Antiquities Trafficking Bathed in Sunshine: Disclosures of Shell Company Owners and Suspicious Financial Transactions May Be on the Horizon if the NDAA Becomes Law

The National Defense Authorization Act's anti-money laundering sections would shine a light on antiquities trafficking by revealing the true owners of shady antiquities import companies and by enlisting the help of antiquities dealers to report suspicious money transactions under the BSA.

Antiquities traffickers will find it difficult to hide smuggled archaeological imports behind anonymous shell companies and shifty payments if a popular bill winding its way through the halls of Congress is enacted into law this year. That would be welcome news to lawyers and law enforcement officials hoping to spread sunshine on an opaque cultural heritage market that is vulnerable to abuse by smugglers, fences, and money launderers.

Within the 4500+ pages of the William M. (Mac) Thornberry National Defense Authorization Act (NDAA) (H.R. 6395), a compromise bill to approve $740.5 billion in military and defense spending, are national security provisions that include money laundering counter-measures. One section requires company beneficial ownership information to be documented. Another enlists antiquities dealers to report murky financial transactions in line with the Bank Secrecy Act's (BSA) filing requirements.

Law enforcement officers investigating trade fraud, receiving stolen property, and illicit financial flows connected with antiquities trafficking currently are hampered by statutes that permit corporations like import companies to be created in some states without recording their true owners. Meanwhile, unlike sellers of precious metals, stones, and jewels, antiquities dealers are not required to report suspicious financial transactions to authorities. Adoption of the NDAA would change this legal landscape considerably.

The NDAA enjoys bi-partisan support and already has passed both chambers of Congress by large majorities. The White House in recent days, nevertheless, has threatened to veto the bill unless certain legal protections for Big Tech giants are repealed. Because the Senate recently adopted changes to the House version of the legislation, followed by conference committee action that resulted in the filing of a conference report on Thursday, the NDAA will be sent back to the House for its approval. That chamber may take up the bill as early as next week. Retiring Rep. Mac Thornberry [R-TX], for whom the bill is named, remarked, "This year’s bill passed the House by a vote of 295 to 125 and passed the Senate 86 to 14. The conference agreement is an even stronger bill for U.S. national security and should be supported."

[UPDATES December 8, 2020 - The White House signaled opposition to the legislation, saying that it wants an "improved NDAA," explaining that it "fails to include critical national security measures, includes provisions that fail to respect our...our military’s history, and contradicts efforts...to put America first in our national security...." The House, meanwhile, adopted the conference agreement 335-78. December 11, 2020 - The Senate approved the conference report by a vote of 84-13. December 23, 2020 - The White House vetoed the legislation. December 28, 2020 - The House voted 322-87 to override the President's veto. January 1, 2021 - The Senate voted 81-13 to override the President's veto. Therefore, the NDAA has been enacted into law.]

The sense of Congress, articulated in the conference report, is that "more than 2,000,000 corporations and limited liability companies are being formed … each year" while "malign actors seek to conceal their ownership … to facilitate illicit activity." "[M]oney launderers and others involved in commercial activity," note lawmakers, "intentionally conduct transactions through corporate structures in order to evade detection, and may layer such structures, much like Russian nesting 'Matryoshka' dolls, across various secretive jurisdictions…." The conference report expresses Congress’ aim to “close[] significant AML-CFT gaps, including by adding the trade in antiquities to coverage under the BSA.”

Channeling the language of previously filed legislation known as the Corporate Transparency Act, Section 885 of the NDAA conference agreement authorizes the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to securely collect company beneficial ownership information, specifically the names, dates of birth, and addresses of the actual owners of corporations, limited liability companies, and similar entities formed under state law. Stripping anonymity away from the true owners of companies and unveiling their identities to law enforcement will, according to the conference report, "protect vital United States national security interests."

Section 6110 of the NDAA, meanwhile, expands the BSA’s reporting requirements to those "engaged in the trade of antiquities, including an advisor, consultant, or any other person who engages as a business in the solicitation or the sale of antiquities," requiring these parties to forward a Suspicious Activity Report (SAR) to FinCEN when a financial transaction appears criminal. CHL has urged this legal reform in blog posts since 2014.

But similar BSA reporting requirements for art dealers, advisors, consultants, and others engaged in the art trade will have to wait. That’s because the NDAA conference agreement simply calls on "Treasury and its law enforcement partners [to] further study the risks posed by the facilitation of money laundering through the trade in art" in order to determine, among other issues, "the extent to which the facilitation of money laundering and terror finance through the trade in works of art may enter or affect the financial system of the United States."

