The National Defense Authorization Act\u2019s 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.
\n<\/span><\/span><\/h2>\n\n![\"NDAA](\"https:\/\/culturalheritagelawyer.com\/wp-content\/uploads\/2023\/04\/NDAA_png.png\")
<\/a><\/div>\nAntiquities 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.<\/span><\/p>\n<\/div>\n
Within the 4500+ pages of the William M. (Mac) Thornberry\u00a0National Defense Authorization Act (NDAA) (H.R. 6395)<\/a>, 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 <\/span>the Bank Secrecy Act\u2019s (BSA) filing requirements.<\/span><\/p>\nLaw enforcement officers investigating trade fraud, receiving stolen property, and illicit financial flows connected with antiquities trafficking currently are hampered by\u00a0statutes that permit corporations like import companies to be created in some states without recording their true owners. Meanwhile, unlike sellers of\u00a0precious metals, stones, and jewels,\u00a0<\/span>antiquities dealers are not required to report suspicious financial transactions to authorities. Adoption of the NDAA would change this legal landscape considerably.<\/span>
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<\/a>\u00a0unless certain legal protections for Big Tech giants are repealed. B<\/span><\/span>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<\/a>,\u00a0\u201cThis year\u2019s 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.\u201d<\/span><\/span><\/span><\/p>\n[UPDATES<\/span><\/b>\u00a0December 8, 2020<\/b><\/span> \u2013 The White House signaled opposition to the legislation<\/a>, saying that it wants an \u201cimproved NDAA,\u201d\u00a0explaining that it \u201cfails to include critical national security measures, includes provisions that fail to respect our\u2026our military\u2019s history, and contradicts efforts\u2026to put America first in our national security\u2026.\u201d The House, meanwhile, adopted the conference agreement 335-78.\u00a0<\/span>December 11, 2020<\/span><\/b> \u2013 The Senate approved the conference report by a vote of 84-13.\u00a0<\/span>December 23, 2020<\/b><\/span> \u2013 The White House <\/span>vetoed<\/a> the legislation. December 28, 2020<\/b><\/span> \u2013 The House voted 322-87 to override the President\u2019s veto. <\/span>January 1, 2021 \u2013\u00a0<\/b>The Senate voted 81-13 to override the President\u2019s veto. Therefore, the NDAA has been enacted into law.]<\/b><\/div>\n
The sens<\/span>e of Congress, articulated in the conference report, is that \u201cmore than 2,000,000 corporations and limited liability companies are being formed \u2026 each year\u201d while \u201cmalign actors seek to conceal their ownership \u2026 to facilitate illicit activity.\u201d\u00a0<\/span>\u201c[M]oney launderers and others involved in commercial activity,\u201d <\/span>note lawmakers, \u201c<\/span>intentionally conduct transactions through corporate structures in order to evade detection, and may layer such structures, much like Russian nesting \u2018Matryoshka\u2019 dolls, across various secretive jurisdictions\u2026.\u201d\u00a0<\/span>The conference report expresses Congress\u2019 aim to \u201cclose[] significant AML-CFT gaps, including by adding the trade in antiquities to coverage under the BSA.\u201d<\/span><\/p>\n
Channeling the language of previously filed legislation known as the Corporate Transparency Act<\/a>, Section 885 of the NDAA conference agreement authorizes the U.S. Treasury Department\u2019s 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, \u201cprotect vital United States national security interests.\u201d
<\/span>
Section 6110 of the NDAA (the Anti-Money Laundering Act), meanwhile, expands the BSA\u2019s reporting requirements to those \u201cengaged 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,\u201d requiring these parties to forward a Suspicious Activity Report (SAR) to FinCEN when a financial transaction appears criminal.\u00a0<\/span>CHL <\/i>has urged this legal reform in <\/span>blog posts<\/a>\u00a0since 2014.
