Cultural Property Crime on the U.N. Agenda: Upcoming Crime Conference Set to Tackle Heritage Trafficking

When the U.N. Security Council last month adopted a resolution targeting terrorists' ability to raise money, cultural heritage trafficking took a visible spot on the global stage. Now the U.N. Congress on Crime Prevention and Criminal Justice is set to address the topic at its April meeting in Doha, Qatar.

Representatives from Qatar meet with the U.N. Office on Drugs
and Crime in preparation for the Crime Conference in April.

A pre-conference document frames the discussion for next month’s quinquennial gathering of governments and experts in criminal justice. The document cautions, “Trafficking in cultural property and related offences are believed to be a constantly growing sector of criminality, and an increasingly attractive one for national and transnational criminal organizations.”

Conference participants are expected to urge U.N. member states to embrace the International Guidelines for Crime Prevention and Criminal Justice Responses with Respect to Trafficking in Cultural Property and Other Related Offences, adopted by the U.N. General Assembly in October 2014.

The preamble offers straightforward explanations about why the Guidelines were written, and articulates some important clauses:

 Alarmedat the growing involvement of organized criminal groups in all forms and aspects of trafficking in cultural property and related offences, and observing that illicitly trafficked cultural property is increasingly being sold through all kinds of markets, inter alia in auctions, in particular over the Internet, and that such property is being unlawfully excavated and illicitly exported or imported with the facilitation of modern and sophisticated technologies,
…  

Reiterating the significance of cultural property as part of the common heritage of humankind and as unique and important testimony of the culture and identity of peoples and the necessity of protecting cultural property, and reaffirming in that regard the need to strengthen international cooperation in preventing, prosecuting and punishing all aspects of trafficking in cultural property[.]

The Guidelines promote prevention strategies, criminal justice policies, and methods of international cooperation to combat cultural heritage crime. They range in scope from “improving statistics on import and export of cultural property” to encouraging “the widest possible mutual legal assistance in investigations, prosecutions and judicial proceedings.”

Of significance is the Guidelines’ call to transform perceptions of heritage crime from a novelty offense to a serious criminal enterprise that demands a strong legal response. They recommend that nations

consider criminalizing, as serious offences, acts such as:(a) Trafficking in cultural property;(b) Illicit export and illicit import of cultural property;(c) Theft of cultural property (or consider elevating the offence of ordinary theft to a serious offence when it involves cultural property);(d) Looting of archaeological and cultural sites and/or illicit excavation;(e) Conspiracy or participation in an organized criminal group for trafficking in cultural property and related offences;(f) Laundering, as referred to in article 6 of the Organized Crime Convention, of trafficked cultural property.

The U.N. Convention Against Transnational Organized Crime characterizes a “serious offence” as a crime that is punishable by at least four years in prison.

Further updates about the upcoming U.N. Crime Congress may be found here.

Photo credit: United Nations

Text copyrighted 2015 by Cultural Heritage Lawyer. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of this post without the express written consent of CHL is prohibited. CHL is a project of Red Arch Cultural Heritage Law & Policy Research, Inc.

Money Laundering and the Trade in Cultural Property: Taking a Fresh Look at Federal AML/CTFs

Mark Vlasic, former head of the Stolen Asset Recovery Initiative, noted in Thursday's Huffington Post blog post titled "An Allied Effort to Save History" that

after the post-9/11 crackdowns on terrorist financing, law enforcement has reported a marked increase in antiquities and other artworks being used to launder money (in fact, one agent told us that money laundering cases make up the bulk of their art investigations, not repatriations).

But anti-money laundering as well as counter-terrorism financing laws (AML/CTF) are often limited when it comes to the trade in cultural property. That is because the cultural property markets in art, antiquities, fossils, etc. are not explicitly covered by AML/CTFs.

The U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) describes money laundering this way:

Money laundering is the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean"). Typically, it involves three steps: placement, layering and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the financial system through additional transactions until the "dirty money" appears "clean."

With respect to the art market, a 2012 Basel Institute on Governance report titled Basel Art Trade Guidelines, observes:

In comparison with other trade sectors, the art market faces a higher risk of exposure to dubious trade practices. This is due to the volume of illegal or legally questionable transactions, which is noticeably higher in this sector than in other globally active markets. Far more serious than shady dealings in a legal grey area, the sector’s shadow economy encompasses issues ranging from looted art, professional counterfeiting and fake certificates to the use of art sales for the purpose of money laundering.

