from increased tourism.[1] Fairs also expose current collectors to many different galleries and artists in one location, therefore avoiding the inconvenience of traveling between different locations.[2] The 2019 Art Basel Miami Beach art fair, for example, hosted 269 galleries from 33 countries in the Miami Beach Convention Center.[3]
E. Voluntary Anti-Money Laundering and Sanctions Programs in the Art Industry
As explained earlier, under current U.S. law, the art industry is not legally required to comply with the same anti-money laundering requirements as certain financial institutions listed in the BSA.[4] The BSA authorizes the Treasury Secretary to require those financial institutions to file "certain reports or records. where they have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counterintelligence activities, including analysis, to protect against international terrorism."[5] In addition, the BSA states that "in order to guard against money laundering through financial institutions, each financial institution shall establish anti-money laundering programs, including, at a minimum—
- the development of internal policies procedures, and controls;
- the designation of a compliance officer;
- an ongoing employee training program; and
- an independent audit function to test programs."[6]
Although the provisions of the BSA do not apply to the art industry, all U.S. citizens and companies must comply with U.S. sanctions programs.[7] Under IEEPA for example, any U.S. citizen or entity that conducts business with a person on the SDN list is subject to criminal and civil liability.[8]
- ↑ Y-Jean Mun-Delsalle, The Art Fair Boom Is Forever Changing the Way the Art Market Does Business, Forbes (Apr. 7, 2016), https://www.forbes.com/sites/yjeanmundelsalle/2016/04/07/the-art-fair-boom-is-forever-changing-the-way-the-art-market-does-business/#3589bb5d6c64.
- ↑ James Tarmy, Art Fairs Are Popping Up Everywhere. Do They Make Any Money?, Bloomberg (Mar. 6, 2018), https://www.bloomberg.com/news/articles/2018-03-06/art-fairs-are-popping-up-everywhere-who-profits.
- ↑ Annie Armstrong, Art Basel Miami Beach Will Feature 269 Exhibitors in December, Art News (Sept. 11, 2019), https://www.artnews.com/art-news/news/art-basel-miami-exhibitor-list-13211/.
- ↑ For the complete list of entities that fall under the definition of a "financial institution" and therefore must comply with the Bank Secrecy Act, see 31 U.S.C. § 5312 (a)(2).
- ↑ 31 U.S.C. § 5311.
- ↑ 31 U.S.C. § 5318(h)(1)(A)-(D).
- ↑ 50 U.S.C. § 1705(a).
- ↑ 50 U.S.C. § 1705(b)-(c).
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