Art dealers came into particular focus earlier this year when the Senate Committee on Homeland Security and Government Affairs released "The Art Industry and U.S. Policiesthat Undermine Sanctions," a July 2020 investigative report urging lawmakers to add the high-end art market to the list of business sectors that must comply with the BSA, calling the art trade "the largest legal, unregulated market in the United States."

Applying BSA reporting requirements to both art and antiquities dealers has been tried unsuccessfully in the past.

Should the NDAA be enacted into law, the Treasury Department must write regulations to implement the legislation. Any proposed rules would be subject to public comment.

Text and original photos copyrighted 2010-2020 by Cultural Heritage Lawyer Rick St. Hilaire, a blog commenting on matters of cultural property law, art law, art crime, cultural heritage policy, antiquities trafficking, looted, antiquities, stolen relics, smuggled antiquities, illicit antiquities, museum risk management, and archaeology. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are for informational purposes only and do not constitute legal advice. Retain a lawyer to receive legal help. The provision of this information to the reader, moreover, in no way constitutes an attorney-client relationship. Blog url: culturalheritagelawyer.blogspot.com.

OFAC Puts High-Value Art Market Participants on Notice

The Office of Foreign Assets Control has issued an Advisory calling for due diligence on the part of dealers, museums, and other high-end market participants to comply with U.S. sanctions regulations on blocked persons.

When the Office of Foreign Assets Control (OFAC) publishes an Advisory that warns a particular business sector to maintain compliance, that typically means the U.S. Treasury Department's enforcement agency is serious about targeting an identified national security risk. On Friday, OFAC broadcast an alert to "art galleries, museums, private art collectors, auction companies, agents, brokers, and other participants in the art market" when it issued its Advisory and Guidance on Potential Sanctions Risks Arising from Dealings in High-Value Artwork.

The October 30 Advisory, while not legally binding, strongly indicates OFAC's enforcement posture and its likely response if an art market participant were to commit a sanctions violation. The issuance of the advisory suggests that the agency will take four factors into account when probing an offense, having given notice that

1. there are "sanctions risks arising from dealings in high-value artwork associated with [blocked] persons ... including persons on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List),
   
   
2. "[h]igh-value artwork transactions may play a role in blocked persons accessing the U.S. market and financial system in violation of OFAC regulations,"
   
   
3. "maintaining a risk-based compliance program to mitigate such risks" that applies "risk-based due diligence" is vital, and
   
   
4. "the “Berman Amendment” to the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) does not categorically exempt all dealings in artwork from OFAC regulation and enforcement. " In other words, just because the IEEPA safeguards Americans' rights to exchange "information or informational materials," including "artworks" under 50 U.S.C. § 1702(b)(3), does not mean that the transfer of art is excluded from sanctions enforcement. "[T]o the extent the artwork functions primarily as an investment asset or medium of exchange," OFAC will enforce the sanctions law, according to the advisory.

In sum, OFAC's Advisory recommends that a "U.S. person considering a transaction with a blocked person involving high-value artwork [$100,000+] should seek guidance or a license from OFAC."

Brooklyn Man Indicted for Egyptian Artifact Smuggling. Did COVID-19 Impact Grand Jury Selection?

Man who arrived at JFK Airport and indicted for allegedly possessing illicit Egyptian artifacts had unfair jury panel, defense lawyer suggests.

Ancient Egyptian canopic jar lids are some
of the antiquities seized by Homeland Security.

"Loose sand or dirt came out of the suitcases as they were opened," and there was the smell of "wet earth," recited the arrest warrant affidavit filed in U.S. v. Eldarir, an antiquities smuggling case pending in a New York federal district court.

Now a veteran defense lawyer has challenged the criminal prosecution by suggesting that the COVID-19 outbreak interfered with the selection of a fair grand jury.

Homeland Security Investigations (HSI) arrested Ashraf Omar Eldarir of Brooklyn in February. The court released him on $60,000 bond and placed the case under seal, which has since been lifted.

A grand jury sitting in the Eastern District of New York (E.D.N.Y.) indicted Eldarir five months later on two counts of smuggling under 18 U.S.C. § 545, alleging:

On or about April 18,2019, within the Eastern District of New York and elsewhere, the defendant ASHRAF OMAR ELDARIR, also known as "Omar Eldarir," did knowingly, intentionally and fraudulently import and bring into the United States merchandise contrary to law, to wit: one ancient Egyptian polychrome relief [and] ... approximately 590 Egyptian artifacts and pieces thereof.

A grand jury indictment simply initiates a criminal case; it is not a finding of guilt. The defendant is presumed innocent unless the government proves guilt beyond a reasonable doubt.

In addition to criminal penalties, prosecutors seek criminal forfeiture of the cultural artifacts pursuant to 18 U.S.C. § 982, which include ancient Egyptian shabtis, gold artifacts, coins, panels, masks, and canopic jar lids in addition to Greco-Roman rings, stele, and a torso.

