Expanding U.S. Anti-Money Laundering Laws to the Art Market: A Proposal for a New Regulatory Framework

Mar 12, 2025 | HALO x ILJ Collaboration, Online Scholarship

Editor’s Note: This article is part of a collaboration between the Harvard Art Law Organization and the Harvard International Law Journal.

*Sarah Jane Kim

Introduction

The threat of money laundering remains a major global issue, with up to $2 trillion laundered annually—around 5% of global gross domestic product. The United States has adopted a framework to combat the risk of money laundering, the centerpiece of which is the Bank Secrecy Act (BSA). The BSA requires financial institutions, such as banks, money services businesses, and casinos, to take steps to prevent, detect, and report money laundering activity. While comprehensive, the BSA does not apply to all entities that could facilitate money laundering in the United States, notably excluding the art market.

The global art market’s features make it highly susceptible to money laundering, such as the easy transport of high-value items; use of third-party intermediaries to transact and store art; subjective nature of valuing art; culture of secrecy and lack of transparency embedded in the art industry; and the continuing rise of private sales in the art market. The $65 billion U.S. art market is particularly vulnerable as it is “the largest, legal unregulated industry in the United States.”

Despite its efforts to expand the BSA’s application to additional entities, the United States has opted against regulating the art market, relying instead on voluntary self-policing. The lack of U.S. Anti-Money Laundering (AML) regulation in this industry is especially concerning, considering that the United States is the leading market in art sales worldwide. Given the threat, the United States should immediately take steps to extend AML regulations to core art market participants (AMPs), including dealers, galleries, and auction houses. 

This article explores U.S. AML regulatory efforts toward the art market, compares them to the frameworks of the United Kingdom (U.K.) and European Union (E.U.), and highlights the issue with the U.S. art market’s self-regulation. The article then presents a path forward for U.S. AML efforts with a proposal for more effective and practical regulation. 

U.S. AML Framework and Recent Proposals

In the United States, the BSA mandates that financial institutions implement AML programs, according to a five-pillar framework: (1) designation of a compliance officer; (2)  development of internal AML policies; (3) proper employee training programs; (4) regular, independent, risk-based audits; and (5) implementation of customer due diligence (CDD). The BSA’s definition of “financial institution” has expanded over time to cover non-bank entities such as the real estate industry and pawnbrokers, but excludes participants in the high-value art market despite several attempts. Ultimately, the United States has extended AML regulations only to the antiquities market, while the EU’s AML laws include the art market as a regulated sector. 

Attempts to apply the BSA to the art market include the Illicit Art and Antiquities Trafficking Prevention Act (IAATP), introduced in May 2018. It would have amended the BSA to classify “dealers in art or antiquities” as a “financial institution,” thereby obligating art dealers to comply with AML measures, including Know Your Client (KYC) checks and reporting cash transactions over $10,000. However, the law did not pass. It faced opposition from many art professionals due to its burdensome requirements, especially on smaller players such as antique and ancient art dealers, including the low thresholds it had proposed for Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs), as well as its imposition on the privacy of art collectors.

In January 2021, Congress passed the Anti-Money Laundering Act of 2020 (AMLA 2020) as part of the 2021 National Defense Authorization Act (NDAA). Section 6110 of the AMLA 2020 extended BSA provisions to antiquities dealers but not the art market.¹1 In response to FinCEN’s question on how an antiquity is distinct from a work of art, Christie’s provides a useful answer: “Antiquities generally refers to man-made archaeological material and cultural artifacts considered integral to a country’s history or heritage (e.g., statuary in stone, bronze and terracotta; vases in pottery, bronze, stone or glass) created from ‘antiquity,’ which usually refers to the ancient past before the Middle Ages (no later than 450 A.D.).” The AMLA 2020 directed FinCEN to examine the high-value art trade to determine whether the BSA provisions should also cover AMPs. While a 2022 study by the Department of Treasury acknowledged risks of abuse in the high-value art market, it recommended prioritizing other sectors such as real estate and nonfinancial gatekeepers before turning to the art market.

In July 2022, the U.S. House of Representatives passed an amendment to the 2023 NDAA, the Establishing New Authorities for Business Laundering and Enabling Risks to Security Act (ENABLERS Act). It would have imposed AML requirements on art dealers and auction houses and expanded the BSA’s KYC and CDD requirements to include lawyers, investment advisors, and other intermediary entities. However, the Senate rejected the ENABLERS Act following significant pushback from the American Bar Association and other industry representatives. Consequently, U.S. law is still without an effective AML framework for the art industry.

Regulation of the Art Market in the E.U. and U.K.

Unlike the United States, the E.U. and U.K. were much more aggressive and successful in extending AML regulations to AMPs. In 2020, the E.U. enacted its Fifth Anti-Money Laundering Directive (5AMLD), which extended AML regulations to include art auction houses and dealers.

Despite the U.K.’s exit from the E.U. in January 2020, the U.K. proceeded to apply the 5AMLD in its AML efforts. The U.K. offers both a criminal law approach and preventative approach to combat money laundering. For the former, the U.K. enacted its Proceeds of Crime Act in 2002, which made it a crime for any entity, including art market participants, to be involved in arranging or acquiring property through unlawful conduct or money laundering. For the latter, the U.K. enforced the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations in 2017 (MLR 2017), which expanded the country’s AML directives and was updated to specifically cover “art market participants” who transact amounts exceeding €10,000. The MLR 2017 required even accountants, legal professionals, high-value dealers, and the like to establish risk-based protocols. In the U.K., AML compliance obligations include risk assessments, training requirements, CDD checks, enhanced checks for parties involved with politically exposed persons (PEPs) and high-risk third countries, and maintaining records. The U.K.’s AML approach is even more stringent than that of the E.U. and provides a more cohesive regulatory framework.

Analysis

Concerning the art market, U.S. AML laws lag far behind those of the E.U. and the U.K. This is problematic considering that the U.S. is the largest global art market with a share of 42%, surpassing China at 19% and the U.K. at 17%. Instead of taking real action to prevent money laundering in the art market, the United States has opted to allow market participants to follow a voluntary system that is mere window dressing for the problem. As a result, the United States remains an attractive target for global criminals to launder their criminal proceeds. 

Senate Subcommittee Investigations: Voluntary AML Compliance Programs

The U.S. Senate’s Permanent Subcommittee of Investigations (the “Subcommittee”) in 2020 investigated the status and effectiveness of the voluntary AML programs at the four major auction houses—Sotheby’s, Christie’s, Phillips, and Bonhams. While the houses do not publish their AML policies, the Subcommittee investigated their voluntary programs and published its findings (2020 Senate Report). The 2020 Senate Report found that the high-value art market presents an attractive vehicle for money laundering and sanctions evasion and recommended imposing regulatory compliance requirements on U.S. art dealers and auction houses. The Subcommittee concluded that the voluntary AML programs maintained by the major auction houses were not effective in identifying the true ultimate beneficial owner (UBO) as they generally performed CDD on the art advisor/dealer and other intermediaries rather than on UBOs—and even then, any CDD may be voluntary.

