The Financial Times believes the art world is vulnerable to money laundering.This commentary by Marion Maneker is available to AMMpro subscribers. (The first month of AMMpro is free and subscribers are welcome to sign up for the first month and cancel before they are billed.)
The Art of Money LaunderingIn a long essay in the weekend’s Financial Times, Janet Dalley, the salmon sheet’s Arts Editor, claims the UK’s new application of anti-money laundering (AML) protocols to the art trade have “landed like a bomb.” The problem with the “long read” is the fact that although the press harps on the idea that art market is a major venue for money laundering there is very little evidence of it taking place in the $60-billion-a-year industry. If it did, there’s good reason to believe that we would already have seen the economic effects of extensive money laundering on price volatility. “Daniel Bruce, chief executive of the anti-corruption watchdog Transparency International,” she writes, “last year described the UK as a ‘safe haven’ for money launderers, especially in the ‘luxury’ sectors of art, property and other expensive goods.” Yet the article produces evidence of only two cases of art being used for money laundering over the last 20 years. Money laundering in real estate, the “property sector,” has been a notorious problem for many years. The sheer size of the real estate market, the increasing prevalence of transactions involving large sums and their international nature in certain cities made real estate convenient for money laundering. In the United States, it is particularly easy to hide real estate transactions by constructing an limited liability corporation that whose ownership can be traded privately without leaving a public record of a high-value transaction.
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