Monday, November 8, 2021

Money Laundering and Antiquities Dealers

Antiquities sellers soon will be covered by the Bank Secrecy Act.

FinCen recently completed an advance public comment period over anticipated enforcement rules, sparking debate among heritage advocates, cultural property groups, archaeologists, dealers, auction houses, and museum directors.


The Anti-Money Laundering Act of 2020 (AML Act) is a hot topic in the cultural property world as the US Treasury Department’s Financial Crimes Enforcement Network (FinCen) prepares rules to enforce the new statute.

Heritage groups, cultural property advocates, archaeologists, museums, antiquities dealers, and auction houses clashed on issues ranging from the nature of the antiquities trade, whether the trade actually is involved with money laundering and terrorist financing (ML/TF), the need for confidentiality, who or what should be subject to new reporting requirements, and much more as they submitted written public comments.

The AML Act took effect when
Section 6110 of the massive National Defense Authorization Act became law in January. This section requires Suspicious Activity Reports (SARs) from 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.”

“This action is an important step in strengthening U.S. national security by protecting the U.S. financial system from money launderers and terrorist financiers that seek to exploit the antiquities trade,” FinCen announced in a September 
news release.

The law brings antiquities dealers under the umbrella of the Bank Secrecy Act’s (BSA) anti-money laundering/countering financing of terrorism (AML/CFT) regime so that sellers of antiquities share the same legal duties already undertaken by jewelry and precious metals dealers. pawnbrokers, real estate closing professionals, casinos, vehicles salespersons, travel agents, and other high-value business participants. The BSA enlists these sectors and other financial institutions to root out marketplace abuse by 
undertaking customer due diligence and spotting questionable financial transactions. Suspicious reports are forwarded to law enforcement.

Because federal regulations must be adopted to implement the AML Act, FinCen issued an 
advance notice of proposed rulemaking in September and completed its public comment period on October 25, which garnered approximately three dozen thought-provoking submissions from opposing stakeholders.


Overview

One set of commenters identified ML/TF and illicit trade among the illegal activities that lurk beneath the antiquities market, which is why, they argued, the AML Act is needed. But several antiquities market participants claimed that ML/TF risks are non-existent, or at least not as bad as made out to be. They questioned the evidence that justified a burdensome new law, as they described it. Proponents of the AML Act further contended that secrecy—a staple of the antiquities market—inevitably attracts criminals, while antiquities sellers maintained that confidentiality constitutes an essential feature of the trade. Differences surfaced over additional cultural property questions, including:

  • Should FinCen’s regulations be broad or narrow?
  • Should the rules make a distinction about the kinds of objects that should be covered? Such as by age or by date? Or by dollar value of the transaction? Should ethnological objects be counted as antiquities? What about coins?
  • Should the rules apply to commercial transactions only, or should they embrace non-commercial transfers as well?
  • What about including museums and archaeologists in the BSA’s enforcement regime?
  • What about online sales platforms?


Risks in the Antiquities Trade

Cultural heritage protection advocates, archaeologists, and AML consultants generally described the antiquities trade as ripe ground for criminal infiltration. 
“Because of the lack of oversight, the antiquities sector provides a target rich environment for illicit actors,” wrote The Antiquities Coalition and its associated Financial Crimes Task Force (ACFCTF), emphasizing that the “risks of money laundering and terror finance, avoidance of sanctions, and other illicit financial crimes are very high with antiquities ….” The Antiquities Coalition also expressed concern over “built-in anonymity and masking of beneficial ownership, ineffective protection of artifacts at archeological sites in high-risk countries, counterfeits and forgeries, fraudulent provenance and use of social media in suspect transactions.” Global Financial Integrity estimated revenues from the cultural property market to be worth approximately $1.2 billion to $1.6 billion annually, the Antiquities Coalition reported, and “this market operates with a business model inherent with risk, including the ability to acquire and sell products with little to no proof of ownership, the use of anonymity in sales and auctions, and, of course, the ability to transact businesses in cash.”