There are several federal AML/CTF laws and regulations, the main ones being the Bank Secrecy Act (BSA) and the USA PATRIOT Act. They are tailored to detect international money laundering and terrorist financing in the banking, financial, and investment sectors by establishing compliance programs designed to report suspicious activities, verify customer identities (so-called Know Your Customer programs), disclose high value transactions, and more. Banks, casinos, and securities brokers are among the industries covered by the BSA. The USA PATRIOT Act, meanwhile, covers a wide swath of fields beyond banking, financial services, and investment institutions. They include travel agencies; pawnbrokers; dealers in precious metals, stones or jewels; and more. Explicitly absent from the list are dealers in art, antiquities, and other cultural materials.

Some countries' AML/CTF laws cover art, antiquities, and/or antiques dealers directly. Argentina, Brazil, Japan, and Lithuania are a few. (A thumbnail sketch of AML/CTF laws can be found here and here.) While Internal Revenue Code 6050I and 31 USC § 5331 direct business operators in the U.S.--including sellers of cultural objects--to document sales transactions over $10,000 on IRS Form 8300, the major AML/CTF laws, once again, do not explicitly mention dealers in art, antiquities, and other cultural materials.

Yet the U.S. Department of State's INL Office of Anti-Crime Programs specifically cites "art dealers" when referencing AML/CTF goals. By way of background, the U.S. is a member of the Financial Action Task Force (FATF), an inter-governmental body that "set[s] standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system." FATF identifies illicit trafficking of cultural goods, counterfeiting of antiquities, and the illegal trade of antiquities as facilitators of money laundering and terrorist financing in a 2013 report. With regard to FATF, the State Department declares on its web site that one of its objective is to help countries

implement the Financial Action Task Force (FATF) standards, which mainly address: (a) the types of AML/CTF laws and regulations a country should have; (b) the agencies a country should establish (financial intelligence units (IUs), regulatory agencies, specialized law enforcement and prosecutorial authorities); (c) the reporting regime and the entities within and outside of the financial sector that should be obliged to file reports (e.g., banks, money remitters, exchange houses, securities brokers, mutual funds, insurance companies, casinos, lawyers, accountants, realtors, art dealers, etc); and (d) the sharing of non-evidentiary information via the FIU and evidentiary information via MLATs and MLAAs to generate cooperation with other countries to ensure conviction of launderers. (Emphasis added).

Spotlighting black market antiquities with record-keeping laws has already been proposed by CHL. But identifying and targeting both money laundering and terror financing that is entangled within the legitimate cultural property trade should also involve a fresh look at federal AML/CTFs, and maybe some changes.

Photo credit: Levy Choi

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2010-2014 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited.  CONTACT INFORMATION: www.culturalheritagelawyer.com

Using MLATs in State Court Cultural Property Prosecutions

Many more receiving stolen property cases are handled in state courts rather than federal courts. Whether the cases involve illegally possessed, transported, or sold jewelry, cars, computers, or other stolen objects, these criminal matters are routinely heard by state, county, and local judges applying state law. That is why prosecutors should be familiar with their state's laws that can target those who receive stolen cultural property originating from foreign nations.

All fifty states have receiving stolen property laws on the books. In about about 1/4 of the states--including art market rich New York--there are even statutes that presume criminal knowledge in cases involving dealers. New York Penal Law 165.55 states: "[A] person in the business of buying, selling, or otherwise dealing in property who possesses stolen property is presumed to know that such property was stolen if he obtained it without having ascertained by reasonable inquiry that the person from whom he obtained it had a legal right to possess it."

But how do state authorities build effective cultural property criminal cases in situations where evidence may be located overseas? That is where Mutual Legal Assistance Treaties (MLATs) may help.

Prosecutors were reminded about MLATs last week during a conference titled "Current Challenges and Strategies in the Fight against Transnational Crime," sponsored by the National Association of Attorneys General and the International Association of Prosecutors.

In a world of more extensive shipping, communications, and travel, MLATs give law enforcement authorities greater ability to gather critical information across international borders.

MLATs specifically allow prosecutors to call on foreign assistance to help them examine objects and sites, locate or identify persons of interest, serve documents, take witness statements, and execute requests for searches and seizures.

Because taking down contraband traffickers depends on the old rule of "following the money," MLATs may be the right tool needed to identify overseas criminal money pipelines. Indeed, MLATs have been used successfully to acquire financial and banking records legally from treaty partners.

Negotiated by the U.S. Department of State in cooperation with the U.S. Department of Justice (DoJ), MLATs are currently in force between the U.S. and many cultural property source nations and transhipment nations. These include Belize, Canada, Cyprus, Egypt, France, Greece, Hong Kong, India, Israel, Italy, Japan, Malaysia, Mexico, Netherlands, Nigeria, Switzerland, Thailand, United Kingdom, and others.

State, county, and local prosecutors who utilize MLATs rely on the DoJ's Office of International Affairs for guidance. That office has regional specialists on staff who work to assist prosecutors at all levels of the American criminal justice system.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2010-2013 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT INFORMATION: www.culturalheritagelawyer.com