A Path Forward

The BSA should be extended to art dealers, auction houses, and other art intermediaries with annual gross sales exceeding $5 million, henceforth identified as high-value art market participants (HVAMPs). The following are recommendations for how such AMPs should operate under BSA/AML compliance regulations per the BSA’s five-pillar framework. Drawing from the definitions established in the ENABLERS Act and 5AMLD, AMPs should be defined as “persons or entities engaged in the trade of works of art — specifically including dealers, advisors, consultants, custodians, galleries, auction houses, and museums — or persons or entities acting as an intermediary in the sale or purchase of works of art.”

BSA Compliance Recommendations for the High-Value Art Market

1. All HVAMPs must have a designated compliance officer.
2. All HVAMPs must develop internal, written AML policies. Major auction houses with established programs must publish their AML policies. The policies must include clear procedures for filing SARs with FinCEN. An HVAMP receiving an unsatisfactory client response on the source of funds or UBO identity should be required to file a SAR. 
3. Employee training programs must be documented and updated to reflect current market trends. All current and incoming employees must be trained to detect suspicious activity. 
4. Independent, risk-based audits should be conducted periodically to assess weaknesses in a company’s BSA/AML compliance program. 
5. Mandatory CDD should be implemented. This rule requires HVAMPs to identify and verify beneficial ownership identities, allowing HVAMPs to assess whether they are dealing with legitimate or suspicious buyers. HVAMPs should be required to file SARs with FinCEN upon encountering a potentially suspicious UBO customer. As in the E.U. and U.K. and proposed in the ENABLERS Act, CDD should apply to UBO customers who wish to purchase an artwork valued above $10,000.

Considerations

As discussed, previous efforts to apply the BSA to the art market failed due to strong resistance from the art world, especially from smaller market players and peripheral AMPs like lawyers and investment advisors. Therefore, these recommendations attempt to mitigate these shortcomings.

First, mandated AML programs should apply only to core AMPs meeting a realistic and practical monetary threshold. While E.U. and U.K. laws mandate compliance on all those dealing in works of art exceeding €10,000, this requirement will likely cover nearly all small U.S. art dealers and galleries. FinCEN interim rules implementing section 352 of the USA PATRIOT ACT require dealers in precious stones and jewels to establish AML programs if they both purchased and sold at least $50,000 of covered goods in the preceding year. However, this threshold is still too low for the high-value art market.²2 “The high-value art market is of greatest concern in the industry from a money laundering perspective but represents a limited portion of the broader art market. According to the UBS and Art Basel report, in 2020, less than 20 percent of works sold internationally by art dealers had values over $50,000. Approximately 10 percent of sales by auction houses internationally in 2020 had values over $50,000, but those sales accounted for over 85 percent of the total sales value” (2022 Treasury Study, 3). If these thresholds are imposed, the costs associated with maintaining an AML program could be crushing on small mom-and-pop art dealers and galleries. A more reasonable approach would be to set the monetary threshold at $5 million in annual gross sales, thus preventing undue burdens on smaller dealers while still targeting high-value, money laundering–prone transactions.³3 This dollar threshold is intended to ensure that, like the AML programs for precious jewel dealers, the rule only applies to persons engaged in the business of buying and selling a significant amount of works, rather than to small businesses, occasional “dealers,” and persons dealing in such items for hobby purposes. Moreover, the $5 million threshold has precedent in the Corporate Transparency Act of 2024, which requires a reporting entity to have more than $5 million in gross receipts or sales on their prior year’s federal income tax return.

Potential criminals may still attempt to launder their illicit proceeds through dealers under the $5 million benchmark. However, this threshold would create less resistance from smaller AMPs while still addressing the target high-value art market, where players regularly transact above $5 million. If criminals attempt to launder money through a large number of lower-valued artworks with the smaller AMPs, such attempts could become extremely burdensome, and these smaller dealers could eventually achieve sales revenue of $5 million or more—in which case they would become subject to the AML laws. FinCEN could adjust thresholds further if laundering persists but still should avoid imposing undue financial and administrative burdens on smaller AMPs. 

Incidentally, backlash may arise over the differing thresholds for the art market versus the antiquities market, whose dealers are subject to AML obligations if trading antiquities valued at $10,000 or more. However, despite physical or categorical similarities between the two, the art market should be treated distinctively as it handles significantly higher volumes and values than the antiquities trade.⁴4 See supra note 1. The global antiquities trade is worth an estimated $300–400 million a year. For more, see the following reports: Fighting Bogus Information About the Art Market; The Current State of the Antiquities Trade: An Art Dealer’s Perspective; The Art Basel & UBS Global Art Market Report 2024.

Conclusion

The U.S. art industry is vulnerable to money laundering due to the lack of effective AML regulations. Congress has thus far failed to enact effective AML laws applicable to the art industry due to strong opposition from certain lobbying groups and smaller AMPs lacking resources to adopt AML compliance programs. While the E.U. and U.K. enforce stringent AML regulations, the United States, as the leader of the global art market, must catch up. This oversight creates a major loophole in the global enforcement of AML initiatives in this important industry. Implementing a regulatory framework involving large-scale U.S. art market players can strengthen AML efforts without overburdening smaller participants.

* Sarah Jane Kim is a legal research associate and former arts professional. She holds a B.A. in Art History from Georgetown University and M.A. in Art History from Columbia University, where she specialized in 19th-century French art. She has worked at the Metropolitan Museum of Art, Smithsonian, Phillips, and helped teach the Art History survey at Barnard College and Columbia University. She will be entering law school this fall.

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Preservation or Protection? The Intellectual Property Debate Surrounding Traditional Cultural Expressions

Mar 12, 2025 | HALO x ILJ Collaboration, Online Scholarship

Editor’s Note: This article is part of a collaboration between the Harvard Art Law Organization and the Harvard International Law Journal.

*Gunjan Arora

Introduction: 

The United Nations Declaration on the Rights of Indigenous Peoples (2007) acknowledges equal human rights of indigenous peoples against cultural discrimination. Under Article 31.1 of the Resolution, indigenous people have been accorded the right to “maintain, control, protect and develop…intellectual property over [their] cultural heritage, traditional knowledge and traditional cultural expressions.” This includes manifestations of their sciences, technologies and cultures, including oral traditions, literatures, designs, sports and traditional games and visual and performing arts among others. Further, Article 31.2 enjoins the respective States with an obligation to undertake effective measures which enable indigenous people to exercise their rights successfully. 

The World Intellectual Property Organization (1985) defines “Traditional Cultural Expressions” and/or “Expressions of Folklore” as tangible and intangible forms in which traditional knowledge and cultures are expressed, communicated, or manifested. These include traditional music, performances, narratives, names and symbols, designs, and architectural forms. These are said to be included as part of the broader connotation of Traditional Knowledge. Traditional Cultural Expressions (TCEs) mirror the identity and heritage of indigenous communities. They are integral to their socio-cultural identities, embodying know-how and skills, thereby transmitting core values and beliefs. Their preservation is key to the promotion of creativity, enhanced cultural diversity, and the preservation of their cultural heritage. 