Attorney Marietou Diouf, who joined the U.S. Attorney's Office in 2020 and previously served as an E.D.N.Y. law clerk, leads the prosecution. She is pitted against experienced Assistant Federal Defender Kannan Sundaram, who has raised the specter of irregularities surrounding the grand jury's selection.

"The unusual circumstances of the indictment—the grand jury sat in Central Islip as opposed to Brooklyn, at a time when most members of the public in the Eastern District of New York were still under a stay-at-home order—may have compromised the defendant’s right to a grand jury selected from a fair cross section of the community," argued Attorney Sundaram in a letter to the court that asked to probe juror records. AUSA Diouf countered that the grand jury "was empaneled ... many months before the start of the pandemic—and has remained empaneled since then. And ... the Grand Jury was selected from a list of residents drawn from all five counties of the Eastern District of New York."

Cultural Property Lawyers Take Note: ABA Ethics Opinion Warns About Criminal Clients

Does a potential client want to commit an antiquities trafficking crime? The cultural property lawyer needs to find out.

One way cultural heritage traffickers cover their tracks, wash dirty money, and blanket themselves with business legitimacy is by hiring reputable professionals to manage seemingly lawful transactions, which is why accountants, freight forwarders, customs brokers, conservators, dealers, auctioneers, academics, art advisors, and appraisers may be solicited to handle looted and smuggled artifacts

Because traffickers and cash launderers may also try to retain legal counsel to move contraband archaeological, ethnological, and religious objects into the antiquities market, a cautionary ethics opinion issued by the American Bar Association (ABA) should prompt cultural property lawyers and customs attorneys to ask probing questions.

"A lawyer may ... face criminal charges or civil liability, in addition to bar discipline, for deliberately or consciously avoiding knowledge that a client is or may be using the lawyer’s services to further a crime or fraud," writes the ABA Standing Committee on Ethics and Professional Responsibility, which issued guidance in response to concerns about money laundering and counter-terrorism enforcement. Formal Opinion 491, published on April 29, instructs attorneys that "Model Rule 1.2(d) prohibits a lawyer from advising or assisting a client in a transaction or other non-litigation matter the lawyer 'knows' is criminal or fraudulent."

The opinion emphasizes that a lawyer cannot remain ignorant of a transaction, warning that it is "a lawyer’s obligation to inquire when faced with a client who may be seeking to use the lawyer’s services in a transaction to commit a crime or fraud." The ABA committee makes clear that "[f]ailure to make a reasonable inquiry is willful blindness punishable under the actual knowledge standard of the Rule."

Due diligence therefore is critical. When a potential client calls to ask, "Can you help me sell ancient art stored in an overseas freeport by setting up a U.S. import company, retaining a customs broker to handle the paperwork, creating a shell corporation to offer the objects for sale, and using the law firm's trust account to handle the financial transactions?," the lawyer's immediate response must be to ask scrutinizing questions before agreeing to represent the prospective client.

Photo credit: freeimages.com /Henk L  and Pat. Text and original photos copyrighted 2010-2020 by Cultural Heritage Lawyer Rick St. Hilaire, a blog commenting on matters of cultural property law, art law, art crime, cultural heritage policy, antiquities trafficking, looted, antiquities, stolen relics,smuggled antiquities, illicit antiquities, museum risk management, and archaeology. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are intended for informational purposes only and should not be used as legal advice applicable to the reader’s specific situation. In addition, the provision of this information to the reader in no way constitutes an attorney-client relationship. Blog url: culturalheritagelawyer.blogspot.com.

No "Seize and Send" in Prosecution Involving Mosaic Reportedly from Syria

Grand jury indictment from federal court in California claims importer falsely classified ancient archaeological artifact.

Mosaic seized by FBI and HSI from Mohamad AlCharihi.

Skilled prosecutors keep cases simple. So when U.S. Department of Justice (DoJ) attorneys secured an indictment last month in an antiquities trafficking case, they focused on one statute only, Entry of Goods Falsely Classified, 18 U.S.C. 541.

The straightforward charge, handed up by a grand jury sitting in the Central District of California, alleges that Mohamad Yassin AlCharihi (a/k/a/ Mohamad al-Sharihi), on August 13, 2015,

knowingly claimed and caused to be claimed, that he was importing a shipment of a mosaic and other items valued at $2,199, when, in fact, defendant AlCharihi knowingly imported a mosaic that itself was valued at more than $2,199, and defendant AlCharihi knowingly misrepresented the quality of the mosaic, including what the mosaic depicted.

