{"id":10802,"date":"2025-03-12T13:04:48","date_gmt":"2025-03-12T17:04:48","guid":{"rendered":"https:\/\/journals.law.harvard.edu\/ilj\/?p=10802"},"modified":"2025-03-12T13:34:57","modified_gmt":"2025-03-12T17:34:57","slug":"fighting-money-laundering-in-the-art-market-a-comparative-overview-of-u-s-and-swiss-law","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/ilj\/2025\/03\/fighting-money-laundering-in-the-art-market-a-comparative-overview-of-u-s-and-swiss-law\/","title":{"rendered":"Fighting Money Laundering in the Art Market \u2013 A Comparative Overview of U.S. and Swiss Law"},"content":{"rendered":"

Editor\u2019s Note: This article is part of a collaboration between the Harvard Art Law Organization and the Harvard International Law Journal<\/em>.<\/p>\n

*Enzo BASTIAN<\/strong><\/p>\n

I.\u00a0 \u00a0Introduction<\/b><\/h3>\n

The connection between money laundering and the art market was first identified as early as the 20th century (<\/span>De Sanctis<\/span><\/a>; <\/span>Roth<\/span><\/a>). However, it is recent international scandals, such as those revealed by the Panama Papers, that have intensified regulatory scrutiny of the art market (<\/span>Roth<\/span><\/a>;<\/span> Cassani\/Heninger<\/span><\/a>; <\/span>Kern<\/span><\/a>). In the European Union (EU), this oversight began in 2018 with the implementation of the Fifth Anti-Money Laundering Directive (<\/span>AMLD\u00a0V<\/span><\/a>), which brought art market participants under the scope of anti-money laundering\u00a0(AML) and counter-terrorism financing\u00a0(CTF) regulations. This framework was further reaffirmed in\u00a02024 with the adoption of the EU\u2019s first Anti-Money Laundering Regulation\u00a0(<\/span>AMLR<\/span><\/a>).<\/span><\/p>\n

Similarly, in February 2023, the Financial Action Task Force (FATF) \u2014\u00a0a leading international organization in the fight against money laundering\u00a0\u2014\u00a0published a report specifically addressing the risks of money laundering in the art market (<\/span>FATF, Report<\/span><\/a>). The FATF emphasized the vulnerability of the art market to illicit activities and urged member states to implement robust countermeasures.<\/span><\/p>\n

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\u00a0(<\/span>U.S. Senate, Report<\/span><\/a>). This was followed by a comprehensive study published by the U.S. Department of the Treasury in February\u00a02022 (<\/span>U.S. DOT, Report<\/span><\/a>). 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\u00a042% of its total value in 2023 (<\/span>UBS\/Art Basel, Report 2024<\/span><\/a>).<\/span><\/p>\n

The lack of comprehensive regulation on this issue is not unique to the United\u00a0States. Switzerland, which represented 3% of the global art market\u2019s total value in 2023\u00a0(<\/span>UBS\/Art Basel, Report 2024<\/span><\/a>), also faces significant regulatory deficiencies concerning money laundering in the art sector.<\/span><\/p>\n

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\u00a0(II.) and repressive mechanisms\u00a0(III.) before concluding with some final observations\u00a0(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., <\/span>U.S. DOT, Report<\/span><\/a>; <\/span>Hufnagel\/King<\/span><\/a>; <\/span>Dagirmanjian<\/span><\/a>; <\/span>Turner<\/span><\/a>; <\/span>Cassani\/Henninger<\/span><\/a>).<\/span><\/p>\n

II.\u00a0 \u00a0Money Laundering Prevention<\/b><\/h3>\n

In addressing the fight against money laundering, it is essential to focus on the so-called preventive rules \u2014\u00a0those 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:<\/span><\/p>\n