Moreover, the Corporate Transparency Act, passed with AMLA, establishes a national beneficial ownership registry aimed at shell companies that financial institutions will be expected to use in customer due diligence.
These developments form part of a larger drive in the US to curb illicit finance. Last December, the White House issued the first ever US strategy on countering corruption, heralding an expansive all-of-government effort to crack down on international corruption, including through enhanced domestic anti-money-laundering efforts.
The strategy endorsed Fincen’s efforts to regulate the art and antiquities markets and also highlighted the White House’s co-operation with the US Congress to focus on “gatekeepers”, such as in the bipartisan Enablers Act.
The strategy also stated that the US Treasury Department will revisit a 2015 proposed rule that would require AML programmes and SAR reporting for investment advisers who are currently exempt from the BSA. So, financial advisers themselves may be facing additional regulation through other laws, irrespective and in addition to their participation in the art and antiquities markets.
Although most financial advisers are well aware of their existing obligations, they should monitor the expanding scope of regulations around art and antiquities, and the larger backdrop of increasing enforcement against bad actors who take advantage of these markets. Otherwise, they may find themselves subject not only to enhanced compliance, due diligence, and reporting obligations, but at risk of law enforcement investigation or left with abruptly de-valued client investments due to fraud or forfeiture.
Mike Lamson (counsel, Hong Kong SAR), Meredith Riley (senior US associate) and Francesca Bonner-Evans (managing associate, London), all work within the Dispute Resolution practice at Linklaters