The indictment in U.S. v. AlCharihi (20-cr-00307) simply is an allegation based on probable cause. The defendant is presumed innocent, and prosecutors bear the burden to prove the defendant's guilt beyond a reasonable doubt.

The criminal investigation began approximately five years ago when the centuries old mosaic and other objects were imported into the U.S. A bill of lading, offered by AlCharihi in court papers, documented their ocean borne transport and their classification under Harmonized Tariff Schedule of the U.S. 6908.10 and 6802.91, codes that describe ceramic mosaic tiles and worked monumental or building stone. The bill of lading characterized the imports as "GARDEN ORNAMENTAL VASE" and "MOSAIC TABLE."

Costa Rica Petitions U.S. for Archaeological Import Controls

Archaeological site at El Guayabo National Monument, Costa Rica

Cost Rica has requested a cultural heritage agreement with the United States. The Cultural Advisory Committee (CPAC) will meet on April 15, 2020 to consider this request and invites public comment.

Go to regulations.gov and type in docket DOS-2020-0011 to submit written remarks by April 1, 2020.

The public portion of the CPAC meeting--to be held on April 15 at 2:30 pm ET--will be viewable on Zoom. Attend by clicking here.

In December last year, Costa Rica made a formal request for U.S. import restrictions on at-risk archaeological material pursuant to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. The terms of the Convention on Cultural Property Implementation Act (CPIA), the federal law that implements the 1970 UNESCO Convention in the United States, now require CPAC to consider the petition and supply the State Department with advice.

Photo credit: AndSalx95 Creative Commons
Text and original photos copyrighted 2010-2020 by Cultural Heritage Lawyer Rick St. Hilaire, a blog commenting on matters of cultural property law, art law, art crime, cultural heritage policy, antiquities trafficking, looted, antiquities, stolen relics,smuggled antiquities, illicit antiquities, museum risk management, and archaeology. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are intended for informational purposes only and should not be used as legal advice applicable to the reader’s specific situation. In addition, the provision of this information to the reader in no way constitutes an attorney-client relationship. Blog url: https://culturalheritagelawyer.blogspot.com.

CPAC Meets Tuesday to Consider Turkey and Tunisia Cultural Property Requests

The Cultural Property Advisory Committee (CPAC) meets this week to discuss requests by Turkey and Tunisia for Memoranda of Understanding (MoU) with the United States to establish American import controls covering certain archaeological and ethnological materials in jeopardy of pillage.

The public portion of the meeting will be held Tuesday, January 21 at 1:30 pm ET. You can observe it live by watching online at https://eca-state.zoom.us/j/909159562.

The requests submitted by the Government of the Republic of Turkey and the Government of Tunisia invoke Article 9 of the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. The U.S. is a party to this agreement, which is implemented under federal law by the Convention on Cultural Property Implementation Act.

The country requests have attracted nearly 100 written public comments, which describe the extent of archaeological site looting in the two countries, articulate collector and dealer concerns that ancient coins will be counted as archaeological material subject to U.S. import controls, and ask the question of who owns cultural property.

CPAC, meanwhile, welcomes recently appointed chairman Attorney Stefan Passantino and new members Attorney Anthony Wisniewski and CHL author Attorney Rick St. Hilaire to the committee.

Text and original photos copyrighted 2010-2020 by Cultural Heritage Lawyer Rick St. Hilaire, a blog commenting on matters of cultural property law, art law, art crime, cultural heritage policy, antiquities trafficking, looted, antiquities, stolen relics, smuggled antiquities, illicit antiquities, museum risk management, and archaeology. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are intended for informational purposes only and should not be used as legal advice applicable to the reader’s specific situation. In addition, the provision of this information to the reader in no way constitutes an attorney-client relationship. Blog url: https://culturalheritagelawyer.blogspot.com.

Antiquities Trafficking Indictment Unsealed: Latchford Prosecution Raises Legal Issues

Newly unsealed antiquities trafficking charges detail an alleged Cambodian smuggling network.

CPIA enforcement, the "CPIA Embargo," and statute of limitations are some of the legal issues presented by the grand jury indictment.

A federal grand jury in Manhattan has handed up a 26 page indictment detailing an alleged cultural heritage trafficking network that stretched from Cambodia to America's antiquities market. Grand jurors charged Douglas Latchford, a preeminent collector and dealer of Cambodian artifacts, with five counts, including(1) wire fraud conspiracy; (2) conspiracy to commit smuggling, entry of goods by false statement, interstate transportation of stolen property, sale and receipt of stolen property; (3) wire fraud; (4) smuggling; and (5) entry of goods by means of false statements.

An indictment simply is notice of a criminal charge. A defendant is presumed innocent unless proven guilty by prosecutors beyond a reasonable doubt.

