Fine art giants team up for AML awareness drive

Rediscoveries of valuable works in suspicious circumstances prompt art world’s top brands to pen anti-money-laundering guidelines

Some of the biggest corporates behind the lucrative trade in fine art and antiquities have joined forces to draft a set of anti-money-laundering (AML) measures for the industry.

Launched on 26 January, the Responsible Art Market (RAM) scheme is backed by global auction house Christie’s, inspection and verification firm SGS Group and huge Geneva warehousing complex Ports Francs – also known as Geneva Free Ports, the site of several suspicious art and antiquities finds in recent years, such as:

1. March 2014 45 cases of rare Etruscan artefacts – including vases, busts, bas-reliefs and two, earthenware sarcophagi – which investigators found had been unearthed in a spate of illegal looting across a number of Italian archaeological sites in the 1970s and 80s;
2. April 2016 Long-lost, $20m Modigliani painting Seated Man With a Cane – allegedly stolen from Paris by the Nazis during World War II – the location of which came to light after its current owner was identified in the dramatic Panama Papers leak; and
3. November 2016 A cache of ancient relics, including two funereal bas-reliefs and a head of Aphrodite, that had been looted from the Syrian city of Palmyra.

In the third case, Swiss prosecutors suspected that Western dealers had purchased the artefacts from ISIS during the terror group’s recent occupation and vandalism of the famous World Heritage site.

That instantly linked the recovered pieces to terrorist financing.

Mindful of those rediscoveries, RAM has published a set of voluntary guidelines that it hopes will be adopted across the art world, providing advice on a range of issues, such as know your customer requirements, identifying beneficial owners, conducting enhanced due diligence and spotting red flags.

Former Christie’s legal director Mathilde Heaton – who helped to pen the guidelines – told Bloomberg: “The idea is to make sure people understand what the threat is – and it is a real threat facing the art market.”

RAM was formally unveiled at an AML seminar during the recent artgenève fair. The event aired remarks from a variety of stakeholders, including law-enforcement professionals.

In the view of Geneva-based prosecutor Jean-Bernard Schmid, “The art market makes it easier than other businesses to launder the proceeds of crimes, and to introduce cash generated by illicit activities into the legitimate economy.

“If we go to an art dealer and we cannot reconstruct who the client is, where the money is from, if the work of art was bought with cash, or if invoices have disappeared, I cannot do my job.”

Sandrine Giroud, co-director of the Art Law Foundation – another RAM backer – said: “Our aim is to raise awareness of the risks faced by the art industry in Switzerland and abroad. People in banking know all about knowing your client, but it also applies to the art world.

“You need to be very careful when dealing with politically exposed persons. Where are they from? Are they from a more challenging jurisdiction? Is the client a legal structure – and who is the ultimate beneficial owner? It’s a complex world and confidentiality makes it more difficult.”

Find the RAM guidelines here.