According to WIPO, the several ‘uses’ of TCEs may include commercial, industrial, customary, household, public health uses as traditional medicine and fair use for research and educational purposes. Currently, there is no specific clause under any international instrument that seeks to provide any form of protection, preservation, or conservation of these rights belonging to      traditional communities. Although there is a prolonged and ongoing debate on the need to preserve or protect the Traditional Cultural Expressions belonging to an indigenous community as a community based right, such indigenous communities per se have yet not been given an opportunity to exercise their discretion with respect to the manner in which TCEs are to be exploited. This article seeks to explore the idea of preserving TCEs as a separate form of IP under a sui generis system. Adopting a sui generis system for protection of rights of TCEs and associated communities would consider identifying TCEs as an independent property right, capable of being enforced as an IP. TCEs can be recognized as a unique form of expression which can be a subject matter of protection under IP. They may be preserved as a community right based on the principle of access and benefit sharing. This would ensure that the communities cannot be subjected any form of unwarranted commercial exploitation or misappropriation. 

Traditional Cultural Expressions: Crafted by WIPO

The discussion surrounding TCEs is not a recent one. For the past two decades, the WIPO has been working towards granting an intellectual property rights status to TCEs. According to Vargas (2022), the need to protect TCEs as an intellectual property for indigenous communities is justified on three specific grounds: value-based, harm-based, and traditional IP-based. The value-based justification is built on the idea that TCEs are both economically and intrinsically valuable for the community to which it belongs and hence, such communities must be duly rewarded. The harm-based justification assumes that the cultural extinction, devaluation and desecration could be the result of lack of protection. Further, the traditional IP-based justification equates TCEs with any other form of work protected under IP and is based on incentivizing creativity, granting autonomy, right to self-determination, and collective ownership of communities to which they belong. Of these three justifications, although the IP-based and value-based justifications may seem more obvious, the harm-based justification may be more compelling due to the issue of cultural appropriation, propertization of traditional culture, and commercial adaptation. Graber’s (2009) suggestion to legally recognize TCEs either under IP or as a sui generis regime resonates well with both the collective right of self-determination and the collective right of self-government as endorsed by the Declaration on the Rights of Indigenous Peoples (2007).      

Although TCEs were initially included within the broader ambit of Traditional Knowledge, the need to grant TCEs protection as a separate form of IP gradually gained traction. The 12th Session of the WIPO Intergovernmental Committee on IP and Genetic Resources, Traditional Knowledge and Folklore (2008) considered IP protection for TK. WIPO defined the term TK to include the following: agricultural knowledge, scientific knowledge, technical knowledge, ecological knowledge, medicinal knowledge, “expressions of folklore” in the form of music, dance, song, handicrafts, designs, stories, and art work; elements of languages, such as names, geographical indications and symbols, and movable cultural properties. Any item which was not resulting from intellectual activity in the industrial, scientific, literary, or artistic fields, such as human remains, languages in general, and other similar elements of “heritage” in the broad sense, was considered excluded from the definition of TK. Hence, during this session, expressions of Folklore were considered part of TK itself. 

The WIPO Intergovernmental Committee on IP and Genetic Resources, Traditional Knowledge and Folklore, (2010) in its 17th session resolved to arrive at a definition for the term “Public Domain” specifically in reference to protection of TK and Traditional Cultural Expressions (TCE) or Expression of Folklore. The Committee agreed to exclude TK and TCE from the definition of “Public Domain” in order to protect them against unjust enrichment and misappropriation. The Committee proposed introducing the “Traditional Knowledge Commons” in order to restrict overlapping public domains or knowledge sharing spaces. The Traditional Knowledge Commons would be a mechanism to provide for regulated access to TK. “Public Domain” would include publicly accessible information or intellectual property which does not otherwise infringe on any legal right or obligation of confidentiality.  The differences between several phrases, including “publicly available and accessible,” “publicly available but not accessible,” “accessible but protected,” and “unprotected but not accessible” were discussed to distinguish publicly available TK from publicly unavailable TK. The latter, “unprotected but not accessible,” is the one which is not available without any monetary consideration or unjust enrichment. The UNEP Convention on Biological Diversity (2009) emphasized the need for seeking an identifiable Prior Informed-Consent (PIC) from indigenous communities, holding the TK  as a prerequisite when accessing traditional knowledge in order to fulfill the objectives under the legal frameworks of benefit-sharing.

The 37th Session of the Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore (2018) resolved to protect the TCEs under IP. This was aimed at recognizing the rights of indigenous communities and preventing the unauthorized use or unwarranted misappropriation of such TCE by any third party seeking to exploit them. The Committee agreed to define TCEs to include both pre-existing materials from the past and contemporary expressions of traditional cultures together with their adaptation, imitations, revitalizations, revivals, and recreation. Further, it was decided by the Committee that if a cultural expression is considered a traditional creation, it must be identified with a living tradition and community, which still bears and practices it. It is to be associated with the idea of collective ownership as opposed to individual ownership. A traditional creation is meant to exhibit a shared sense of communal responsibility, identity, and custodianship.

The WIPO Diplomatic Conference on Intellectual Property and Genetic Resources, Traditional Knowledge and Genetic Resources associated with Traditional Knowledge (2024) recently mandated a compulsory disclosure in patent applications for inventions which are based on Genetic Resources (GR) and/or associated TK. Contracting parties signing the Treaty are obligated to disclose the country of origin or source or identity of the indigenous people or local community of the GR and/or TK. This recent requirement raises concerns over the absence of any legal instrument for preserving TCEs as cultural heritage belonging to indigenous communities hailing from WIPO member states. Several jurisdictions currently provide for protecting TCEs originating in their respective states under Copyrights, Trademarks and Geographical Indications. Further, the Beijing Treaty on Audiovisual Performances (2012) grants performers of folklore a right under Article 15.4 of the Berne Convention for the Protection of Literary and Artistic Works (1886) access to a mechanism for the international protection of unpublished and anonymous works, including TCEs. However, the lack of any dedicated legally enforceable mechanism leads to considerable exploitation of the rights of traditional communities. 

Protection of Traditional Cultural Expressions Under IP: A Critical Analysis  

WIPO’s Intergovernmental Committee debates have focused on the distinction between Protection or Preservation, on the one hand, and Safeguarding or Promotion, on the other. IP grants a positive exclusive right to use work one has created and a negative right which excludes any unauthorized engagement of such work, thereby averring any unjust enrichment and misappropriation. Johnsson and Tualima (2017) state that a protection-based mechanism for TCEs under IP may not be feasible as it is a community-based right.  While the rationality of protection under IP is derived from the reward theory which incentivizes the individual creator, the idea of preservation would safeguard the rights of cultural creations belonging to indigenous communities. 