U.S. Attorney Geoffrey Berman brought
the indictment against Douglas Latchford.

Both the indictment and arrest warrant issued against the 88 year old Latchford, also known as Pakpong Kriangsak, were unsealed by magistrate judge Robert Lehrburger of the Southern District of New York (SDNY) following a November 26 request by prosecutors. The grand jury charged the defendant on October 17.

Usually prosecutors ask the court's permission to seal an indictment pursuant to FRCP 6(e)(4) so that a fugitive is not tipped off. The indictment ordinarily becomes unsealed after the defendant's arrest. But a press release issued by U.S. Attorney Geoffrey Berman's office last week confirms that Latchford "remains at large, residing in Thailand." The United States has a treaty of extradition with that nation.

The unsealing of the indictment and the simultaneous release of the news bulletin last week likely were meant to help expedite the defendant's arrest; to alert dealers, collectors, and other art market participants of the charges; and/or to stave off a possible speedy trial or due process challenge by Latchford if he is apprehended at a later date. That is because the government must avoid unreasonable delay when trying to locate a fugitive. Importantly, a defendant who does not know that he has been indicted and is captured several years after being charged might successfully argue that he has been denied the right to a speedy trial as was the case in Doggett v. United States, 505 U.S. 647 (1992). So publicizing the indictment helps the prosecution.

The unsealed indictment alleges that Latchford "engaged in a scheme to sell looted Cambodian antiquities on the international art market, including to dealers and buyers in the United States." It goes on to explain:

As part of that scheme, in order to conceal that LATCHFORD'S antiquities were the product of looting, unauthorized excavation, and illicit smuggling, and to encourage sales and increase the value of his merchandise, LATCHFORD created and caused the creation of false provenance for the antiquities he was selling. ... As part of the scheme, LATCHFORD also falsified invoices and related shipping documents to facilitate the international shipment of the antiquities to dealers and buyers ....

Count one specifically accuses Latchford of conspiracy to commit wire fraud, contending that from 2000-2012 he "engaged in a scheme to sell looted Cambodian antiquities by creating and causing others to create, and transmitting by means of international and interstate wire, false provenance, invoice, and shipping documents that concealed and misrepresented the source, country of origin, prior owner(s), age, and/or attribution of such antiquities." The defendant is alleged to have committed these acts, which earned payments transmitted via wire, "in order to induce the sale and transport of such antiquities to buyers in the United States and elsewhere, and to obtain the proceeds of such sales...."

At the Crossroads of Cultural Heritage Preservation: SCOTUS Rules on the Peace Cross and the Establishment Clause

The Bladensburg Peace Cross

The Supreme Court of the United States has ruled that an historic, cross-shaped monument may be preserved on public land because it does not violate the Constitution's Establishment Clause.

Cultural property watchers may not have noticed the case of American Legion et al. v. American Humanist Assn. et al. that the United States Supreme Court decided last month and which preserved the display of a cross-shaped war memorial on public property. That’s because the case received greatest attention from religious liberty practitioners and constitutional lawyers monitoring the fate of the controversial Lemon test, which the high court first articulated in 1971 in its landmark decision of Lemon v. Kurtzman—a judicial test that assesses whether there is improper government endorsement or hindrance of religion.

The American Legion case should interest heritage preservationists, nevertheless, because it tackles the recurring question of how public governments are to maintain historic monuments that contain religious symbolism.

Already the outcome of the supreme court's ruling in the American Legion case has prompted the nation's highest court to ask the Eleventh Circuit Court of Appeals to revisit the matter of City of Pensacola, Florida v. Kondrat’yev so that it can reassess whether Pensacola can keep an historic World War II era cross monument erected in a public park.

The American Legion case focused on the intersection between the preservation of a World War I memorial and the terms of the U.S. Constitution’s Establishment Clause. In a 7-2 decision, the supreme court voted to keep the Bladensburg Peace Cross standing, writing, “As our society becomes more and more religiously diverse, a community may preserve such monuments, symbols, and practices for the sake of their historical significance or their place in a common cultural heritage.” “The passage of time gives rise to a strong presumption of constitutionality.”

El Salvador Seeks U.S. Renewal of Cultural Property MoU

El Salvador has petitioned the United States for a Memorandum of Understanding to renew cultural property import controls that preserve archaeological objects from looting and smuggling.

This Maya effigy vessel is one example of the type
of endangered cultural objects looted from El Salvador.

El Salvador is home to archaeological sites that tell us the histories of peoples like the Maya, Nahua and Lencas. To protect this cultural heritage, the government of El Salvador is asking the United States for a Memorandum of Understanding (MoU) to reimpose restrictions on imports of endangered artifacts, first put in place in 1995 and renewed every five years thereafter.

