Antiques trade should prepare for increased government scrutiny


Over the next few months, the U.S. Department of the Treasury will draft new regulations for the antiques trade that will lift some traditional secrecy regarding the ownership and provenance of items bought and sold, and it is likely that similar rules will be extended to the art trade in the coming year as well. The intention is to combat money laundering, which the government has identified in both the antiques and art trade. Last December, Congress voted to include antique dealers as financial institutions whose operations should be regulated by the Bank Secrecy Act – a 1970 statute that has already been extended at other times to include casinos, check cashing institutions and pawn shops.

The trade in American antiques “has become a matter of concern,” according to New York lawyer Michael McCullough, “as a number of cases have arisen in which stolen antiques have been recovered in the United States.” Some of the original sources of these objects, he added, were “problematic”, such as foreign governments and even the terrorist group ISIS, he adds. “There are a lot of questionable characters operating in places where there is little regulation.”

The Treasury Department, through its Anti-Financial Crime Network (FinCEN), is currently soliciting comments from those involved in the antiques trade on the type of regulations to be applied. Among the questions FinCEN seeks answers to is the monetary threshold that should be subject to regulation – should it be greater than $ 10,000, which is the amount adopted in the UK, or $ 100,000, for example – and whether the identity of the ultimate owner needs to be disclosed. It is not uncommon for items to be purchased by advisors on behalf of clients, for example, but who those clients are (a trust? A foreign government or a limited liability company) may be unknown to the antique dealer. .

Some players in the antiques trade have expressed concerns about the vagueness of the 2020 anti-money laundering law and the regulations that would be enforced. “Congress passed a law without indicating the extent of the problem it is trying to solve,” says Peter Tompa, a Washington, DC-based lawyer who represents several numismatic merchant organizations, some of whom sell antique coins. . “The term ‘antiques’ itself is not defined in the law. Antiques are different from antiques, so the problem can be very large or very small, depending on who we are talking about.

He also expressed unease over where information on individual buyers should be stored by dealers and with which government agencies it will be shared. “You don’t want to scare off buyers. “

According to authorities, reducing secrecy is the ultimate goal of the new law, which also calls on FinCEN to investigate the need to regulate the art trade. There is little doubt on either side that new rules for disclosing the identity of art buyers and the sources of their money and artifacts are coming.

“I tell clients who don’t want to give out a lot of information, who want to be more private, that they’re going to have to feel comfortable,” said Diana Wierbicki, partner at New York law firm Withers. who directs its global artistic practice. “It will become a normal protocol. “


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