The
U.S. Committee of the Blue Shield (USCBS)—joined by the Archaeological Institute of America, the American Anthropological Association, and the American Society of Overseas Research—raised the “question of possible financing of terrorism,” warning that “[f]reshly looted archaeological artifacts … are particularly suited as a means of transferring funds internationally.” The USCBS explained that “[a]ntiquities are easily moved through different jurisdictions or maintained in freeport zones and other locations that make it difficult to trace the origins of a particular object.” “This problem,” the group highlighted, “is further exacerbated by the proliferation … of false or forged provenance documentation.” The USCBS pressed that dealers and auction houses also “engage in a variety of ‘creative’ financing schemes,” which the group conceded “may not be illegal,” but which illustrated how “art merchants are increasingly acting more like financial institutions in lending money, securitizing loans, and monetizing works of art.” The USCBS, furthermore, brought attention to UN Security Council Resolution 2347 that “noted the connections between looting, theft, and smuggling of antiquities and other art works and the funding of terrorism.”

Two United Kingdom-based AML compliance firms warned about latent potential illegalities that are concealed within the antiquities market.
ArtAML advised that “there is a general lack of awareness of possible suspicious activity,” and that “with the exception of large auction houses that have voluntarily introduced compliance measures, the vast majority of industry players will not introduce such compliance measures until legally required to do so.” Corinth Consulting, moreover, named specific risks in the antiquities marketplace “such as theft, authenticity, provenance and illegal export from countries with national patrimony laws.” The firm assessed that the “illegal excavation and export risks seem more likely to occur in countries suffering from war, dictatorship or extreme poverty” and that “these factors may in turn increase the risk of terrorist financing.” For that reason, attention should be placed on the seller “and the need to ‘follow the object’” as opposed to “the typical ‘follow the money’ focus on buyers.”


Questioning Money Laundering and Terrorist Financing

Several advocacy and trade groups representing sellers and collectors predominantly rejected the risk-laden picture of the antiquities trade, and they criticized the AML Act and its forthcoming rules. The
Committee for Cultural Policy (CCP) called the regulations “inappropriate due to the lack of hard evidence for money-laundering activities by antiquities businesses in the United States.” The American Council for the Preservation of Cultural Property (ACPCP) objected that the AML Act became law “without there ever having been a single documented criminal case in the United States or Europe of antiquities being used as an asset with which to launder ill-gotten funds.” The Authentic Tribal Art Dealers Association (ATADA) derided “the false claims of involvement of the U.S. antiquities trade in general in money laundering or activities supporting terrorism.” Likewise, ConfédérationInternationale des Négociants en Œuvres d’Art (CINOA) expressed the view that “the scope of ‘illicit activity’ involving antiquities has been highly exaggerated by advocates of implementing such controls.” 

GlobalHeritage Alliance (GHA) protested that “FinCEN should focus on promulgating regulations solely designed to counter serious money laundering issues, and not be influenced by those with an axe to grind against the antiquities trade to issue overly complicated and draconian rules that can be exploited to repatriate artifacts in questionable cases.” The GHA specifically reproached the Manhattan District Attorney’s office for allegedly “misus[ing] investigative subpoenas for fishing expeditions directed against prominent New York City collectors.” The cultural property trade advocacy group portended that “there is a real danger information originally gathered to fight terrorism will instead be used to harass collectors and dealers in the hopes of forcing repatriations of objects to authoritarian countries ….”

Major auction houses, meanwhile, advised FinCen that the majority of their sales are not even cash-based, with
Christie’s explaining that “[c]ash transactions … in New York are rare” and that “the vast majority of auction house transactions are settled by bank wire transfer or credit/debit card.” Bonhams and Butterfields Auctioneers additionally called attention to the fact that “the revenue of entities in the art market is tiny when compared to that of the financial institutions.” Although Christie’s affirmed “that there can be money laundering and terrorist financing risk in the trade of antiquities,” it offered that “the vast majority of sales in antiquities are made for legitimate purposes.” In this vein, the ACPCP implored that transactions using “credit card, check, or bank transfer through an AML compliant financial institution must be exempt from further data collection and reporting.”


Secrecy in the antiquities market
Secrecy

The USCBS and its allies spotlighted opacity as a “key characteristic of the art market,” underscoring that there is “no requirement within the United States for an art merchant to maintain records of transactions or of the buyers, sellers, or consignors.” “[T]hat very secrecy,” USCBS argued, “is the reason why Know-Your-Customer (KYC) and Suspicious Activity Report (SAR) requirements are so necessary.” Notably, the group professed that “the antiquities market in the United States has indulged in even greater efforts to maintain secrecy of sales and those involved in transactions” as a result of “U.S. law enforcement efforts to interdict the illegal aspects of the antiquities market …, particularly … due to the activities of the New York District Attorney’s Office.” ArtAML observed, “While this [secrecy] can be for good reason such as collectors not wanting it to be known that they hold expensive items in a personal collection (potentially attracting robbery), this culture can open opportunities to criminals who wish to not be detected.”