The bilateral agreement of 2015 between the U.S. and El Salvador maintained U.S. import restrictions on specified objects from 8000 B.C. through 1550 A.D. and that are identified on the Designated List. They include figurines, ceramic vessels, incense burners, metal objects, and more cultural artifacts.

El Salvador seeks a continuation of these import protections to protect archaeological material in jeopardy of looting by invoking Article 9 of the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property and companion implementing legislation in the U.S., the Convention on Cultural Property Implementation Act (CPIA).

A public hearing on El Salvador's request will be held by the Cultural Property Advisory Committee (CPAC) on July 23, 2019, at 1:30 p.m. EDT. Go on this State Department link to learn how to attend the meeting online.

Photo courtesy of the Secretaría de Cultura de la Presidencia and the U.S. State Department. Text and original photos copyrighted 2010-2019 by Cultural Heritage Lawyer Rick St. Hilaire, a blog commenting on matters of cultural property law, art law, art crime, cultural heritage policy, antiquities trafficking, looted, antiquities, stolen relics, smuggled antiquities, illicit antiquities, museum risk management, and archaeology. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are intended for informational purposes only and should not be used as legal advice applicable to the reader’s specific situation. In addition, the provision of this information to the reader in no way constitutes an attorney-client relationship. Blog url: https://culturalheritagelawyer.blogspot.com.

CPAC Considers Import Restrictions on Cultural Property from Chile and Jordan

The pre-Colombian archaeological site of
Pukará de Quitor in northern Chile.

The governments of Chile and Jordan have petitioned the United States for import controls on at-risk archaeological material.

The Cultural Property Advisory Committee will meet in April to consider import protections covering archaeological objects from Chile and Jordan that are in jeopardy of looting.

Chile is the fourth South American nation to seek a Memorandum of Understanding (MoU) that erects U.S. import controls to stem the trafficking of cultural heritage objects. The United States currently has similar bilateral agreements with Bolivia, Colombia, and Peru.

Jordan, meanwhile, is the third MENA country to seek an MoU with the U.S, as it seeks to join the ranks of Egypt and Libya.

On February 4, Chile invoked Article 9 of the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property, asking the United States for import restrictions under the Convention on Cultural Property Implementation Act (CPIA), which is the federal statute that implements the 1970 UNESCO Convention in the U.S.

The Jordanian government submitted a similar request last year on November 26.

The Met's Surrender of a Gilded Egyptian Coffin Presents a Golden Opportunity to Deter Antiquities Looting

The Metropolitan Museum of Art can fight back against antiquities trafficking by hiring a provenance curator and by fully disclosing the chain of custody of collection objects.

Nedjemankh's coffin, surrendered by
the Metropolitan Museum of Art last week.

The Metropolitan Museum of Art in New York has surrendered a celebrated artifact from its collection. The Met announced on Friday that "it has delivered the gilded Coffin of Nedjemankh, for return to the Government of Egypt by the Manhattan District Attorney’s Office, after having learned the Coffin was looted from Egypt in 2011."

The spectacular, human-shaped coffin, dating from the first century B.C. and glittering in gold, anchored the popular Nedjemankh and His Gilded Coffin exhibition, which began in July 2018 and was scheduled to close in April 2019. With the handover of the coffin, the show abruptly came to an end.

Max Hollein, who has not yet completed his first full year on the job as the The Met's new director, now faces a multi-million dollar loss that is likely not covered by insurance and reputational harm to his institution, as well as intense scrutiny of the museum's Collections Management Policy that is supposed to "ensure[] that ... its collections are protected ...."

The district attorney's investigation hopefully leads to the arrest and prosecution of those responsible for trafficking the looted archaeological object and for lying about its provenance. Meanwhile, the museum's loss presents a golden opportunity for one of the world's leading cultural institutions to fulfill Hollein's promise last week to mitigate similar risks in the future and, in the words of Met CEO Daniel Weiss, "to deter future offenses against cultural property."

In 2017, CHL wrote that institutions lacking solid protective measures to guard against acquiring illicit artifacts would face acute legal and reputational risks. CHL asked at that time whether museums effectively shield their collections from legal confiscation, posing the question soon after The Met lost a looted ancient vase to a seizure by search warrant. See Museum Loss Prevention: Apply Rigorous Due Diligence.

Now, in the wake of the relinquishment of the golden coffin, The Met's director announced, “Our museum must be a leader among our peers in the respect for cultural property and in the rigor and transparency of the policy and practices that we follow," adding, "We will learn from this event—specifically I will be leading a review of our acquisitions program—to understand what more can be done to prevent such events in the future."