A critical analysis of all forms of IP presents the following opportunities and impediments to protecting the rights of indigenous communities over TCEs under IP:

a) The Berne Convention (1886) deals with the protection of works and copyrights of their authors. According to the WIPO, copyright is an author’s right over his work. It is a legal term which is used to describe the rights that the creators have over their literary, musical, and artistic works. Works covered under copyrights include books, drama, music, paintings, sculptures, and films, among others. Therefore, it can be concluded that the law      of copyrights and TCEs both deal with forms of literary, dramatic, musical, and artistic works. However, the difference lies in the nature of the intangible rights conferred. While copyright is a private ownership right, TCEs are community rights, handed down across generations, either orally or by imitation — it reflects the cultural or social identity of the said community. Commodification of original expressions by a third party in the form of derivative, adapted, or inspired works is a cause of conflict between the two. A claim for private ownership defies the very objective of TCEs. Once the term of copyrights comes to an end, the said work falls into public domain. However, traditional expressions, though available in the public domain, remain inaccessible. The essence of preservation and safeguarding TCEs is to ensure that commercial benefits are equally derived and shared with the communities which are recognized to have been associated with the origin of the said TCE. Preservation would safeguard against unwarranted and unauthorized claims of unjust enrichment. Nonetheless, the concept of the Collective Management Societies under the copyrights may be  adopted for securing the rights of indigenous communities and their TCEs. A collective management society under the copyright system grants primitive rights to the right-holder to administer their copyrights, facilitating copyright clearance and negotiating license terms in consideration for economic rewards in the form of royalties for commercial exploitation by third parties. Every such community recognized as having a TCE may be provided the right to register their community as a collective community. Such registered collective communities may exercise the right to use and grant third party licenses. This would ensure access-and-benefit sharing of profits accrued from commercialization equally between the traditional community and the third party. 

b) Trademark law deals with brand identification and distinctiveness among consumers with respect to goods and services. The purpose of trademarks is strictly commercial. Hence, trademark law may not be a feasible regime for protecting TCEs as cultural expressions are neither goods nor services. In fact, TCEs cannot be bound with commodification. They instead are nurtured as an experience by the community to which it belongs and is meant to be enjoyed equally by others. There is not meant to be any competition between the communities when allowing legitimate access of their TCEs to the general public. Consumerism is absent from the ethos of access and benefit sharing in a community. TCEs cannot be subjected to consumerism, rather they are to be preserved as an equitable opportunity of experience.

c) Geographical Indications (GIs) and TCEs are both community rights. While the latter deals with cultural expressions in the form of folklore, music and dance, performances or stories, meant to be experienced and enjoyed, the former deals with safeguarding rights of local communities engaged in manufacturing or producing goods attributable to specific geographical locations. An aspect of GIs, the registration of communities as a registered association or community capable of being recognized by way of a collective registration mark, may be implemented to preserve the rights of TCE communities. Every such TCE community may be registered under a collective association with a collective mark, equally distinctive and distinguishable to be identifiable with the community practicing it as cultural expression. 

d) The Traditional Knowledge Digital Library Project (2011), an initiative in India, makes all existing TK in India available in a digital format. Establishing a similar digital library for all the TCE belonging to and coming from specific indigenous communities may also be a step towards its preservation. Such a digital library would safeguard the community’s rights against misappropriation and unjust enrichment, preserve the objective of benefit-sharing, and bring recognition to indigenous communities credited for its origin.

Conclusion:

The idea of preserving the identity of indigenous communities practicing their agelong cultural expressions is to protect them against any unwarranted commercial exploitation. This may be legally enforced by recognizing TCEs as a sui generis regime. TCEs could be categorized as a separate form of IP. It may be identified as a community right where the right to administer the TCEs and its commercial exploitation vests with the collective management societies representing the interests of the indigenous community. In addition to this, creating a TCE Digital Library would further safeguard the rights of these communities against cultural appropriation, propertization of traditional culture, and unwarranted commercial adaptation. Extending the connotations of a community identity would be a step forward in preserving their right to self-determination and self-governance. 

*Gunjan Arora is an Assistant Professor at Institute of Law, Nirma University.

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Fighting Money Laundering in the Art Market – A Comparative Overview of U.S. and Swiss Law

Mar 12, 2025 | HALO x ILJ Collaboration, Online Scholarship

Editor’s Note: This article is part of a collaboration between the Harvard Art Law Organization and the Harvard International Law Journal.

*Enzo BASTIAN

I.   Introduction

The connection between money laundering and the art market was first identified as early as the 20th century (De Sanctis; Roth). However, it is recent international scandals, such as those revealed by the Panama Papers, that have intensified regulatory scrutiny of the art market (Roth; Cassani/Heninger; Kern). In the European Union (EU), this oversight began in 2018 with the implementation of the Fifth Anti-Money Laundering Directive (AMLD V), which brought art market participants under the scope of anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. This framework was further reaffirmed in 2024 with the adoption of the EU’s first Anti-Money Laundering Regulation (AMLR).

Similarly, in February 2023, the Financial Action Task Force (FATF) — a leading international organization in the fight against money laundering — published a report specifically addressing the risks of money laundering in the art market (FATF, Report). The FATF emphasized the vulnerability of the art market to illicit activities and urged member states to implement robust countermeasures.

In the United States, the issue of money laundering within the art market resurfaced in particular in 2020 with a report from a Senate subcommittee (U.S. Senate, Report). This was followed by a comprehensive study published by the U.S. Department of the Treasury in February 2022 (U.S. DOT, Report). Despite these efforts, the American art market remains largely underregulated in terms of addressing money laundering risks. This regulatory gap is particularly concerning given the dominant position of the U.S. in the global art market, accounting for 42% of its total value in 2023 (UBS/Art Basel, Report 2024).

The lack of comprehensive regulation on this issue is not unique to the United States. Switzerland, which represented 3% of the global art market’s total value in 2023 (UBS/Art Basel, Report 2024), also faces significant regulatory deficiencies concerning money laundering in the art sector.

This note aims to briefly compare the legal frameworks of these two jurisdictions with respect to combating money laundering in the art market. It begins by presenting the rules governing preventive measures (II.) and repressive mechanisms (III.) before concluding with some final observations (IV.). It should be noted, however, that this note does not delve into the specific methods by which money laundering may occur in the art market, nor does it analyze the particular vulnerabilities of the sector (on these topics, see, e.g., U.S. DOT, Report; Hufnagel/King; Dagirmanjian; Turner; Cassani/Henninger).