The art market has been characterised by some as ‘opaque’ creating ML/TF risk,” Bonhams otherwise contended. “This is to overlook the reality that a seller’s identity will always be known to the parties needing to know it.” The auctioneer, therefore suggested, “Provided the intermediary – the auction house – knows the identity of both parties and can perform due diligence on those parties, it would not seem to us to be necessary to make further disclosure
.”

Christie’s concurred, insisting, “Where an intermediary, such as an auction house, is involved, there is no business reason for buyers and sellers to have the right to know each other’s identity.” Christie’s pointed out, “Both buyers and sellers expect confidentiality and rely on an auction house’s discretion.” That is because there are “justifiable reasons of personal safety and security of the property. In addition, sales of objects may be necessitated by circumstances, some very sensitive, such as financial difficulties, family disputes, or divorce.” Christie’s added that their auction house and others “conduct reasonable due diligence on the property for sale and the parties to the transaction” and that “[p]rovenance appears in public sales catalogues, which are published on auction house websites and include information about an item’s country of origin and the date on which it left that country.” The ACFCTF, nevertheless, expressed a concern about fraudulent provenance circulating in the antiquities trade.

"[I]f it is to be made a legal requirement to identify principals in any transaction involving antiquities in the US,” Bonhams suggested “that it should only be necessary for one person in the transaction to carry out due diligence to establish agents/principals to ensure there are no ML/TF risks” in order to avoid an “unduly burdensome” situation “with no reliance allowed between entirely reputable entities.” Bonhams further advised that “[i]t would be much less burdensome if governments could set up and manage a mandatory register of beneficial ownership of all entities that carry on business in their jurisdiction.” And Christie’s, in a footnote, pushed for the opening of the Becchina and Medici archives to “strengthen the ability of legitimate market players to complete their diligence process.”


Who and What Should be Covered

FinCen regulations should be sweeping, according to stakeholders like the
Clooney Foundation for Justice. They “must be broad and stringent” in order to “provide law enforcement with information on illicit financial flows to further dismantle criminal networks currently exploiting the antiquities market.” That means the regulations must have “no monetary thresholds, stringent due diligence requirements, disclosure of beneficial ownership information, and comprehensive SARs filings,” asserted the human rights organization led by George and Amal Clooney.

In fact, attested the Antiquities Coalition, “[u]nless and until the U.S. public and private sectors close the loopholes … they will leave wide open the world’s biggest economy to money launderers, artifact traffickers, drug smugglers, kleptocrats, oligarchs, terrorists, and the many other criminals proven to have exploited the art and antiquities market’s weaknesses.”

But Bonhams retorted that “[i]f a balance is not achieved, any regulation will militate against the art market as a whole … rather than focussing on identifying any potentially suspicious transactions.”

Both Sotheby’s and the Antiquities Coalition agreed with the idea of globally harmonized rules, but for different reasons. Sotheby’s called for AML/CFT regulations to be “proportionate” and “risk based” so as “to preserve the US share of the art market,” which it called “considerable.” For the American antiquities market to remain competitive, Sotheby’s said that “it will be important that AML measures mandated in the US are similar to those imposed in jurisdictions outside the US.” The Antiquities Coalition concurred that, “[a]t a minimum, FinCEN should mirror the regulations in other major market countries.” However, the Antiquities Coalition stated that the rationale should be “to ensure that incommensurate regulations don’t present loopholes for bad actors to take advantage of the U.S. financial system.”

ArtAML recommended rules “a) simple enough for the market to understand; b) clear enough for enforcement officials to understand; and c) flexible enough to allow for changes needed as implementation challenges arise.”

Monetary thresholds

Given that market participants generally seek the narrowest application of FinCen rules, and given that overseas AML/CFT rules already establish monetary thresholds, several commenters argued for the adoption of a minimum dollar value that would serve as a predicate before the BSA’s requirements would kick in.

