should be opened.

John Byrne: Yeah, that's a great point. And that's all we try to drive that home every time there's training about SARS. We're not experts in all these crimes – [we] can't be - but it's about the transactional aberrations and those sorts of things.

One of the things I wanted to reference Elliot, is as we are recording this, the antiquities coalition issued an update on a previous report that they did regarding COVID and cultural racketeering. So they have been able to do both anecdotally and specific examples, talk about a number of situations during the pandemic where there's been vandalism and looting of arts and antiquities, just because, you know, museums are closed, the security might not be the same.

And so they list a whole series of issues, [both] domestic as well as international. And just reminding everybody that, as we try to get past the pandemic, there are adjacent activities like the theft of these arts and antiquities that are still going on and it's still causing problems and being used in some cases, maybe in all cases, for illicit activity.

Elliot Berman: Yeah. Yeah. Great point. Um, and for those of you who are listening to this, on our website, you'll find links to the notice and to the two different reports tfrom the antiquities coalition. So you can reference those.

John, thanks again for another good conversation. And we'll talk again next week.

John Byrne: Stay safe.

Elliot Berman: Yep. You too. Bye-bye.