II.   Money Laundering Prevention

In addressing the fight against money laundering, it is essential to focus on the so-called preventive rules — those designed to preclude money laundering activities, irrespective of whether a specific instance of money laundering has occurred. These rules require regulated entities to implement internal procedures aimed at preventing money laundering offenses. Two primary categories of measures must be adopted:

• Due Diligence Measures: These measures primarily involve gathering specific information as part of establishing and maintaining business relationships. This includes identifying the client, verifying the ultimate beneficial owner, and determining the origin of funds.
• Reporting Obligations: When suspicious activities, including potential money laundering, are detected during the due diligence process, regulated entities are obligated to file a Suspicious Activity Report (SAR). Such reports must be submitted promptly to the respective national financial intelligence unit. In the United States, this unit is the Financial Crimes Enforcement Network (FinCEN), while in Switzerland, it is the Money Laundering Reporting Office Switzerland (MROS). These units analyze the reported information and decide whether the matter warrants escalation to law enforcement authorities for further investigation and potential prosecution.

Without delving into the specific content of these preventive rules, it is critical to identify the entities subject to these obligations to assess the extent of regulatory oversight in the art market in the United States (A) and Switzerland (B).

        A.   U.S. Law

On May 18, 2018, U.S. Congress Representative Luke Messer introduced a bill aimed at including art dealers in the fight against money laundering under the Bank Secrecy Act (BSA) (Turner). Although the bill ultimately failed to pass, Congress later amended the BSA to include the antiquities market within the scope of AML regulations (Turner). On January 1, 2021, the U.S. Congress enacted the Anti-Money Laundering Act of 2020 as part of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (NDAA) (Pub. L. No. 116-283). This legislation introduced new provisions under Section 6110 of the AML Act, subjecting the antiquities trade to AML/CTF requirements (U.S. DOT, Report).

Following this, the Department of the Treasury was tasked with evaluating whether AML/CTF regulations should be extended to the broader art market. This evaluation culminated in the aforementioned Treasury report (U.S. DOT, Report).

In parallel, another legislative initiative — the ENABLERS Act — was proposed in 2021, seeking to fully subject the art market to AML/CTF regulations. Although the bill passed in the House of Representatives, it failed to secure approval in the Senate (Turner).

For now, AML/CTF regulations in the United States remain applicable primarily to financial intermediaries, such as banks, and do not seem to impose obligations on art market participants (U.S. DOT, Report; Dagirmanjian; Turner). With the finalization of the implementing regulations pending (Center for Art Law, USA AML Regulation), this regulatory gap persists.

Nevertheless, art market actors may still encounter AML/CTF obligations. Specifically, any person engaged in a trade or business in the United States is required to file a report if they receive more than USD 10,000 in cash, coins, or certain monetary instruments, whether in a single transaction or in two or more related transactions (U.S. DOT, Report).

Despite this, such measures are barely sufficient. The art market and its participants remain largely unregulated with respect to money laundering and terrorist financing risks.

        B.   Swiss Law

Under The Swiss law, the regulatory framework is broadly similar to that of the United States. Preventive AML measures under the Anti-Money Laundering Act (AMLA) primarily apply to financial intermediaries, such as banks (Art. 2 AMLA). Art dealers are generally not classified as financial intermediaries and are therefore not directly subject to these preventive regulations (Cassani/Henninger; Kern).

In certain circumstances, art dealers may be considered financial intermediaries if they provide financial services — such as loans — under Art. 2 para. 3 AMLA. However, this classification applies only if the financial service is not connected to the execution of another principal contract (e.g., the sale of artworks). Otherwise, the activity falls outside the scope of the AMLA, as specified in Art. 3 let. f of the Anti-Money Laundering Ordinance (Cassani/Henninger). Consequently, Art Secured Lending activities do not necessarily fall within the scope of AML regulations in Switzerland, as they are generally tied to a principal contract (e.g., the sale of artworks) when carried out by an art dealer or an auction house (on this topic, see Tistounet).

Nonetheless, art dealers in Switzerland may fall within the scope of AMLA in specific circumstances — namely, when they accept cash payments exceeding CHF 100,000 as part of a transaction (Art. 8a para 1 AMLA). This threshold, however, is relatively high compared to similar regulations in other jurisdictions, including the United States.

As a consequence, the Swiss art market, like its U.S. counterpart, remains largely exempt from comprehensive regulations aimed at preventing money laundering or terrorist financing.

III.   Money Laundering Repression

In addition to preventive rules, most jurisdictions have also enacted measures to criminalize money laundering. These repressive regulations are designed to sanction individuals who actively engage in money laundering activities. Unlike preventive measures, these provisions are sector-agnostic and can, therefore, be applied to actors in the art market as well (Dagirmanjian; Cassani/Henninger).

To understand the scope and application of these measures, it is essential to briefly examine the legal frameworks in the United States (A.) and Switzerland (B.).

        A.   U.S. Law

In the United States, the Money Laundering Control Act (MLCA), codified under Sections 1956 and subsequent provisions of 18 U.S.C., criminalizes money laundering by categorizing such acts into four distinct types: promotional, concealment, structuring, and tax evasion (Dagirmanjian).

Some of these offenses may have direct implications for the art market and could expose actors within the sector to criminal liability (Dagirmanjian). Of particular relevance is Sec. 18 U.S.C. § 1957, which penalizes individuals who “knowingly engage in a monetary transaction involving more than USD 10,000 in criminally derived property.” This provision is especially significant in cases where illicitly obtained funds are used to purchase artworks (e.g., cash obtained from drug trafficking), thereby connecting money laundering to the art market.

        B.   Swiss Law

In Switzerland, unlike in the United States, money laundering is criminalized through a single offense. This is enshrined in Art. 305bis of the Swiss Criminal Code (SCC), which penalizes acts intended to conceal the illicit origin of assets. These acts may include traditional money laundering activities, such as using proceeds from drug trafficking to purchase artworks (Cassani/Henninger; Kern). The provision also extends to cases of “laundering of provenance,” where the objective is to give a lawful appearance to cultural goods looted abroad (on this topic, see Bastian).

Additionally, Swiss law establishes a related offense that only applies to financial intermediaries subject to due diligence obligations under the AMLA (e.g., banks). Under Art. 305ter, para 1 SCC, financial intermediaries may face criminal prosecution if they fail to properly identify the beneficial owner or knowingly provide false information about the beneficial owner in the context of a business relationship.

IV.   Conclusion

The American and Swiss systems currently exhibit significant similarities, as the art markets in both countries remain largely unregulated with respect to AML/CTF measures. Actors in the art market are not subject to preventive AML rules, despite international standards such as those outlined in the EU (Art. 3(3)(i) & (j) AMLR) or the recommendations of the FATF. Given the art market’s inherent vulnerability to money laundering, it may be time for both nations to adapt their regulatory frameworks.

In the United States, the FinCEN is progressing slowly but continues to evaluate the expansion of AML regulations to encompass the art market (Center for Art Law, USA AML Regulation). While some scholars advocate for such reforms (Dagirmanjian; Turner), others remain critical (Burroughs).

Similarly, in Switzerland, a parliamentary motion submitted in 2022 proposes extending the AMLA to include art dealers (Motion Pult CN 22.3104). Since October 2024, the motion is under review by a commission of the Council of States. This indicates that Swiss law could undergo reform in the coming years. Legal scholars have also addressed this issue, with a majority, including the author of this note, supporting the inclusion of art dealers under the AMLA (Roth; Cassani/Henninger; Kern). However, this view is also not without opposition (Ryser).

