Art Market Monitor

Global Coverage ~ Unique Analysis

  • AMMpro
  • AMM Fantasy Collecting Game
  • Podcast
  • Contact Us

Is the Art Market Big Enough to Launder Money?

August 18, 2016 by Marion Maneker

Basquiat, Hannibal

Here’s an interesting take on international money laundering and the art market from the president of Transparency International in Malaysia. Unfortunately, it relies upon cobbling together “research” on money laundering and the art market that has appeared in a long string of flawed news reports.

Malaysia, of course, is ground zero for the 1MDB development fund scandal that is being investigated by several nations, including Singapore, Switzerland and the US. Compounding the issue has been the very visible reporting on Jho Low’s art purchases over the last several years. Low repeatedly appears among the constellation of individuals connected to the use of the 1MDB funds.

One reason to doubt the prevalence of money laundering in the art market is the lack of capacity. As the author unwittingly illustrates, the art market just isn’t big enough to accommodate much money laundering. He cites estimates that $2T in funds are laundered globally each year. A generous measure of the art market would be $75bn and that includes a huge portion of primary work that has no resale value.

So the best case argument would make the entire art market 3.75% of the global total for money laundered funds:

According to PwC’s Global Economic Crime Survey 2016, global money laundering transactions are estimated at two percent to five percent of global GDP – or roughly one to two trillion US dollars – annually. Yet, according to the United Nations Office on Drugs and Crime (UNODC), less than one percent of global illicit financial flows are currently seized by authorities.

The Art Market Report published by the European Fine Art Fair stated that transactions in fine art were worth US$75 billion in 2014. Lately, it is believed that illegal money pumped through art dealers and auction houses have contributed to the rise in the value of fine art

Money laundering and the art world  (Free Malaysia Today)

More from Art Market Monitor

  • How Strong Will the Dollar Get and What Will American Collectors Buy?How Strong Will the Dollar Get and What Will American Collectors Buy?
  • ArtList’s 3 Must See Shows: Still House Group, Stan Douglas & Daan van GoldenArtList’s 3 Must See Shows: Still House Group, Stan Douglas & Daan van Golden
  • A Pocket History of the Search for a Synthetic UltramarineA Pocket History of the Search for a Synthetic Ultramarine
  • Los Angeles Modern to Feature on October 12th Mike Kelley Drawing from Estate of Original OwnerLos Angeles Modern to Feature on October 12th Mike Kelley Drawing from Estate of Original Owner
  • de Pury-fiedde Pury-fied
  • Ars Longa, Banks BrevisArs Longa, Banks Brevis

Filed Under: General

About Marion Maneker

LiveArt

Want to get Art Market Monitor‘s posts sent to you in our email? Sign up below by clicking on the Subscribe button.

  • About Us/ Contact
  • Podcast
  • AMMpro
  • Newsletter
  • FAQ

twitterfacebooksoundcloud
Privacy Policy
Terms & Conditions
California Privacy Rights
Do Not Sell My Personal Information
Advertise on Art Market Monitor
 

Loading Comments...