On May 18, 2018 Representative Messer proposed legislation (H.R. 5886) to add Art and Antiquities dealers to the financial reporting requirements of the Bank Secrecy Act (BSA). The proposed Bill was referred to the House Committee on Financial Services for further consideration.
Though no specific language or regulatory requirements were drafted to date, the intent of the Bill is to make transparent the parties to transactions and reveal the source of funds used for the purchase of art or antiquities to ensure such funds were not proceeds of illicit activity and do not provide financial support for terrorist organizations. The Bill adds language to the Bank Secrecy Act formerly called the “Currency Transactions Reporting Act of 1970”.
The Bank Secrecy Act (BSA), 31 USC 5311 et seq establishes program, recordkeeping and reporting requirements for national banks, federal savings associations, federal branches and agencies of foreign banks. It was amended to incorporate the provisions of the USA PATRIOT Act which requires every bank to adopt a customer identification program as part of its BSA compliance program. Under the Bank Secrecy Act (BSA) and related anti-money laundering laws, banks must
• Establish effective BSA compliance programs
• Establish effective customer due diligence systems and monitoring programs
• Screen against Office of Foreign Assets Control (OFAC) and other government lists
• Establish an effective suspicious activity monitoring and reporting process
• Develop risk-based anti-money laundering programs
The Department of Treasury, Financial Crimes Enforcement Network (FinCEN) is the government’s repository for reports of financial transactions in excess of established thresholds as well as Suspicious Transaction Reports (STR) and Suspicious Activity Reports (SAR) received from financial institutions. I don’t anticipate the extensive regulatory regime of the BSA to be imposed on the Art and Antiquity business sector though to what extent the art trade will be regulated is an open forum for now.
On May 8, 2018 I met with Senior Policy Advisors of the Senate Finance Committee. They wanted my expert opinion on the suggested legislation and their concerns over the significant financial transactions involving works of art and antiquities as well as the potential for such proceeds being derived from money laundering or the terrorist financing. I’m a Certified Anti-Money Laundering Specialist (CAMS) and understand the government’s long term goal of extending such financial regulations on other business sectors outside of financial institutions. Should you want to learn more, please call me at 212-973-7706 or via email at JMcAndew@ www.gdlsk.com.