For the time being, self-regulation appears to be the only practical solution. Several recommendations have been issued by organizations such as the Basel Institute on Governance (Basel Art Trade AML Principles) and the Responsible Art Market (RAM) initiative (RAM AML Guidelines). However, the non-binding nature of these recommendations limits their effectiveness. They fail to create a level playing field among actors within the same sector or to ensure uniform rules. This lack of uniformity is unfortunate, as standardized regulations would significantly enhance international cooperation, a critical factor in combating money laundering.

Furthermore, none of these recommendations or ongoing parliamentary efforts seem to address the issue of Non-Fungible Tokens (NFTs). Despite their significant presence in the art market, NFTs present considerable vulnerabilities to money laundering (FATF, Report; Hufnagel/King; Bastian). The omission of this digital asset class underscores a critical gap in current regulatory initiatives. Within the EU, despite the adoption of the new AMLR, NFTs are likely not covered by these rules since they are not considered as crypto assets under the new MICA Regulation (art. 2 (1)(7) AMLR; consid. 10 MICAR; art. 2(3) MICAR). This situation is, however, likely to evolve as the European Commission is tasked with presenting, by December 30, 2024, a specific proposal to provide a legal framework addressing the issue of NFTs (ESMA).

* Enzo BASTIAN is a doctoral candidate at the University of Lausanne (Switzerland). He is writing his doctoral dissertation on the topic of money laundering in the Swiss art market under the supervision of Professors Carlo Lombardini and Marc-André Renold. Holding a Master’s degree in law and a Certificate of Advanced Studies (CAS) in International Business Disputes from the same university, Enzo BASTIAN is the author of several contributions and insights in banking and financial law. In parallel, he is also a graduate assistant at the CEDIDAC of the University of Lausanne.

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The Claim For the Filandia Collection or Quimbaya Treasure of Colombia Against Spain

Mar 12, 2025 | HALO x ILJ Collaboration, Online Scholarship

Editor’s Note: This article is part of a collaboration between the Harvard Art Law Organization and the Harvard International Law Journal.

Dr. Paloma Villarreal Suárez de Cepeda*

1. The Filandia Collection or Quimbaya Treasure

The Filandia Collection, also known as the Quimbaya Treasure, is an exceptional set of archaeological objects from pre-Hispanic tombs, discovered in 1891 near Filandia, Colombia by huaqueros or tomb looters. That same year, the Colombian government acquired the collection. The artifacts traveled to Spain in 1892 for exhibition during the commemoration of the Fourth Centenary of the Discovery of America. In May 1893, the Colombian government formally handed over the collection to Spain’s Queen Regent María Cristina in gratitude for her intervention in the border dispute between Colombia and Venezuela, which culminated in the adoption of the so-called, and still valid, Spanish Arbitration Award, or the Award in the Boundary Dispute Between the Republic of Colombia and the United States of Venezuela.

The 122 archaeological pieces that make up this extraordinary collection are currently preserved and exhibited in the Museum of America in Madrid.

2. Request by the Colombian Constitutional Court

In 2017, the Colombian Constitutional Court ruled that the act of handing over the Filandia  Collection must be examined based on the current Article 72 of the 1991 Colombian  Constitution rather than the international law in force at the time (the principle of contemporaneity, which refers to interpreting a legal act based on the law applicable at the time it was created). Article 72 classifies the collection as cultural heritage, rendering it inalienable, non-seizable, and imperishable (doctrine of “inter-temporal” law, which addresses the application of current law to past acts or events). The Court ordered the relevant authorities to undertake all necessary diplomatic, administrative, legal, and economic measures with Spain to achieve its repatriation.

From the perspective of current international law, the Court acknowledged that various dispute resolution mechanisms exist, such as bilateral agreements, good offices, mediation, and conciliation, among others. In its view, these diplomatic mechanisms offer the following advantages: first, the dispute can be resolved outside the framework of international treaties.  Second, any solution reached would be implemented in good faith.

After the current Spanish Government rejected an informal request for the collection’s return by the Quindío Academy of History in 2022, a formal restitution request was submitted to the Government of Spain on May 9, 2024. The Colombian Government sent formal letters to the Minister of Foreign Affairs, European Union, and Cooperation of Spain, as well as to the Minister of Culture, requesting the “recovery” of the Filandia Collection. On December 5, the Ministry of Cultures, Arts, and Knowledge, along with the Ministry of Foreign Affairs, announced the dispatch of a second letter.

3. Spanish Regulations

3.1 Domestic Law

Article 1 of the Spanish Historical Heritage Act, applicable throughout Spain’s national territory, defines Spanish historical heritage as the collection of immovable and movable property of artistic, historical, paleontological, archaeological, ethnographic, scientific, or technical interest. It also includes documentary and bibliographic heritage, archaeological sites and zones, as well as natural sites, gardens, and parks of artistic, historical, or anthropological value. The law aims to protect, enhance, and transmit this heritage to future generations.

Article 2.1 of the law states that, “without prejudice to the competencies of other public authorities, the essential duties and powers of the State Administration are to ensure the conservation of Spanish Historical Heritage and to promote its enrichment. The State will protect such assets from illicit exportation and looting.”

A key form of protecting exceptional heritage is its classification as a Cultural Interest Asset, commonly referred to as BIC (“Bien de Interés Cultural”). BIC status can be granted either ex lege or through an individualized administrative declaration via Royal Decree. Additionally, Article 27 establishes that collections held in Spanish museums are automatically considered BIC. The declaration of BIC status prohibits the exportation of such assets, except for temporary removals, typically linked to their exhibition in foreign museum institutions under loan agreements that promote the exchange of objects for purely cultural or educational purposes.

The only lawful possibility for the permanent removal of a BIC belonging to Spanish Historical Heritage from the national territory, thereby resulting in its definitive loss, is through an exchange (“permuta”). Article 34 of the Spanish Historical Heritage Act stipulates:

“The Government may negotiate with other states the exchange of state-owned movable assets belonging to Spanish Historical Heritage for others of at least equal value and historical significance. Approval will require a favorable report from the Royal Academies of History and Fine Arts of San Fernando and the Qualification, Valuation, and Export Board for Spanish Historical Heritage Assets.”

The only exchange carried out in accordance with the requirements of this article took place in 2010 under the government of José Luis Rodríguez Zapatero and the Spanish Socialist Workers’ Party. Spain handed over to Mexico a flag preserved in the Army Museum, which had been taken from the troops of Priest Hidalgo at the Calderón Bridge in 1811, and in return, received a Coronela flag from the King Ferdinand Battalion, preserved in the Chapultepec Museum, originating from the Battle of Tampico in 1829.

As a BIC, the Filandia Collection cannot currently be legally delivered to Colombia except through the aforementioned exchange mechanism.