<\/span>
But similar BSA reporting requirements for art <\/i>dealers, advisors, consultants, and others engaged in the art trade will have to wait. That\u2019s because the NDAA conference agreement simply calls on \u201cTreasury and its law enforcement partners [to] further study the risks posed by the facilitation of money laundering through the trade in art\u201d in order to determine, among other issues, \u201cthe 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.\u201d
<\/span>
Art dealers came into particular focus earlier this year when the Senate Committee on Homeland Security and Government Affairs released \u201c<\/span>The Art Industry and U.S. Policies that Undermine Sanctions,\u201d<\/a>\u00a0a 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 \u201cthe largest legal, unregulated market in the United States.\u201d
<\/span>
Applying BSA reporting requirements to both art and antiquities dealers has been tried unsuccessfully in the past<\/a>.<\/p>\nShould 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.<\/p>\n
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![\"NDAA](\"https:\/\/1.bp.blogspot.com\/-RR4BBLTuLMw\/X8u_F2agZNI\/AAAAAAAAC1o\/yTlcpBZ1XL0XBskg4e_TqmKDHPp5atiZACNcBGAsYHQ\/s1200\/NDAA_png.png\")
<\/a><\/div>\nAntiquities 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.<\/span><\/p>\n<\/div>\n Law enforcement officers investigating trade fraud, receiving stolen property, and illicit financial flows connected with antiquities trafficking currently are hampered by\u00a0statutes that permit corporations like import companies to be created in some states without recording their true owners. Meanwhile, unlike sellers of\u00a0precious metals, stones, and jewels,\u00a0<\/span>antiquities dealers are not required to report suspicious financial transactions to authorities. Adoption of the NDAA would change this legal landscape considerably.<\/span> 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.<\/p>\n <\/span><\/p>\n
Within the 4500+ pages of the William M. (Mac) Thornberry\u00a0National Defense Authorization Act (NDAA) (H.R. 6395)<\/a>, 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 <\/span>the Bank Secrecy Act\u2019s (BSA) filing requirements.<\/span><\/p>\n
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<\/a>\u00a0unless certain legal protections for Big Tech giants are repealed. B<\/span><\/span>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<\/a>,\u00a0\u201cThis year\u2019s 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.\u201d<\/span><\/span><\/span><\/p>\n
The sens<\/span>e of Congress, articulated in the conference report, is that \u201cmore than 2,000,000 corporations and limited liability companies are being formed \u2026 each year\u201d while \u201cmalign actors seek to conceal their ownership \u2026 to facilitate illicit activity.\u201d\u00a0<\/span>\u201c[M]oney launderers and others involved in commercial activity,\u201d <\/span>note lawmakers, \u201c<\/span>intentionally conduct transactions through corporate structures in order to evade detection, and may layer such structures, much like Russian nesting \u2018Matryoshka\u2019 dolls, across various secretive jurisdictions\u2026.\u201d\u00a0<\/span>The conference report expresses Congress\u2019 aim to \u201cclose[] significant AML-CFT gaps, including by adding the trade in antiquities to coverage under the BSA.\u201d<\/span><\/p>\n
Channeling the language of previously filed legislation known as the Corporate Transparency Act<\/a>, Section 885 of the NDAA conference agreement authorizes the U.S. Treasury Department\u2019s 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, \u201cprotect vital United States national security interests.\u201d
<\/span>
Section 6110 of the NDAA (the Anti-Money Laundering Act), meanwhile, expands the BSA\u2019s reporting requirements to those \u201cengaged 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,\u201d requiring these parties to forward a Suspicious Activity Report (SAR) to FinCEN when a financial transaction appears criminal.\u00a0<\/span>CHL <\/i>has urged this legal reform in <\/span>blog posts<\/a>\u00a0since 2014.
<\/span>
But similar BSA reporting requirements for art <\/i>dealers, advisors, consultants, and others engaged in the art trade will have to wait. That\u2019s because the NDAA conference agreement simply calls on \u201cTreasury and its law enforcement partners [to] further study the risks posed by the facilitation of money laundering through the trade in art\u201d in order to determine, among other issues, \u201cthe 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.\u201d
<\/span>
Art dealers came into particular focus earlier this year when the Senate Committee on Homeland Security and Government Affairs released \u201c<\/span>The Art Industry and U.S. Policies that Undermine Sanctions,\u201d<\/a>\u00a0a 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 \u201cthe largest legal, unregulated market in the United States.\u201d
<\/span>
Applying BSA reporting requirements to both art and antiquities dealers has been tried unsuccessfully in the past<\/a>.<\/p>\n