Welcome to the AML Regulations and the Art Market: Our Comparative Study by Jurisdiction (1st ed) is Published

December 6, 2023

By Andrew Adams

The art market’s reinventions, experimentations, and expansions in media, in collectability, in content, and in location create a constant churn of novel financial problems to solve and opportunities to seize. No surprise, then, that the art market presents the same novelties of form that characterizes other emerging financial markets, and indeed has incorporated financial instruments in the form of non-fungible tokens into new artistic media. No surprise, too, that the art market provides the immediate subject of growing interest by financial regulators and law enforcement.

The European Union’s 2018 spotlight on anti-money laundering in the art market resulted in the 5^th Anti-Money Laundering (AML) Directive, a supranational effort that has sparked a still unfolding series of Member State efforts toward implementation. In the United States, the Anti-Money Laundering Act of 2020 similarly promulgated an expansion of AML regulation into the cultural property space, focusing specifically on antiquities markets, and the implementation of that new statute still hovers in the regulatory rulemaking process. Presciently perhaps, the U.S. AML Act arrived in the 2020 National Defense Authorization Act (NDAA), and indeed AML compliance and enforcement, including within the art market, has been a hallmark of the United States’ public discussion of national security interests in the wake of the original Russian invasion of Ukraine in 2014 (as with the U.S. Senate’s Committee on Homeland Security and Governmental Affair’s Staff Report on the art market and U.S. sanctions). The theme of linking AML, art, and national security resurged with the full-scale war launched by Russia against Ukraine in February of 2022, and has formed a key focus of efforts by U.S., U.K., and EU officials, in particular, in seeking to make transparent what many in government perceive to be a uniquely opaque corner of the global economy. 

The Center’s first edition of “Anti-Money Laundering: Regulations and the Art Market” is a valuable resource and one that will only grow in importance as the Center’s country-by-country review expands and responds to novel laws and regulations. With contributions from over a dozen contributing experts, the first edition provides a needed and focused overview of laws on AML due diligence obligations, beneficial ownership registration, and the civil and criminal sanctions that can flow from violations in each covered jurisdiction. As the Center’s efforts to identify expertise and compile information on the current state of AML in the U.S., U.K. and E.U. progress, the utility of this resource for practitioners, for collectors, and for regulators looking to understand the practices and requirements outside their home country will become of increasing utility. Against a globally shifting array of laws, regulations, and enforcement priorities, public and private actors of all stripes in the cross-border art market benefit from the expertise and attention given to these issues by the Center, and we should all look forward to the editions to come.

About the Author:

Andrew Adams, advisor to the Center for Art Law since October 2023, is a partner at Steptoe (NYC). His practices focuses on the areas of government and internal investigations, corporate governance, and white collar and regulatory matters. His practice includes a particular focus on anti-money laundering compliance, U.S. economic countermeasures and national security crisis response, drawing on Andrew’s time as the inaugural Director of the Department of Justice’s Task Force KleptoCapture, a multi-agency response group focused on the economic sanctions and export controls imposed in response to Russia’s invasion of Ukraine.