Self-Regulation In The Art World And The Need To Prevent Money Laundering

Despite all the economic doom, the art trade remains, unsurprisingly resilient. Art has always sold well, even in times of economic despair. As companies’ plunge and stocks drop, art has always had a perplexing way of keeping its original value and also gaining in monetary worth. The value of art is derived from its combination of authenticity and perceived rarity. Art reflects who we are as a society, individuals, and institutions. It portrays a culture, history, and heritage of civilization. The more valuable art becomes, the more criminal activity that will follow, such as money laundering. Dealers and purchasers need to be on their guard because art trades remains one of the most prosperous industries, even during times of recession. One

It is essential to ensure that each institution, such as auction houses, museums, independent buyers, etc. have an effective compliance programming in determining the authenticity and provenance of the artwork. In the article, “Self-Regulation in the Art World and the Need to Prevent Money Laundering,” Sanctis explains the law behind proper vigilance and Suspicious Activity Reports. Appropriate procedures must be put in place to monitor and identify unusual occurrences. Reporting system must include even unique identifiers, management alerts, the report itself and its generation (Sanctis, 2014). It is essential for institutions to have adequate personnel to identify, research, and report suspicious activities to protect their businesses. International auction houses in the United States all follow the Commercial code, which does not restrict the use of cash as a form of payment. They may accept cash payments with no knowledge of illegality or whether the money comes from unlawful activity, but are under obligation to report cash payments in transactions of ten thousand dollars or more (Sanctis, 2014). Because businesses are self-regulated, they must note suspicious activity, even if it means their company is losing money. Closer attention to banking needs to be done to fill loopholes, in which ordinary criminal law has been