Spotlighting Black Market Antiquities with Record Keeping Laws

Antiquities traffickers make their money by selling artifacts bulldozed from archaeological sites, sawed from ancient tombs, and chiseled from revered temples. Fences often convert these legacies of civilization into cash by misusing the services of legitimate dealers and auction houses. Along the way customs documents may be forged, fake collecting histories created, and the physical signs of looting wiped clean by conservation techniques in order to make the cultural objects marketable.  But behind this facade of legitimacy, humanity's heritage vanishes.

Source: Andy Reis

Identifying and separating the black trade from the legitimate art and antiquities marketplace requires sunshine. “If the broad light of day could be let in upon men's actions, it would purify them as the sun disinfects," advised U.S. Supreme Court Justice Louis Brandeis. These words from a century ago ring true today. That is why the adoption of record keeping legislation spotlighting the sales of antiquities and other cultural artifacts should be considered by lawmakers.

Meaningful record keeping laws might require documentary evidence of transactions involving the purchase, sale, consignment, or transfer of archaeological material over 250 years old and valued at $10,000 or more, individually or collectively. Auction houses, dealers, galleries, shops, and other entities engaged in the trade of would maintain the records. To be effective, the records should minimally contain:

• Descriptions of the names and addresses of the parties involved in a transaction, a description of the cultural object, and the amount of money exchanged.

• All available import documents and export permits connected with the object.

• A description of the provenance/chain of custody/collecting history of the object known to the seller or consignor along with supporting documents, photos, affidavits, and the like when available.

• Any condition reports associated with conservation reports, insurance documents, shipping paperwork, etc.

Such record keeping laws could help identify illegal activities. As a result, authorities could more easily spot and investigate suspected antiquities trafficking. Where there was probable cause to investigate, police and prosecutors could efficiently gather potential evidence of theft, smuggling, fraud, tax evasion, money laundering, or other crimes associated with antiquities trafficking by probing relevant records. Subsequent prosecutions and/or asset forfeitures based on this evidence could then be used to take legal action against traffickers. The record keeping laws may even serve as an initial deterrent to criminals, causing them to think twice about participating in illegal antiquities transactions in the first place for fear that they would be exposed by the paper trail.

Record keeping laws, meanwhile, would elevate the market. They would bolster efforts by sellers and consignors wishing to cultivate an ethical, authentic, and profitable trade by boosting the integrity of the marketplace. Collectors, in turn, would be better protected against sales of stolen, smuggled, fake, or legally questionable merchandise.

The idea of record keeping laws to shine a light on crime that has threaded itself within lawful commerce is nothing new. The metals industry, for example, has seen an explosion of stolen copper and aluminum finding their way into the legitimate business operations of scrap metal dealers and recyclers. In response, campaigns to enact state record keeping legislation have been launched. And Sen. Charles Schumer (D-NY) last August announced an effort to pass similar federal legislation. The senate bill would make it illegal to sell scrap metal unless the seller documents ownership of the metal and supplies purchase records. Scrap dealers, meanwhile, would be required to keep detailed records of their purchases. Similar state laws exist that cover pawnbroking, another industry burdened by wrongdoers who weave stolen merchandise into legitimate commerce. Record keeping statutes benefiting the art and antiquities marketplace would be based on these precedents.

Source: Plex

Spotlighting black market antiquities would not impose any extraordinary requirement. That is because everyday business practices presumably demand the collection of basic purchase and sales information already. It is common for businesses, for example, to keep detailed records for purposes of income and sales taxes, inventory, customer service, marketing, and the like. Moreover, both Internal Revenue Code 6050I and 31 USC § 5331 mandate business operators--including sellers of antiquities--to document sales transactions over $10,000 on Form 8300. That form requires information about the identities of the parties who made and received a transaction payment, the method of payment, and a description of the transaction. This reporting requirement helps uncover money laundering that could aid terror funding, drug trafficking, or tax evasion. A New York state court decision, meanwhile, in the case of William J. Jenack Estate Appraisers and Auctioneers v. Albert Rabizadeh is expected to motivate parties in the busy Manhattan art and antiquities marketplace to more completely preserve auction sales records. The appellate court ruled that an auction contract, to be enforceable under the statute of frauds, must identify the buyers and sellers in some fashion.

Preserving provenance/chain of custody information, financial transaction records, import documents, and other records that could help spotlight black market antiquities would not be expected to place an unwieldly requirement on legitimate dealers and auction houses. Critics may still characterize the record keeping as an attempt to over-regulate.  It is true that over-regulation can be a problem both for an industry and for law enforcement, and Winston Churchill rightly observed, "If you make ten thousand regulations you destroy all respect for the law." But the art and antiquities market is already minimally regulated, built less on codified rules and more on personal relationships between sellers and collectors whose purchase agreements might even be executed by a handshake. Record keeping laws would not significantly alter the informality of the industry's culture. Rather, they would improve trust in the market by helping to protect sellers from conveying looted or forged cultural heritage; better safeguarding consumers from purchasing illegally looted, smuggled, and inauthentic artifacts; and exposing wrongdoers who use the legitimate marketplace to fence illegally acquired cultural material.

Commentators on another end of the spectrum may desire more stringent regulations. But in the same way that scrap metal record keeping legislation has needed the support of the metals industry, the adoption of art and antiquities record keeping laws must have the support of dealers, auction houses, and galleries. A more transparent marketplace would be highly desirable, but there would be little political support for policies that do not preserve the discretion found in the current marketplace. An opinion by David Hewett ("New York Auction Houses Must Reveal Consignor's Name to Buyer," Maine Antiques Digest, November 12, 2012) explains the argument favoring auction house discretion: "Consignors welcome anonymity for a variety of reasons. Some consignors do not want relatives and/or debtors to know they sold the family valuables. Museums and historical societies dread the fact that it may become public knowledge they've had to sell assets to survive. Dealers don't want it known that they're dumping dead stock."

Recognizing these privacy interests, business records should be protected from unauthorized disclosure so that transacting parties could not be identified except by consent, operation of law, a lawful request from an enforcement agency, or through judicial process. This approach strikes the right balance to garner broad support for record keeping legislation.

No one wants an art and antiquities marketplace filled with heritage supplied by thieves, smugglers, forgers, and fences who seek illegal profits.  Effective record keeping laws to identify and expose cultural property criminals should describe the details of purchase and sales transactions, the identities of parties involved, and the chains of custody of the cultural objects. Shining a spotlighting on the black market would ultimately help safeguard an increasingly endangered archaeological record and work to preserve culture. Greater confidence in the art and antiquities marketplace would result as a step is taken towards expelling the black market. Because criminal activity thrives in darkness, lawmakers should consider the adoption of laws that that illuminate the black trade.


This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com