Give art market regulation a chance
| Published date | 01 June 2022 |
| Date | 01 June 2022 |
| DOI | http://doi.org/10.1177/1023263X221082509 |
| Subject Matter | Articles |
Give art market regulation a
chance
Anna Mosna
Abstract
The article discusses the extension by Directive (EU) 2018/834 of new compliance obligations to
art market participants against the background of a criminological examination of different types of
laundering operations occurring in the art market. It highlights how this sector is a potential hub
for ‘traditional’money laundering operations as well as the target of antiquities trafficking which
potentially finances other illicit activities such as terrorism. The relevance of an often-overlooked
laundering phenomenon –cleansing operations of illegally sourced art that can be defined as art
laundering –is stressed. In assessing whether introducing an anti-money laundering and counter-
terrorism financing regime into the art market can be considered a proportionate intervention,
the burden on stakeholders due to compliance obligations, on the one hand, and the need to pro-
tect values endangered by laundering and trafficking involving art, on the other is evaluated. In light
of the incidence of art crimes, in particular of art laundering, and of the potential for the new rules
to effectively prevent these activities due to a relatively low risk of displacement, the conclusion
reached is that the interests of supra-individual values, including that of cultural heritage, outweigh
the economic concerns of art market actors.
Keywords
Art laundering, money laundering, art market, art trafficking, antiquities trafficking, cultural
heritage protection, Fifth AML Directive, European criminal law
1. Introduction
In the wake of the recent terrorist attacks within the EU (e.g. Paris in November 2015 and Brussels
in March 2016) and following the disclosure by the ‘Panama Papers’of vast off-shore dealings,
Directive (EU) 2018/843 amending Directive (EU) 2015/849 on the prevention of the use of the
financial system for the purposes of money laundering or terrorist financing (Fifth AML
KU Leuven, Faculty of Law and Criminology, Leuven, Belgium
Corresponding author:
Anna Mosna, KU Leuven, Faculty of Law and Criminology, Tiensestraat 41, Leuven, Belgium.
Email: anna.mosna@kuleuven.be
Article
Maastricht Journal of European and
Comparative Law
2022, Vol. 29(3) 304–327
© The Author(s) 2022
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/1023263X221082509
maastrichtjournal.sagepub.com
Directive)
1
was issued in May 2018.
2
The new instrument intensifies anti-money laundering (AML)
and counter-terrorism financing (CTF) rules and introduces stricter requirements to ensure greater
transparency of financial transactions, and of corporate legal entities and trusts especially regarding
their beneficial owners.
3
In response to risks posed by both money laundering and terrorist financing, the new Directive
extends its regime to the art market also.
4
When it comes to the art market –a term that in this con-
tribution is used as an overarching concept including both the market for so-called ‘fine art’and the
market for antiquities
5
–these risks are typically identified in money deriving from criminal activ-
ities being laundered through the acquisition of expensive fine art,
6
on the one hand, and in antique
cultural objects being illegally traded by terrorist organizations, on the other.
7
The extension of AML and CTF rules to the art market has been harshly criticized by its actors,
especially by smaller businesses, due to the considerable administrative burden that these new obli-
gations appear to entail.
8
Similarly, legal and criminology scholars have expressed doubts as to the
measures which seem to imply administrative costs and procedures that are likely to impact legal art
transactions negatively, despite insufficient evidence of their effectiveness in terms of preventing
money laundering operations and terrorism financing.
9
With this criticism in mind, this paper intends to offer another point of view on the costs and
benefits of the extension of AML and CTF measures to the art market. To do so, a criminological
approach to money laundering and terrorism financing phenomena that are relevant for the art
1. Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/
849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and
amending Directives 2009/138/EC and 2013/36/EU, [2018] OJ L 156/43 (Fifth AML Directive).
2. European Commission, Statement by First Vice-President Timmermans, Vice-President Dombrovskis and
Commissioner Jourovà on the Adoption by the European Parliament of the 5th Anti-Money Laundering Directive,
(19 April 2018), https://ec.europa.eu/commission/presscorner/detail/en/statement_18_3429:‘in the aftermath of the ter-
rible terrorist attacks that struck the EU and the vast financial dealings uncovered by the “Panama Papers”, the
Commission decided to take urgent countermeasures. The revised directive is part of that action plan.’
3. Recitals 2 and 25 Directive (EU) 2018/843.
4. M. Heckel, A. Brandy and A. Chiariello, ‘Anti-Money Laundering Obligations and Solutions’, in Deloitte, Art &
Finance Report 2019 (Deloitte, 2019), p. 216.
5. In line with the use of ‘art’made in existing literature analysing the phenomenon of money laundering in the art market,
see S. Hufnagel and C. King, ‘Anti-Money Laundering Regulation and the Art Market’,Legal Studies (2019), p. 1, also
for the purposes of this paper the term ‘art’encompasses both the concepts of fine art and of antiquities.
6. See, among others, F.M. De Sanctis, Money Laundering Through Art: A Criminal Justice Perspective (Springer
International Publishing, 2013).
7. See, for example, Resolution 2199 (2015) adopted by the UN Security Council, 12 February 2015, S/RES/2199, point
16: ‘ISIL, ANF and other individuals, groups, undertakings and entities associated with Al-Qaida, are generating income
from engaging directly or indirectly in the looting and smuggling of cultural heritage items from archaeological sites,
museums, libraries, archives, and other sites in Iraq and Syria, which is being used to support their recruitment
efforts and strengthen their operational capability to organize and carry out terrorist attacks’; while the relationship
between antiquities trafficking and terrorism financing is not doubted in literature, it is however highlighted that its
importance and extent are not clarified by sufficient reliable empirical evidence, see N. Brodie et al., ‘Illicit Trade in
Cultural Goods in Europe: Characteristics, Criminal Justice Responses and an Analysis of the Applicability of
Technologies in the Combat against the Trade –Final Report’, European Commission (2019), p. 112.
8. E. Kinsella, ‘Art Dealers Push Back Against the European Union’s New Money-Laundering Regulations: Dealers Will
Now Have to Verify the Identity of Clients Buying Work for €10,000 or More’,Artnet (30 April 2018), https://news.
artnet.com/art-world/european-union-tightens-art-market-oversight-1275338.
9. H. Geiger and O. Wuensch, ‘The Fight against Money Laundering: An Economic Analysis of a Cost-Benefit
Paradoxon’,10Journal of Money Laundering Control (2007), p. 98.
Mosna 305
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