Primarily smaller sellers urged the highest thresholds—in the millions.
Marcy Schillay, a dealer in Native American art and artifacts, pleaded, “It would be a tremendous burden for me to have to report according to requirements by AML laws … that I would probably be forced to retire. I urge you to omit ‘antiquities dealers’ from the Bank Secrecy act for sales below $5 million.” Don Siegel, another dealer, agreed, as did the Director of Native American Art at Hindman/Cowan's Auctions. In a similar vein, Tegan Johnson urged a” $2 million annual [minimum] to protect the majority of smaller businesses from unnecessary investigation.” Additionally, the ACPCP urged that the “threshold for individual sales to new clients should not be less than $1,000,000, and “[t]he threshold for annual sales for a gallery specializing in ancient art must be over $3,000,000.”

CINOA, nonetheless, advocated “for concentration on only ‘high-value’ transactions and higher-risk ‘conflict zone’ associated antiquities,” suggesting a $500,000 threshold so that “micro-businesses will not be overburdened … and any risk associated with high value antiquities transactions would be addressed (especially in conjunction with existing reporting required by a third-party facilitator, such as banks or insurers).”

Seeking either a 10,000 USD or Euro threshold were auction houses and the USCBS et al. 
Both Christie’s and Sotheby’s agreed to a minimum transaction amount and suggested €10,000, roughly equal to the minimums used by the AML/CFT regulations of the United Kingdom and the European Union. “We are in favour of an industry wide threshold applicable on a transaction basis,” Sotheby’s wrote, because it “ensures a level playing field among market participants,” with Christie’s reminding that “[m]arket participants will need guidance from FinCEN on how to calculate the transaction threshold (e.g., whether it includes sales tax and commissions).” HindmanAuctions urged a $10,000 individual transaction threshold too, but “with an annual transaction threshold for sellers of $100,000.” And despite the fact that the USCBS and its allies “oppose the incorporation of any monetary threshold for the definition of what is an antiquity,” there was agreement that “the [FinCen] regulations should apply to transactions that are valued at more than $10,000 per transaction ….”

Antiquities, art, and archaeology

Even if a baseline transaction amount were to be selected by FinCen, which antiquities would be covered? Once again, the Antiquities Coalition advanced a broad, anti-crime approach. “We strongly believe that separately defining and regulating ‘art’ and ‘antiquities’ creates more problems than it solves,” pressed the organization. “As such, we have suggested that FinCEN consider regulating both art and antiquities as ‘cultural property,’” which would be categorized as “covered goods” under the BSA.

The USCBS also wished to cast a wide net over antiquities, but it applied an archaeological perspective to narrow the definition to “all objects that are at least one hundred years in age, that are the product of human activity, and that are of cultural, historical, art historical, archaeological, scientific, or religious significance.”

Market stakeholders echoed this archaeological approach
. The Art Dealers Association of America (ADAA) defined “antiquities” as “an object of archaeological interest,” and Hindman Auctions labeled an antiquity as “an archaeological object of ancient origin that was discovered through excavation or exploration underwater.” They are different from other works of art, the auction house said, because the “antiquity was preserved through burial on land or in the ocean.” Sotheby’s called antiquities “a category of art.”

The online seller,
1stdibs.com, stressed that antiquities should not include “more recent ‘vintage’ items or colloquial ‘antiques’ from the last century, or that are only a few hundred years old,” “natural items such as fossils or aged natural items,” or “older furniture, rugs, tapestries and furnishings for domestic or commercial furnishing [that] normally would not be considered ‘antiquities.’”

Cut-off dates

Several stakeholders suggested a cutoff date, hovering either around the beginning of the Middle Ages or approximately a millennium later.
The Holocaust Art Restitution Project (HARP) proposed, “Antiquities should be defined broadly as works of art and cultural objects made in antiquity. These works of art and objects should encompass objects of cultural significance created before the year 500 C.E., including objects that were discovered through archaeological means ….” HARP added, “Objects created before 500 C.E. that are considered to be works of art since their creation, i.e., objects that were not discovered as a result of any form of terrestrial or aquatic excavation, should also be considered antiquities for the purposes of FinCEN’s regulations.” The organization also boldly suggested that sellers "should be required to provide provenance for the object dating back to the year 1907 at minimum.”

