Wednesday, August 20, 2014

The latest trade figures show that the United States is the leading exporter and importer of fine art, antiquities, and other cultural goods. Dealers and consumers are thriving in this robust marketplace where billions of dollars are exchanged annually. Yet the market remains susceptible to criminal penetration.

American international trade in fine art and antiquities is very large. UN Comtrade and U.S. International Trade Commission (ITC) data reveal that America imported over $9 billion in art, collectors’ pieces, and antiques last year. It also exported the same types of goods in 2013—classified by Harmonized Tariff Schedule (HTS) 97—in an amount valued at $7.7 billion, crowning America as the global leader in both exports and imports of art and cultural heritage material by monetary value.

To put these cash amounts into perspective, $9 billion could purchase a fleet of 35 Boeing 747 aircraft or buy 530,000 Ford Focus automobiles.

The U.S. was also a top country in 2013 for imports and exports of HTS 9705 goods, an important subcategory of HTS 97 that includes collections and collectors' pieces of zoological, botanical, mineralogical, anatomical, historical, archeological, paleontological, ethnographic or numismatic interest. America was the second highest importer by value, bringing in roughly $263 million worth of HTS 9705 commodities from around the world. The U.S., in turn, exported nearly $192 million in HTS 9705 material, taking the third-place spot among nations.

This large and healthy trade in art and antiquities can be tempting to the black market because money laundering, smuggling, and fencing stolen objects are more easily disguised when smaller drops of dirty cash and contraband get lost in a vast ocean of legal commerce. In fact, the 2012 Basel Art Trade Guidelines cautioned that the market “faces a higher risk of exposure to dubious trade practices ... due to the volume of illegal or legally questionable transactions, which is noticeably higher in this sector than in other globally active markets.”

Organized crime can over-value or under-value invoices to disguise money transfers, a practice called trade based money laundering. Smugglers can create shell import and export companies to hide the origins and transfers of illegally trafficked cultural goods. And many other techniques can be used to hide criminal conduct that piggybacks on legitimate trade. Such methods may explain why $6.8 billion in art and antiquities shipped between the United Kingdom and the United States over the last five years remainmissing.

To peel away the black market that camouflages crimes of traffickingmoney laundering, and possibly terrorist financing requires rigorous initiatives that will shore up vulnerabilities existing within the broader white market. Industry transparency and due diligence are critical elements to any defense. Moreover, intensified law enforcement efforts directed at investigating and prosecuting cultural heritage trafficking and money laundering must be supported.

Photo credit: Jon Syverson

Copyright note: Although the data presented here is sourced from publicly available information, it has been carefully selected, coordinated, arranged, and analyzed so that it is subject to copyright as a compilation by CHL. The publication, retransmission, or broadcast of this compiled data is strictly prohibited without CHL's express consent.

By Rick St. Hilaire Text copyrighted 2014 by Cultural Heritage Lawyer. Blog url: Any unauthorized reproduction or retransmission of this post without the express written consent of CHL is prohibited.

Tuesday, August 5, 2014

This week’s seizure by U.S. Customs and Border Protection (CBP) of two teenagers’ vintage bagpipes may serve to increase public opposition against the current blanket ban on the movement and trade of ivory. This time among police officers.

Pipes | Drums reported the confiscation of the teens’ heirloom bagpipes, writing that the 17 year olds from Massachusetts possessed CITES permits (permits under the Convention on International Trade in Endangered Species of Wild Fauna and Flora) for the ivory that ornamented their 1936 and 1958 pipes. The pair crossed into Canada for a competition, only to have federal customs officials take away their musical instruments at the Vermont-Canada border on the way back.

The story of the bagpipe seizure has now spread among police officers on social media because many officers throughout the country are part of police associations' pipe and drum corps. While federal officials eventually returned the bagpipes to the teens, a local news report intimated that the return may only have come in response to intervention by a U.S. senator's office. 

Elephant poaching is a transnational crime that slaughters thousands of elephants each year. In fact, monitoring the Killing of Elephants (MIKE) reported that 22,000 were killed illegally in Africa in 2012. That devastation to endangered wildlife is why the United States and the international community strongly support measures to combat ivory trafficking.

But the unilateral administrative ban on the transfer of ivory, promulgated by the White House in February, remains an immoderate response that serves only to build public dissatisfaction since the ban covers more than just illegal modern-day ivory. The ban essentially forbids the complete commercial sale of elephant ivory objects and restricts many imports and exports regardless of their age or legal acquisition. More importantly, it has instantly turned many innocent owners of old ivory into current possessors of contraband when the focus of domestic enforcement should be on transnational smuggling networks, dealers and collectors who operate illegally, and the muddied ivory market with its links to the opaque antiquities market.

The Obama administration recently relaxed the ban for the benefit of museums and holders of antiques, but only after pressure had been exerted by interest groups. State, county, and local police officers may be the next group of citizens to pressure the White House.

In the meantime, if police pipers or others plan to travel with bagpipes that have any amount of ivory in them, U.S. Fish and Wildlife has a permit process that must be followed. It is described on the agency’s web site.

Photo credit: D. Carlton

By Rick St. Hilaire Text copyrighted 2010-2014 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Blog url: Any unauthorized reproduction or retransmission of this post without the express written consent of CHL is prohibited.