By Tayga Karaz
When asked what first comes to mind when mentioning the art trade, glamorous auction halls with wealthy bidders competing to win a painting by Da Vinci or Picasso might come to mind. Those who have the privilege of purchasing art, are often viewed as individuals of high cultural capital and good taste. While these stereotypes may sometimes be true, there is a darker reality that lies beneath the surface of the business. The art market has evolved into a haven for money laundering, providing organised crime with a seemingly sophisticated avenue for investments. Shielded against devaluation and operating amidst a lack of regulatory oversight, the art market has become a playground for international mafia groups seeking to legitimise their illicit wealth.
The symbiotic relationship between the mafia and the art world is vividly exemplified in Italy, where between 2015 and 2019, 18 billion euros worth of real estate and goods were confiscated from criminals. Surprisingly, much of the artwork seized had been purchased legally by the mafia. This revelation underscores the art world's role as a conduit for criminals to transform their illegal wealth into seemingly lawful funds. The prestige of the international art business belies its darker reality, where the proceeds of human trafficking and drug trade find an unexpected sanctuary in the works of renowned artists like Picasso, Dali, and Modigliani.
Across the globe, Art Crime Departments are expanding within intelligence organisations, with the FBI in the United States standing out as a notable example. Stolen art and cases of forgery are rampant, revealing the illicit underbelly of the art market. Anonymity, long cherished by art buyers and sellers, is undergoing a transformation. In 2017, Christie’s Auction House made a groundbreaking move, requiring agents to disclose the names of the owners they represent, signalling a shift toward increased transparency
Unlike sectors such as banking, casinos, and currency exchange, art sellers in the US and Europe operate without the obligation to report large cash transactions to government agencies. Despite some regulatory measures in the EU and the United Kingdom, anti-money laundering laws are often not applicable to art transactions worldwide. Switzerland, known for its lenient financial regulations, provides a glaring example, where art transactions are exempt from anti-money laundering laws as long as payments over 100,000 CHF are not made in cash.
The United States, a global leader in the art market, maintains some of the most relaxed rules and regulations. This leniency was exploited by Russian oligarchs Arkady and Boris Rotenberg, who allegedly bypassed US sanctions by using shell companies to purchase over 18 million USD in New York City. Recent moves in New York to further deregulate the auction industry, eliminating the need for licences, raise concerns about the potential for increased involvement of organised crime in the art trade.
As the global art market continues to flourish, its shadowy undercurrents pose a threat to its integrity. The intersections between mafia money and the art world, coupled with regulatory loopholes, creates an environment ripe for exploitation.
Sources:
https://baselgovernance.org/sites/default/files/2023-04/230412-quickguide_29.pdf
Bowley, Graham, e Robin Pogrebin. «New York City Eliminates the Rules That Govern Art and Other Auctions». The New York Times. NYTimes.com, https://www.nytimes.com/2022/05/03/arts/design/nyc-auction-rules-sothebys-christies.html.
Bowley, Graham, e William K. Rashbaum. «Has the Art Market Become an Unwitting Partner in Crime?» The New York Times, 19 febbraio 2017. NYTimes.com, https://www.nytimes.com/2017/02/19/arts/design/has-the-art-market-become-an-unwitting-partner-in-crime.html.