The
CCP counseled that “an ‘antiquity’ should be defined as an artwork or artifact made for public or private use dating to before 500 A.D., the end of the Roman Empire ….” The GHA endorsed this concept but further recommended, “If FinCEN thinks a more recent date is more appropriate, 1500 AD makes sense because it roughly corresponds to the Renaissance, the Fall of Constantinople, the Discovery of the Americas, the end of Pre-Columbian civilizations, and the highpoint of Empires in China and India.”

Bonhams currently employs a more recent date for an antiquity in its business, explaining that its “traditional definition of antiquities is objects from 4000 BC to the 12th Century AD and geographically originating from Egypt, the Near East and Europe.” It confirmed that “other major auction houses are consistent in this approach,” and pointed out that “others use the term more broadly to include ancient Chinese, Tibetan, African, South-East Asian and South American….”

Ethnological objects

Mark Johnson, a Los Angeles dealer of ethnographic art, expressed concern that an even more recent cut-off date would encompass “[t]he vast majority of ethnographic art, which normally consists of non-excavated items like textiles, beadwork, basketry, costumes, and wood carving are less that 100 years old.” That is perhaps why several market participants backed specific exclusions for ethnological items.
We believe the U.S. domestic tribal and international ethnographic art trade should be specifically excluded from the definition of ‘antiquities’ and exempted from regulatory reporting requirements,” wrote the ATADA. Similarly, the owner of the MatoskaTrading Company anxiously was “concerned that I could become subject to onerous regulation should historic American Indian art become classified as an ‘antiquity.’”

Coins

Numismatic advocacy groups, at the same time, urged exemptions for coins and for coin dealers because, as the International Association of Professional Numismatists (IAPN) averred, the “antiquities and numismatic trade are distinct.” And both the IAPN and the
Ancient Coin Collectors Guild (ACCG) advanced their contention that the numismatic trade has a low AML/CFT risk.

“All coin dealers,” the ACCG further claimed, “are micro or small businesses.” Therefore, “[i]mposing expensive and time-consuming regulations … may drive many out of business …. Without proof of a serious money laundering problem in the industry, coin dealers should not be subject to regulations designed for antiquities dealers.”

The IAPN, ACCG, and others drew attention to the fact that the United Kingdom carved out a coin dealer exception from its own money laundering regulations.

FinCen rules and ancient coins

“The term [“antiquities”] should explicitly exclude coins and ethnological objects,” entreated the GHA, and the CCP likewise petitioned that an “’antiquity’ … should exclude coins manufactured for use in trade.” The GHA’s stated rationale was that coins “are traded separately from antiquities, are serviced by different trade associations, are the subject of separate academic treatment, and typically are of limited monetary value.”

The
National Federation of Independent Business (NFIB) took a step further by petitioning for a small business carve-out from the BSA’s AML/CFT reporting requirements. “America’s small businesses, and their owners and employees, should not have to yield their freedom,” NFIB scripted, “because the [Treasury] Department thinks doing so might someday and somehow contribute something of interest to the Department’s efforts against crime and terrorism.”

More carve-ins and carve-outs

The list of sought-after inclusions and exclusions abounded further as various stakeholders lobbied to add or subtract commercial and non-commercial transactions and other categories from the BSA’s mandate. Some highlights are presented:

  • USCBS et al.: “We believe that ‘trade in antiquity’ should include nonprofit as well as for-profit transactions.
  • “AAMD, on behalf of its members, urges FinCEN to exclude non-profit museums from any definition of participants engaged in the “trade in antiquities.”
  • “The ‘trade of antiquities’ should relate to commercial activity as opposed to charitable donations to museums and other institutions. GHA does not believe non-commercial, not-for-profit activity should be targeted. However, to the extent it is covered, it should include activities of US archaeologists excavating in countries with high risks of corruption, money laundering and terrorist activities.”
  • The ADAA “respectfully requests that FinCEN recognize the clear intent of Congress to narrowly cabin the scope of the BSA amendments to only capture dealers in antiquities and not dealers in art.”
  • ACPCP: “Members in good standing of the top dealer’s organizations should be exempt (CINOA, IADAA, AADLA) as they are already required to observe strict business practices that preclude suspicious transactions.”
  • Therefore, CCP recommends that if regulations are imposed on antiquities dealers that [] the definition of an “antiquities dealer” should be limited to businesses that actually purchase and sell art and artifacts….”
  • 1stdibs.com, Inc.: “Thus, any definition of ‘trade in antiquities’ should be careful to exclude online marketplaces that are neither the buyer nor seller of goods. This is particularly important for marketplaces that support a broad range of items and are not specialized in or limited to antiquities.”
  • Christie’s: “SARs should be encouraged but not mandatory, similar to the requirements for precious metals dealers.”