3.2 International Law

Public International Law, so named by analogy to national law, is fundamentally different from its national counterpart, as it lacks a centralized authority, such as a state, to justify its use as a mechanism for conflict resolution through force.

Whether the agreements reached by states or other subjects of international law, such as international organizations like the United Nations, will be honored depends on the political will of each party. These parties assess the risks of not fulfilling commitments based on the criteria of expediency and the capacity to defend against possible reprisals from third states.

Agreements can take various forms, but only those treaties intended to produce legal effects— creating rights and obligations between the parties—are formally binding. Therefore, agreements or instruments that generate only political commitments, such as gentlemen’s agreements, joint communiqués, declarations of principles, or memoranda of understanding, are not considered international treaties.

In Spain, constitutional norms and the Law  25/2014 of November 27 on Treaties and Other International Agreements  govern the valid conclusion of such agreements. This law differentiates between international treaties, administrative international agreements, and non-regulatory international agreements. The latter is defined in Article 2(c) as:

“An international agreement that does not constitute a treaty or an administrative international agreement, concluded by the State, the Government, bodies, agencies, and entities of the General State Administration, Autonomous Communities and Cities of Ceuta and Melilla, Local Entities, public universities, and any other public-law entities with competence to do so.  These agreements contain declarations of intent or establish political, technical, or logistical commitments and do not constitute a source of international obligations nor are governed by international law.”

These are mere political commitments, declarations of intent, or non-legal coordination agreements. Such agreements are not subject to the procedures required for treaties and are not published in the Official State Gazette.

The current Spanish Minister of Culture, a career diplomat, has noted in the context of  Colombia’s claim that Spain is obliged to undertake a “decolonizing” review of its museums  based on agreements or best practices from the ICOM (“International Council of Museums”), the UNESCO World Conference on Cultural Policies and Sustainable Development (Mondiacult), and the 10th Ibero-American  Museum Meeting of 2022. The Minister has cited these frameworks to support the need for such a review.

The most recent Mondiacult summit took place in 2022 in Mexico and concluded with a  Declaration that makes no mention of “decolonization” or “colonial” issues. Likewise, the  Conference Report published by the Mexican Government does not use these terms.

The 10th Ibero-American Museum Meeting of 2022, held simultaneously with the Conference, resulted in a final Declaration in which the “representatives” of Ibero-American countries  proposed and promoted reflection and commitment to incorporating a “decolonial perspective in museum institutions and processes.” Other commitments included incorporating a culture of peace in museums, addressing gender perspectives, climate emergencies, combating racism and xenophobia, and emphasizing solidarity-based values of ancestral knowledge and practices.

However, the list of recommendations does not mention the “decolonization” of museums, but instead includes more general concepts, such as strengthening funding, combating illicit trafficking, promoting digitalization, enhancing the educational role of museums, and so on. In any case, the representatives who signed this Declaration primarily hold management rather than political positions, which means they lack the authority or legitimacy to assume obligations on behalf of their respective countries.

4. Conclusion

The Filandia Collection consists of relics—material remains produced by deceased individuals that are part of our present moment and tied directly to our history. Relics by themselves explain nothing; they always require a narrative to endow them with meaning. Relics and narratives, therefore, are the foundational materials that nourish history as an academic discipline, allowing people to study the actions of others long deceased while generating new narratives in the process.

Thus, it can be said that the international conflict surrounding these relics is closely tied to the history of both Spain and Colombia, but is necessarily political as well, given that history is a discipline capable of guiding the future of a political society. In the case of the Filandia Collection, Colombia seeks to “know itself” or “understand its identity” through relics from the pre-Columbian period, aiming to distance itself from its Hispanic heritage.

Although the collection was handed over in the late 19th century as a gesture of gratitude for Spain’s mediation in the conflict with Venezuela, the current Colombian government, along with Spain’s current Minister of Culture, seek to seize the opportunity offered by the decolonization movement. If this movement affects any European nation, it would not necessarily be limited to Spain but will likely extend to other nations such as Britain, France, the Netherlands, and Belgium.

Opposing this political trend, however, is the solid defense of Spanish legislation, which may or may not prove insurmountable depending on the current government’s ability to pass legislative amendments. Such amendments would replace the existing regulations that limit the government’s ability to act by requiring the approval of independent institutions in the case of an exchange. There is always the possibility that these amendments could aim to give the government free rein to act as it sees fit within a future “decolonization” framework.

In any case, the current Colombian government finds itself in the best position to secure the return of the Filandia collection from Spain. This opportunity arises not only from Colombia’s determined efforts to reclaim its “pre-Columbian heritage” as a means of redefining its national identity but also from Spain’s internal political fragmentation. Colombia’s strength contrasts sharply with Spain’s weakened position in reclaiming its own political losses, such as the spoils of Napoleonic looting from France.

The fate of the Filandia Collection highlights the complex relationship between history, politics, and philosophy, as the idea of identity is a philosophical idea. It emphasizes how relics, far from being static artifacts, are dynamic symbols that all nations mobilize to shape the present and future. The resolution of this conflict will serve as a case study in how the decolonization movement continues to challenge historical narratives and power balance.

Dr. Paloma holds a PhD in Law and divides her teaching activity between training future lawyers and teaching the Master’s Degree in Legal Practice, specializing in Art Law. She is the lead lecturer for the Legal Aspects of Trade in Artistic and Collectible Goods course in the Master’s Degree in Art Markets, as well as the Master’s Degree in Archaeological and Museum Projects, both at UDIMA.

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Eighty Years Later, Progress of Nazi-Era Restitution Remains Inconsistent

Mar 12, 2025 | HALO x ILJ Collaboration, Online Scholarship

Editor’s Note: This article is part of a collaboration between the Harvard Art Law Organization and the Harvard International Law Journal.

*Eleanor Gartstein

The Second World War saw the Nazis carry out the largest scale of art and cultural property plundering in history. It was not until fifty-three years after the war ended, however, that the first international agreement specifically addressing Nazi-era restitution was realized. The Washington Conference on Holocaust Era Assets was held in 1998, resulting in eleven agreed upon Principles of Nazi-Confiscated Art. These principles have since served as the guiding global framework for ownership disputes arising from the Nazi-era. 

The decades-long delay came alongside 1998’s Nazi War Crimes Disclosure Act, implemented in response to strong calls for the declassification of government records concerning Nazi activity. As the public gained access to over 8.5 million pages of records, the “largest congressionally mandated, single-subject declassification effort in history,” many victims and heirs gained the necessary documentation to move forward with their claims. 

The principal aim of the Washington Principles is the pursuit of “just and fair” solutions. This key phrase, which appears twice in the principles, unfortunately suffers from significant ambiguity. Principle 8 recognizes this, conceding that each “just and fair” solution can vary according to specific case circumstances. This is where Principle 11 refers to the need for a designated forum to assist in addressing these variations, encouraging the development of alternative dispute resolution mechanisms at a national level. 