One way to help reduce the risk of loss is to hire a provenance curator like the one Museum of Fine Arts in Boston has, a professional whose job is to investigate the collecting histories of archaeological artifacts, paintings, and other cultural objects. That person should be full-time and have the experience to navigate the complex art and antiquities trade, which can be tempting to the black market. It is a marketplace that "faces a higher risk of exposure to dubious trade practices ... due to the volume of illegal or legally questionable transactions," as the Basel Art Trade Guidelines accurately points out.

The museum, moreover, should revive its commitment to transparency of provenance information, championed recently by Hollein in The Met's Role in Protecting Cultural Heritage (November 2018) where he writes: "Transparency: ... Our goal is to publish the provenance (or known history of ownership) for all works as part of their entries in our online collection." Provenance should not be limited to "known history of ownership," of course, but must include the fullest description of an object's chain of custody.

Jordan Seeks U.S. Import Restrictions to Protect Archaeological Heritage

Petra in southern Jordan is one of the world's
most famous archaeological sites

The State Department has published notice of Jordan's request for cultural property import controls.

Jordan is home to some of the world's most treasured archaeological sites, including Petra, the baptismal site of Jesus at Bethany, and the castle at Quseir Amrahas. To protect its cultural heritage, Jordan now is asking the United States to place restrictions on imports of its endangered artifacts.

The Federal Register reports that Jordanian authorities petitioned the U.S. government for import controls to protect archaeological material in jeopardy of looting, invoking Article 9 of the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property and its companion implementing legislation in the U.S., the Convention on Cultural Property Implementation Act (CPIA).

The State Department received Jordan's petition on November 26, 2018, but the agency only published notice on January 31, 2019.

Jordan is the latest MENA country (Middle East/North Africa) to seek a Memorandum of Understanding (MoU) from the U.S. that would safeguard antiquities put at risk by looters and smugglers.

"No invoices? Cool." Art, Artifacts, and Money Laundering

A look at cases involving art, artifacts, and money laundering helps explain why art and antiquities dealers should be included in anti-money laundering laws.

Money laundering transforms criminals' ill-gotten gains into usable cash or commodities. It also mitigates the risk and anxiety of getting caught. "You don't have to worry about it," an art gallery owner and money launderer confidently assured a potential client, who really was an undercover police officer.

Pretending to be a narcotics trafficker who needed to launder dirty cash, the undercover agent asked the gallery operator if the artworks she wanted to buy could be "in somebody else's name to where if [the undercover] were to ever have to sell it, that [other] person can sell it." The gallery owner explained, "We can do it any way, any way you want." "It doesn't have to be, it doesn't have to be in anybody's name," he said, "It can be in anyone's name you want."

The prosecution of the gallery owner is among the sample of court cases described below that offer a window into the world of art, artifacts, and money laundering.

Why is knowing about money laundering in the sale of art and antiquities important?

Industries that deal with high cash value transactions are the first lines of defense against money laundering. Banks, life insurers, casinos, precious metal dealers, automobile sellers, travel agencies, and other sectors are best positioned to become aware of unusual financial transactions early. That's the reason why the Bank Secrecy Act (BSA) directs certain of these businesses to file Suspicious Activity Reports (SARs) with the U.S. Treasury's Financial Crimes Enforcement Network (FinCen) and requires designated sectors to maintain risk-based anti-money laundering (AML) programs.

Art and antiquities dealers do not fall under the BSA's directives, yet they are susceptible to money laundering. Like other trades and businesses, they are required to file Form 8300 when they receive more than $10,000 in cash, cashier's checks, bank drafts, traveler's checks, or money orders either from a single or several related transactions. But they are not part of the BSA's reporting, recordkeeping, and anti-money laundering program requirements even though they sometimes receive large amounts of cash for high value goods.

In its National Money Laundering and Terrorist Financing Risk Assessment (2013) report, the Financial Action Task Force (FATF) expressly called attention to the illegal trading of antiquities as a predicate crime of money laundering. FATF, in fact, specifically flagged art and antique dealers as a commercial sector that must "build[] a list of the [money laundering/terrorist financing] vulnerabilities that can be exploited." They additionally need to assess "the adequacy of their [anti-money laundering/counter-financing of terrorism] controls."

Both FATF's report and the Basel Art Trade Guidelines' (2012) conclusion that "the art market faces a higher risk of exposure to dubious trade practices" is why CHL in 2014 called for taking a fresh look at federal AML laws and why CHL later listed such improvements as one of the top six law enforcement recommendations to combat transnational cultural heritage trafficking.