Next Steps

Regular readers of CHL will recall that this blog has been calling for a law like the AML Act in posts since 2014. Now that the statute has been enacted, final rules must be adopted. The AML Act requires the US Treasury Secretary to issue proposed rules by the end of December, and it is expected that FinCen will publish a notice of proposed rulemaking in the coming weeks. That will prompt another comment period before Treasury issues a final rule.

Meanwhile, similar BSA AML/CFT requirements for art dealers, advisors, consultants, and others engaged in the art trade will have to wait. That’s because Congress asked "Treasury and its law enforcement partners [to] further study the risks posed by the facilitation of money laundering through the trade in art."

Stay tuned.



Text and original photos copyrighted 2010-2021 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.

Saturday, January 23, 2021

One Small Step Act

Cultural property on the Moon at Apollo and other sites of space exploration are to be protected by the "One Small Step Act."


Historical artifacts on the moon have rocketed into focus with the passage of the One Small Step to Protect Human Heritage in Space Act.

Introduced in Congress by Sen. Gary Peters (D-MI) in May 2019 and enacted into law last month by President Donald Trump, the newly adopted statute aims to preserve cultural property located on the lunar surface. The law requires NASA to include heritage preservation measures in vendor, grantee, and partnership agreements that relate to lunar activities.

The One Small Step Act points to specific safeguards published in NASA’s Recommendations to Space-Faring Entities: How to Protect and Preserve the Historic and Scientific Value of U.S. Government Lunar Artifacts. These recommendations aim to protect objects located at the Apollo, Surveyor, Ranger, and other landing sites and to preserve astronaut bootprints and lunar rover tracks.

Text and original photos copyrighted 2010-2021 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.

Wednesday, January 20, 2021

Thailand lintels part of the cultural property forfeiture case in California.
Lintels 1 and 2 from the Asian Art Museum.
Photo: US Attorney Northern District of California.

Lintels allegedly taken unlawfully from Thailand and given to the Asian Art Museum in California are the subject of a federal forfeiture complaint that seeks repatriation of the cultural property.


The United States Attorney for the Northern District of California and lawyers for the City and County of San Francisco said yesterday that "a stipulation of settlement is likely forthcoming," which would end a dispute over the repatriation of two lintels from Thailand located in a San Francisco art museum.

The case of United States of America v. Two One-Thousand-Five-Hundred-Pound, Hand-Carved Lintels Removed from Religious Temples in Thailand (N.D.Cal. 2020-cv-07537) started when the Consul General of Thailand spotted the architectural elements on display at the Asian Art Museum in 2016. He demanded their return, but the museum reportedly said nothing until the U.S. government intervened, a
ccording to a civil forfeiture complaint filed by federal lawyers in October 2020, which seeks title to the cultural artifacts.

The court complaint describes a meeting that took place in May 2017 between the Thai Minister of Culture, the American Chargé d’affaires in Bangkok, and a Homeland Security Investigations (HSI) agent that discussed how the defendant property "belonged to two ancient temples in Northeastern Thailand and were designated as cultural artifacts protected under the laws of Thailand since 1935."

Archaeologists concluded that one lintel was from the Prasat Nong Hong Temple in Buriram Province, and the other was from the Prasat Khao Lon Temple in Sa Kaeo Province.

The forfeiture complaint recites that the City of San Francisco received the lintels as part of a donation from a collector (unnamed in court papers) who acquired the lintels in London and Paris in 1966 and 1968, respectively. 

"With respect to LINTEL 1," the U.S Attorney's Office writes, "the Museum had several letters that COLLECTOR 1 exchanged with representatives of GALLERY 1, telling the court that "one of the representatives of GALLERY1 and COLLECTOR 1 exchanged letters concerning the potential that at least one lintel that COLLECTOR 1 had purchased had been stolen from Thailand, and that another artifact had been taken out of Thailand illegally."

"With respect to LINTEL 2," prosecutors contend that "COLLECTOR 1 indicated that a Thai lintel in his possession had been reported stolen by the Thai government, and that the Thai government had asked COLLECTOR 1 to return the lintel."

