Eu FLag
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No101022004

Concealed identities: money laundering with stolen art and antiquities

The modern art and antiquities markets are particularly vulnerable to money laundering. This is partly explained by the changing character of art and the global art market in general. Investing in art is a new method used to diversify portfolios with secure and long-term investments. Due to skyrocketing prices in the art market, investors are becoming more and more interested. This changing trend has brought to the surface new methods for buying art such as art funds, art exchanges or art lending services. While investors’ capacity to invest in art has increased, so has the money launderer’s capacity to monetise art for criminal purposes and launder the proceeds of their crimes through the arts and antiquities trade.  

Several characteristics of the art market have made it attractive to criminals. Firstly, the art market is characterised by secrecy as collectors and investors desire to keep their identities private. They often use shell companies in order to make their art investment less traceable. Besides utilising shell companies, they use freeports in order to store their art in a non-transparent way. Such secrecy and confidentiality of the art market make it challenging to detect crime and the persons behind it. Secondly, the art market is characterised by lack of price transparency, making it attractive to money launderers.  Prices in the art market are not stable as there is no standardised art valuation methodology or quantitative analysis to determine the correct price of an art work. In addition, new trends such as Non-Fungible Tokens (NFTs) and personal tastes often influence the price of art work. Finally, there is a lack of a systematised database where all stolen art and antiquities would be catalogued, facilitating law enforcement authorities (LEAs) for their investigations. Efforts at the national and international level exist but the picture is dispersed and incoherent. 

Due to the aforementioned characteristics of the art market, money launderers try to exploit this new market which offers “advantages” for their dirty business. New technological tools are essential in the fight against money laundering in the art and antiquities. TRACE project aims to develop these tools which will assist LEAs to their investigations. 

What will TRACE do? 

There exists databases at the international and national level that are well developed and hold valuable information about art and stolen antiquities. Access to these databases are either public or restricted to public access. The existence of these databases cannot deny the fragmented picture around the world where several countries do not hold national databases. Even if every country had a database, the lack of a technological tool to conduct a combined analysis of such art databases against individuals, their residence(s), business transactions, money and asset movements makes it more problematic. In order to fill this gap, TRACE will design a knowledge graph and/or an analytical tool which will be helpful to LEAs.  

Furthermore, TRACE aims to assist LEA activities in the investigation phase. Data and evidence collected in electronic format will be analysed faster and more efficiently by the AI technologies developed by the TRACE project. This will allow investigators to visualise and combine all data and evidence in a clear way and utilise other useful options such as translation services aimed to further the investigation and prosecution in money laundering with the use of stolen art and antiquities.

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Author: Coventry University (CU)