Given the Washington Principles’ non-binding status, out of the forty-four countries in attendance at the Washington Conference, only five have since made substantive moves toward effectuating Principle 11. The five nations with existing designated commissions are Austria, France, Germany, the Netherlands, and the United Kingdom. 

The Existing Commissions 

Austria was the first country to make concerted efforts towards Nazi-era restitution, establishing the Commission for Provenance Research in February of 1998, even prior to the Washington Principles, to investigate their public federal collections. The day after the Washington Conference concluded, Austria also established their Art Restitution Advisory Board (the Beirat). The Commission and Beirat now work closely together, forwarding restitution recommendations to the Federal Minister for a final decision. The Federal Minister is empowered to do so under the Art Restitution Act, which was also enacted in 1998 to authorize the return of objects. 

Not long after, in September of 1999, France created the Commission for the Compensation of Victims of Spoliation That Have Occurred Due to the Anti-Semitic Legislation in Force During the Occupation (CIVS). The CIVS, now called the Commission for the Restitution of Property and the Compensation of Victims of Anti-Semitic Spoliations, has expanded several times since. Originally bound to cases committed in France from 1940 to 1944, the CIVS is now competent to advise on anti-Semitic spoliation in any country influenced by Nazi Germany between 1933 and 1945, if that cultural property now resides in a French public collection. In February of 2024, a new law went into force finally enabling restitution from French national holding institutions. This was previously barred by the principle of inalienability, which prohibits the deaccessioning of cultural property held in the public domain.

The United Kingdom established its Spoliation Advisory Panel (SAP) in 2000 to hear claims on cultural property lost from 1933 to 1945, now held in a national collection. Given the United Kingdom was never occupied by the Third Reich, cases tend to focus on problematic provenance for pieces that were later imported to the United Kingdom. Even with the SAP’s establishment, the United Kingdom was not able to actually effectuate restitution until 2009. The Holocaust (Return of Cultural Objects) Act was passed that year to confer power on museums to deaccession items on certain grounds related to the Nazi era. The law was originally valid for 10 years only, but a 2019 amendment removed the ten-year limit to enable future claims. Recent efforts also show progressive signs of reducing the United Kingdom’s otherwise steadfast barriers to removing property from national collections.

The Netherlands took action in 2001 to create its Advisory Committee on the Assessment of Restitution Applications for Items of Cultural Value and the Second World War  (Restitutions Committee). In cases involving artwork held by the Dutch state, the Restitutions Committee presents non-binding advice to the Minister of Education, Culture, and Science. Alternatively, for independently held artwork, the commission issues binding advice between private parties who choose to go through the panel as an alternative dispute mechanism. 

Until this year, Germany’s Beratende Kommission had from its creation in 2003 operated under an applied theory of subsidiarity, which encourages decisions be made at a local level rather than by a central authority. This meant the commission would issue non-binding recommendations only where a claimant and museum first attempted to reach a bilateral settlement, failed to achieve that settlement, and then jointly agreed to submit their case. This limitation’s practical effect led to most disputes never being heard at all. However, in January, Germany approved a major reform in recognition of this, introducing a new tribunal, the Arbitration Court for Nazi-Looted Property. The new system will involve a binding, unilaterally accessible arbitration process. 

Regional Developments

This move by Germany is representative of a larger, continuous push to advance restitution measures. The sheer creation of commissions by Austria, France, Germany, the Netherlands, and the United Kingdom all demonstrate a sincere effort to carry out the aims put forth at the Washington Conference. Given civil law jurisdictions in Europe tend to afford protection to good-faith buyers in cases of stolen property, the presence of commissions can be especially impactful to ultimate ownership outcomes. Were it not for the establishment of these commissions, it is likely that most claims would be otherwise dismissed on statute of limitations grounds. 

While national-level forums bring great value, claims involving multiple nations can encounter more friction when faced with structural inconsistencies. In efforts to facilitate greater cross-border harmony, the European states reconvened at the 2017 London Conference, titled “70 Years and Counting: The Final Opportunity?” The given title stressed that even decades later, the response to Holocaust Era Assets remained inadequate. Accordingly, this Conference was predicated on the idea that it “not become simply another set of lukewarm promises.” While the 2017 London Conference acknowledged the structural differences between the committees, cooperative barriers have persisted. 

In 2019, the five countries established the Network of European Restitution Committees on Nazi-Looted Art, which aims to link the existing commissions to enable information sharing, joint action filings, and align endeavors. In the same year, a guide was published to aid both researchers and claimants in understanding the workings, and differences, of each commission. The Network maintains that “fair and just solutions for the spoliation of artwork can only be made effectively at international level: the mobility of looted cultural property adds to the geographic dispersal of victims.” 

International Developments

This persisting need to combine efforts on a more global scale has prompted multiple international follow-ups to the Washington Conference. The first, in 2009, produced the Terezin Declaration on Holocaust Era Assets and Related Issues, which recognizes that a substantial portion of property has yet to be restituted or compensated and explicitly urges those nations that have not already done so to establish mechanisms that can better assist claimants. 

Additionally, the Terezin Declaration asserts that restitution or compensation should be “expeditious, simple, accessible, transparent, and neither burdensome nor costly to the individual claimant.” The much more recent 2024 Best Practices for the Washington Principles on Nazi-Confiscated Art, procured fifteen years after Terezin, continues to stress the need for appropriate arbitration mechanisms.

“Countries are encouraged to create an independent expert body whose composition may be the states’ responsibility, to which unilateral access is available that can adjudicate cases of art and cultural property and arrive at or recommend a binding or non-binding decision (for example, the use of commissions in Austria, France, Germany, Netherlands, and the United Kingdom). Such bodies should have balanced, expert, and representative membership. Use of alternative resolution mechanisms is encouraged to avoid litigation.”

While the Terezin Declaration and the Best Practices reflect continued, good-faith efforts, they also demonstrate that progress has been slow. Even so, the revisitations have instituted change and kept Nazi-era restitution at the forefront of conversations. For example, Germany’s shift this year to allow for unilateral appeals responds to the Best Practice’s call for claimants to have access to panels, even if the current owner does not consent. This illustrates major framework adjustments remain not only ongoing, but achievable. 

Conclusion 

With this year marking the 80-year anniversary since the end of World War II, the issue of Nazi-era restitution has received varying degrees of attention globally. In the many places where victims and heirs are restricted to seeking restitution through the courts, contested ownership is unlikely to result in the aim of “just and fair” solutions as set in 1998. The prospects of existing commission frameworks can serve as a guide for the creation of new panels in countries that have yet to participate. Their limitations can also serve as a lesson into what should be avoided and amended. Irrespectively, the global displacement of art and cultural property resulting from the Nazi-era demands collaborative efforts across borders.

* Eleanor Gartstein is a second-year law student at the University of California, Berkeley School of Law. She holds a B.B.A. in International Business and a B.A. in Art History from the University of Texas at Austin. Her academic interests include international cultural heritage policy, art market regulations, restitution efforts, and museum issues.

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