Federal cultural property forfeiture cases like this one, where no bilateral agreement under the Cultural Property Implementation Act exists between the U.S. and Thailand, routinely rely on 19 U.S.C. § 1595a(c)(1)(A). That statute maintains that "merchandise shall be seized and forfeited if it is stolen, smuggled, or clandestinely imported or introduced."

Here, federal prosecutors assert that the Thai lintels constitute property owned by Thailand that was removed without permission, suggesting that the lintels are stolen property subject to legal forfeiture by the U.S. But they more expressly claim that "LINTELS 1 and 2 were imported into the United States in violation of Thai law, i.e. without the requisite export documents."

The U.S. does not enforce foreign export laws. But the McClain/Schultz doctrine--which goes unmentioned in the government's forfeiture complaint--allows U.S. courts to recognize a foreign export regulation when the foreign nation's cultural patrimony law clearly vests ownership in cultural property. 
Whether Thailand's patrimony law sufficiently grants such title is not made particularly clear in the court complaint. United States .v Schultz, 333 F.3d 393 (2nd Cir. 2003)United States v. McClain, 545 F.2d 988 (5th Cir.1977)

Prosecutors mention that both Thailand's 1934 Act on Ancient Monuments, Objects of Art, Antiquities and National Museums and its 1961 Act on Ancient Monuments, Antiques, Objects of Art, and National Museums "deem cultural artifacts, like LINTELS 1 and 2, state property." But the attorneys do not express that the lintels either constitute or are derived from proceeds traceable to a violation of the National Stolen Property Act under either 18 U.S.C. §§ 2314 or 2315. Instead, they emphasize that these patrimony laws "govern whether and/or when a piece of art is permitted to be exported from Thailand;" that they "forbade the unlicensed export of archaeological artifacts from specifically named archeological sites, including the Prasat Nong Hong and Prasat Khao Lon Temples;" and that "[n]o person or entity ever sought an application for an export license or other form of permission to take these lintels out of the Kingdom of Thailand prior to their removal from the country."

Such legal issues ultimately will prove academic. That is because the U.S. Attorney's Office tells the court that "significant discussions concerning settlement have taken place."

HSI Special Agent David Keller will discuss "US Law Enforcement’s Tool Box: Case Studies in Art and Antiquities Trafficking from Thailand" during a Cranfield University lecture taking place online on January 21, 2021. Register here.

UPDATE: FEBRUARY 11, 2021

Yesterday Magistrate Judge Donna Ryu dismissed the government's civil forfeiture claim after the United States and the City and County of San Francisco agreed to settle their dispute. The parties filed a stipulation on February 4 that calls for the return of the lintels to Thailand after the Asian Art Museum completes a formal deaccessions process and the Thai government files for administrative petition-and-remission with the U.S. Department of Justice. Once the museum surrenders the cultural objects to federal officials, the U.S. government will bear related expenses for the artifacts.

The forfeiture stipulation filed submitted to the court is typical in that its entry does "not constitute any admission of wrongdoing or liability" and "shall not be construed as a punishment or penalty."

The U.S. Attorney David Anderson reacted positively to the settlement, announcing“The United States is committed to returning stolen relics to nations seeking to preserve their heritage. We will use all our power, including civil forfeiture, to ensure that misappropriated cultural items are returned to their rightful owners.” His office's press release continued to emphasize that the lintels' export "renders them forfeitable under federal law," a legal interpretation that may not be as firm as suggested. But this legal claim is now moot because the case has been resolved successfully in the government's favor.

Text and original photos copyrighted 2010-2021 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.

Saturday, December 5, 2020

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.

NDAA requires antiquities dealers to file suspicious activities reports under the Bank Secrecy Act
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. B
ecause 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 sens
e 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 (the Anti-Money Laundering Act), 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. Policies that 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.

Saturday, October 31, 2020

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.


OFAC art market advisory

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."

Thursday, October 15, 2020

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 seized by Homeland Security
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."

Wednesday, August 12, 2020

cultural property lawyer ethics opinion

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.

Monday, August 3, 2020

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


U.S. v. AlCharihi mosaic
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."

Thursday, March 5, 2020

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.

Monday, January 20, 2020

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.

Tuesday, December 3, 2019

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.

Latchford indictment
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...."

Tuesday, July 9, 2019

Establishment Clause and Bladensburg Peace Cross
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. Kurtzmana 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.”