Congress made initial progress on this topic last year when Rep. Luke Messer (R-IN-6) introduced the Illicit Art and Antiquities Trafficking Prevention Act (H.R. 5886) in the U.S. House of Representatives. The bill sought the addition of "dealers in art or antiquities" to the BSA. Although the legislation sat idle in 2018, it could be presented to lawmakers again in 2019. In the meantime, the nonprofit Antiquities Coalition has started to focus vital attention to the AML issue.

2018 In Review

Happy New Year! CHL looks forward to beginning its tenth year of blogging.

Thank you readers and subscribers for taking an interest in the issues surrounding cultural property law and heritage preservation policy.

As we begin 2019, let's look back at the five most popular posts from 2018.



1. [VIDEO] "Moxie" Sniffs Out the Scent of Antiquities

2. Rubin v. Iran: Supreme Court Says Persepolis Collection Will Stay at the Oriental Institute

3. How to Secure an Archaeological Site: ASIS Releases New Case Study on Clunia

4. Proposed Bill Enlists Art & Antiquities Dealers in the Fight Against Money Laundering

5. AUSA Calls Baltimore Test Case "A Numismatic Fantasy"

Photo credit: Svilen Miley/freeimages.com
Text and original photos copyrighted 2010-2019 by Cultural Heritage Lawyer Rick St. Hilaire, a blog commenting on matters of cultural property law, art law, art crime, cultural heritage policy, antiquities trafficking, looted, antiquities, smuggled antiquities, illicit antiquities, museum risk management, and archaeology. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are intended for informational purposes only and should not be used as legal advice applicable to the reader’s specific situation. In addition, the provision of this information to the reader in no way constitutes an attorney-client relationship. Blog url: http://culturalheritagelawyer.blogspot.com.

Court Dismisses Dinosaur Forfeiture Case

Missed statute of limitations deadline prompts government to lose cultural property forfeiture case filed in Texas.

The fossilized Tyrannosaurus bataar skull.

A missed deadline has caused federal prosecutors to lose their court case to confiscate a dinosaur skull allegedly pilfered from Mongolia. "[T]he Court finds that the Government’s request for a final order of forfeiture for the Defendant Bataar Skull should be and is hereby DENIED," wrote U.S. District Judge Reed O'Connor in a decision rendered last week. The dismissal in the case of U.S. v. One Fossilized Tyrannosaurus Bataar Skull (17-cv-00106-O) is the second time that the court has quashed the government's forfeiture action.

Expanded Counter Terrorism Network Could Help Antiquities Trafficking Prosecutions

Prosecutors' Counter Terrorism Network could leverage criminal cases against cultural heritage traffickers.

A new project launched this week by the International Association of Prosecutors (IAP) aims to build better connections between counter-terrorism (CT) prosecutors.

The initiative should be welcome news to those few prosecutors worldwide who monitor antiquities trafficking and its links to organized crime, smuggling rings, and terror groups.

Illicit Financial Flows and Cultural Heritage Trafficking

Cultural heritage trafficking and illicit financial flows should be probed by law enforcement.

Cultural heritage trafficking is a serious crime. Like most serious crimes, heritage trafficking is associated with other crimes such as lying on customs forms, falsifying invoices, wire fraud, money laundering, and even genocide.

Now the World Customs Organization has published a report on illicit financial flows (IFFs). Although the report--titled Illicit Financial Flows via Trade Mis-invoicing Study Report 2018--is silent on the topic of IFF's relationship to cultural heritage trafficking, its observations and analyses apply, which is why the association between heritage trafficking and illicit financial flows should be probed by law enforcement authorities.

Baltimore Test Case: Fourth Circuit Rejects Ancient Coin Collectors' Claims

Fourth Circuit Court of Appeals

The United States Court of Appeals for the Fourth Circuit has issued a unanimous decision rejecting the Ancient Coin Collectors Guild's (ACCG) effort to strike down U.S. import controls that protect ancient coins from transnational looting and trafficking.

"Having already received two hearty bites at the proverbial apple, .... we are satisfied to reject each of the Guild’s contentions on appeal," wrote the appellate court in the case of U.S. v. Three Knife-Shaped Coins; 7 Cypriot Coins; 5 Other Chinese Coins.

Preemptive Rulings Sought in Moon Dust and Bronze Horse Cases

Note reportedly written by Neil Armstrong.
Source: court papers filed in Cicco v. NASA

“To Laura Ann Murray – Best of Luck – Neil Armstrong Apollo 11.” This message accompanied a vial of moon dust that Laura Cicco (neé Murray) received from her mother when she was about ten years old. The first man to set foot on the moon scribbled the note on the back of a business card carried by Cicco's father, who was friends with Armstrong.

These are some of the claims Cicco makes in a declaratory judgment (DJ) pleading her lawyer filed in Kansas federal court on June 6.