Dirty Money, Pretty Art: Research on Money Laundering in the Age of Art Financialization

What is the current nature and extent of money laundering on the art market in times of an increasing financialization of art? Supervised by MACCH-affiliated researcher Christoph Rausch, students at Maastricht University conducted two research projects on this topic commissioned by the Dutch Police and the Platform Veilig Ondernemen Limburg (PVOL). The results have been presented to a consortium of government agencies and financial institutions advising on trends for financial investigation, as well as in an EU Commission Expert Group Meeting.

Recent cases of large-scale global financial crime, such as the 1MDB scandal or the revelations of the Panama papers and FinCEN files, all feature high profile examples of money laundering through art. These cases are linked to broader developments, such as an explosion of prices for high-end art and the emergence of more and more financial services around art (e.g., the possibility to use artworks as collateral for loans). As a result, criminals looking for opportunities to launder money may increasingly be active on the art market and even the US Department of the Treasury has officially warned the art trade and the financial world of the associated risks and sanctions. Yet hardly any reports of dubious practices and transactions are filed by actors in art and finance. Data from the Dutch Financial Intelligence Unit confirms that compared to other branches of trade in high-value goods (such as the housing and vehicle markets) relatively few cases of money laundering through art have been reported.

To provide an overview of the possible problems and to advise the police and PVOL on a suitable approach, students at Maastricht University carried out two interdisciplinary research projects in 2018 and 2020. Based on literature reviews and qualitative interviewing, the resulting research reports provide insights into applicable legislation, exemplary criminal cases, and law enforcement practices. Following an analysis of (differing) perceptions within the art market and government agencies, recommendations for a constructive dialogue between relevant stakeholders were made with the aim of developing effective anti-money laundering and anti-corruption strategies. This advice was subsequently shared with and discussed in Trends4FI, a pool of government officials and finance professionals, and among EU experts. The collaboration between MACCH, the police and PVOL also resulted in a forthcoming article in a special issue on art crime of Justitiële Verkenningen.