|
An Appreciation of English Antique Furniture
A semi biographical journey of my life in the English Decorative Arts
|
|
 I have spent a fair amount of time discussing anti-money laundering (AML) with art and antique dealers because the EU, and the United States governments, consider the art and antiques business to be unregulated and ripe for strict oversight. The problem with this thinking, apart from the fact that small businesses have quite a few governmental regulatory bodies overlooking them already, is that most of these small businesses are really small--one to three people as a rule--and the oversight is just another paper work burden that is, in the grand scheme of things, likely a duplicate of what their banks are already recording. Remember, as well, that dealers do self-regulate, as all legitimate dealers know that their business rely on having a spotless reputation and that money laundering is a criminal activity. Dealer organizations do have codes of honor not unlike those you will find in other professions. Be that as it may, it looks like AML will be forthcoming for everyone in the art and antiques trade--it is just a question of the amount threshold that needs reporting. In the EU, it is currently 10,000 euros. In the US, it is 100,000 dollars but thus far is only for antiquities dealers--which is a story in itself which I will tell at some point.
What interests me about money laundering, however, is not whether it happens in the art and antiques trade--it is more likely to happen in the arts trade as the values are greater, but even then very rarely as values are too variable--is that the focus by government is on what I would call "the other". When someone (the government) knows very little about a subject (any form of art dealing) and one sees big values, there is an assumption that those numbers are typical--not just one time, but regularly within the "art business". For example, Sotheby's sold a Kandinsky for over forty-four million dollars the other day which was featured in the NY Times. It is a record for the artist and, if you read the full article, it was about the huge values and records made by a number of paintings, most of them in the six to seven figure range. From that article alone, the art world sounds like an extraordinarily lucrative business. If I were a politician, I would be all over the art business in order to insure that no illegalities were taking place. But the first thing I would do is try to get a group of art dealers to tell me how their business worked and whether they knew of or were ever asked to participate in money laundering? Who else would have better information?
This may sound naive as you would expect a group of dealers to defend their business and assert that there was no money laundering at all, but no one wants to lie or even shade the truth to someone who has the power of the government behind them and is therefore a reasonable question. On the obverse, as a legislator who wants to write laws that could plug the leaks in a financial system that permitted, tacitly or overtly, money laundering, I would feel it necessary to know the business I was trying to legislate. Interestingly, the March 6 edition of "The New Yorker" has a fascinating article called "The Price of Belief" by Ben Taub about how the German government got behind a financial technology company called Wirecard simply because it was a German company in the cyber world of financial technology, an area that the Germans were, apparently, eager to embrace. The gist of the article is that the company was a fraud, the biggest fraud in German business history, and no one wanted to believe it because the German government was gung-ho to have a German based cyber financial technology firm. To my mind, this was an ideal business to investigate--it had all the ingredients that might enable money laundering. Instead, the German government went after the whistle blowers who exposed the fraud, "The Financial Times" of London, believing they were the ones trying to scam Wirecard. It is a tale of hubris that calls into question just how governments make decisions.
The point I am making is fairly simple. Money laundering has to be an inventive endeavor with a certain reliability of outcome unless of course, you are willing to accept a very small percentage of the value you are trying to launder. Consequently, it requires thinking outside of the box. Laundering a million dollars in cash may sound simple, but buying something for $20,000to $1,000,000, and then re-sell ing it is difficult for a slew of reasons, the most obvious being that the art world--each segment of it--is a niche market. That item is known and not fresh to the market and no one will want it unless it is very cheap. In my field of English furniture, it just isn't plausible and that is equally true for the art business. Any legislator who is actually writing meaningful legislation could learn this by talking to dealers. It is common sense, but as one of my grandmothers used to say that all the world is crazy except for thee and me, and sometimes even thee is a little crazy. How right she was.
|
|
|
