ICT Views


How art and antiquities help the financing of terrorism

by: (Editorial Manager) on

In December last year, in a nondescript warehouse in Geneva, antiquities from some of the oldest civilisations on earth were seized by Swiss authorities. The irreplaceable objects were being housed in Geneva’s Free Port having arrived, via Qatar, in 2013 after being looted from Libya, Yemen and Syria.

The Free Port (thought to hold innumerable artistic treasures) has long been a tax-free holding place for valuable art and antiquities, some of which make their way to prestigious auction houses or private collections.

Art Pexels -photoThis wasn’t the first time that stolen artefacts had been held there, but the discovery of these goods in particular caused embarrassment in the Swiss art world, as their Syrian origin revealed an indirect link between the art industry and terrorist groups.  

Isis has been flogging looted treasures – reputedly their second-highest source of income - as a means of securing finance since its inception. (The Guardian discovered historical artefacts from Iraq and Syria on sale in London in 2015, though the practice has been going on for much longer).

Items looted in conflict zones are sold on by terrorists to fund their activities and further their operations. The artefacts usually make their way to Europe, some of which find a temporary home in Geneva’s Free Port. These items may then go on to be purchased at auction houses by an array of global buyers, usually anonymously.

French finance minister Michel Sapin has described free ports as a ‘weak link’ in the counter financing of terrorism, drawing attention to the dark underbelly of the international art market and directly referencing Switzerland. The country’s reputation as a stop-off point for stolen artefacts en route to London and New York has forced those in and around the industry to take action.

RAM

The Responsible Art Market (RAM) Initiative - established in 2015 in Geneva by the Art Law Foundation and cross-industry partners – released in January a set of 10 guidelines on combatting money laundering and terrorist financing in the art market. Founding members include Christie’s and Seydoux & Associés Fine Art, with Mathilde Heaton, former Christie’s legal director, helping draft the guidelines, which are voluntary and intended as means of sharing best practice.

Knowing your client and performing due diligence checks provide the backbone of the guidelines; risk assessments, a risk-based approach, staff training and ‘red flags’ are also encouraged. These are standard measures that are widely applied across the financial services industry, so why has it taken so long for the procedures to trickle down to the art market?  

It has something to do with the unique make-up of the art auction industry. Establishing guidelines has been tricky for an industry that thrives on secrecy and anonymity, where unknown buyers are willing to spend lots of cash in return for privacy. This confidentiality culture makes the art market tick, but it is also its principal vulnerability, leaving Thomas Christ of the Basel Institute on Governance to describe the market as ‘an ideal playing ground for money laundering’.

The Basel Institute, interestingly, had initially helped RAM in the crafting of its guidelines, but pulled out of the project because they believed the guidelines, which are for the Swiss market only, should have global reach. ‘Collective action only makes sense if the major players in the market subscribe to them and hold people accountable,’ Christ said. In addition the Institute felt that it was a major weakness that the guidelines have no means of being effectively enforced.

In London a seminar, joint hosted by Art Market Minds and law firm K&L Gates, sought to establish awareness and generate discussion around managing risk in the art industry. Art market advisor Ivan Macquisten described self-regulation as becoming ‘more and more important’, something that could be surmised from the fact that such a meeting was being held at all.

Others within the industry are also acting. Sotheby’s and Christie’s both have compliance checks already in operation, and Christie’s directly addresses the issue of looted antiquities from Syria and Iraq on its website. These measures, along with RAM’s Guidelines, represent a solid base, but more thorough and widespread measures will need applying if the art market is to avoid further reputational damage. 

 

Would you like to develop your knowledge?

The ICA Certificate in Combating the Financing of Terrorism provides a foundation knowledge of the meaning of terrorist financing and proliferation, an introduction to the legal frameworks associated with global counter-terrorist financing strategy and an overview of the key terrorist financing threats and risks.

Tags :

Categories :

0 Comments :

Comment

Comments closed

Archive

Tel: +44 (0)121 362 7534

Blogger facebook LinkedIn Twitter youtube google + Trust Pilot

© 2017 – International Compliance Training Ltd, a division of Wilmington plc. International Compliance Training Ltd, is a company registered in England & Wales with company number 4363296 GB. Registered office: 6-14 Underwood Street, London, N1 7JQ. VAT NO.GB 899 3725 51