Financial Action Task Force Report’s anti trade approach rings alarm bells

Financial Action Task Force Report’s anti trade approach rings alarm bells

Just released, the Financial Action Task Force’s new report, Money Laundering and Terrorist Financing in the Art and Antiquities Market, takes a highly irresponsible approach.

The FATF is an independent global body investigating crime whose reports should prove key to policy making. Not this one, however.

Arguably the most salient conclusion it comes to is as follows: “The markets for art, antiquities and other cultural objects are diverse in size, business models and geographic reach. Most are relatively small, and the vast majority of participants have no connection to illicit activity.”

However, this is buried deep in the text, while the FATF has focused on launching the report with a headline grabbing video that gives the clear impression that the art market is awash with criminals committing offences linked to money laundering and terrorism financing.

Needless to say, anti-market forces have leapt on this to condemn the trade and demand further legal restraints, while ignoring the lack of substance in the report or the fact that rigorous anti-money laundering laws already apply in the UK, for instance.

As with so many other reports of this ilk, fact checking has been a casualty. The most important initial independent statistic the report quotes as it launches into its arguments is wrong. In paragraph 3 of the Introduction Background on page 5, it notes that the United Nations Office on Drugs and Crime (UNODC) “has estimated that in 2011, as much as USD 6.3 billion in illicit proceeds could have been laundered through or associated with the trade in cultural objects”. In fact, the figure, which was sourced from House of Commons Select Committee evidence in 2000 – now almost a quarter of a century ago – does nothing of the sort as CINOA’s Bogus Statistics report proves. FATF has simply taken UNODC’s word for it, thereby adding to the dissemination of fake news. This being the case, how reliable is the rest of the report?

The FATF’s work is important, so it is a shame that it, too, appears to have fallen into the trap of putting publicity before purpose in drawing attention to itself to justify its existence.

Further analysis of the report will follow.