Protecting Artists & Dealers From Money Laundering in the Art Industry

In an increasingly regulated environment, lawyers who represent clients in the fine art industry have to understand how to protect their clients from buyers who may be trying to use illegally obtained funds to purchase fine art. It is very difficult for art dealers to turn down an opportunity for a sale, but they need to be warned about “red flags” that may indicate that the buyer or investor is not bona fide. Fine art transactions in particular are a target for money launderers. Basic due diligence protocols can protect your client from unwittingly getting drawn into an illegal scheme, and can deter criminals from using your client’s legitimate fine art business to launder funds in the first place. This presentation will introduce art lawyers, gallerists, art dealers, collectors and artists themselves to established due diligence protocols to screen out bad actors used by businesses that have long been subject to anti-money laundering (AML) regulation, such as banks and other financial institutions. In addition, we will review the current regulatory environment in the US and internationally as they apply to the fine art industry, and discuss measures that need to be taken to ensure compliance.