By Sean Parker, August 8, 2025
In the opening scene of a 1999 Hollywood hit, The Thomas Crown Affair, Pierce Brosnan’s character uses slick deception and coordination to steal a Monet masterpiece without breaking a sweat. The theme of this story has been retold for centuries: art and antiquities are often involved in financial crimes or used to facilitate them.
In 2023, the Financial Action Task Force (FATF) – a global watchdog for money laundering and terrorist financing – released a report titled Money Laundering and Terrorist Financing in the Art and Antiquities Market. It noted that the estimated value of global art and antiquities sales in 2021 reached $65.1 billion USD. This market is highly vulnerable and susceptible to money laundering, and the true value of transactions related to financial crime is unknown. The report notes that art and, in particular, cultural antiquities “originating from areas where terrorist groups are active, or bordering jurisdictions, are specifically vulnerable to being used for terrorist financing.”
The total risk to Canada is unknown, but specific instances of art crime have been intercepted by the RCMP. Canada has three major financial centres – Toronto, Vancouver, and Montreal – which have thriving arts and antiquities scenes where this type of laundering may go undetected.
As outlined in the 2023 FATF report, certain market participants who provide services to facilitate art and antiquities sales are particularly vulnerable to money laundering. These include galleries, antiquities dealers, auction houses, storage facilities, art advisers, intermediaries, online platforms/markets, and art finance service providers.
Generally, financial crime flows through art and antiquities in three ways:
- An item is stolen, and then sold to an unsuspecting buyer who purchases it without knowledge of its questionable procurement;
- A buyer with full knowledge of the art or antiquity’s illegal acquisition purchases it;
- Art and antiquities are purchased to help launder ill-gotten funds, via the sale of the art at a later date to help legitimize the funds.
Fictitious invoices often play a large role in legitimizing the transaction, and collusion often works as a vehicle for money laundering. For example, a criminal might collude with another party by selling a piece of art through an auction house. This would play out through several steps. First, a criminal accomplice would buy the artwork using funds generated from a criminal offence. The auctioneer would receive the funds, maybe as cash, a negotiable instrument, or as a wire. Then, the auctioneer would transfer the funds to the criminal who had put up the artwork up for auction. From a financial institution’s perspective, the money entering their client’s (criminal) account looks like it is coming from a legitimate business.
This money laundering approach can be replicated for numerous transaction types in the art and antiquities world. In the place of the auctioneer, for example, the trusted middle party could just as easily be an art broker, art gallery, or antiquities dealer – easy targets for two criminal accomplices to exploit. In 2024, the UK National Crime Agency warned that storage facilities for artwork could be used by “criminals seeking a capital asset that can be safely stored, that appreciates in value over time, and that can be liquidated if and when required.”
In cases in which the artwork or antiquity is being used to hold funds for the purpose of placing that money into the financial system, it is important to these criminal actors that the item generally retains its value. Money launderers may take an acceptable loss on value. However, if the loss is too great, it defeats the purpose of laundering funds through art and antiquities.
In Canada, art can be used to defraud buyers. Then, the funds gained as a result of the fraud are laundered through financial systems. A recent Canadian case involving art and financial crime was the Morrisseau fraud ring which produced forged works that it purported to be creations of the Anishinaabe artist Morrisseau. Over 190 forgeries were identified with 117 being seized by investigators. Police laid at least 40 charges against eight people.
According to the Sotheby’s Institute of Art, art crime is estimated to be about a $6 billion to $8 billion global racket each year. The RCMP has a dedicated unit – its Integrated Art Crime Investigation Team – which probes these matters. At the time of its 2009 launch, CBC News reported that the unit’s creation was motivated by police concern over crime syndicates stealing authentic works of art, as well as creating fakes for the purpose of global money laundering.
Some countries are taking steps to fight back
The use of art and antiquities to launder funds is an open secret in the financial crime world. However, many countries around the world have addressed this gap to varying degrees. In an April 2025 interview with InSight Crime, Roberto de Michele – a principal specialist at the Inter-American Development Bank who previously worked as a director of policy planning in the Anti-Corruption Office of Argentina – talked about money laundering schemes and their impact on Latin America. He described a report that he co-authored which identifies two key types of crime. “On the one hand, there are criminal actors who engage in the acquisition, theft, or looting of heritage assets and build an entire illicit chain around their commercialization,” said de Michele in the interview. “On the other, you have cases where the assets themselves are not inherently illicit – for example, a recognized artist’s work that is legally sold but bought by someone intending to launder money.”
So what does this mean for Canada? Looking towards the European Union and the United States, each have legislation in place to varying degrees around arts and antiquities money laundering. Europe currently has the 5th EU Anti-Money Laundering Directives which extend anti-money laundering (AML) obligations to art dealers, galleries, auction houses, and other EU art market participants. In the United States, the Anti-Money Laundering Act is presently under review by the US Treasury Department. It includes AML supervision over antiquities which would fall within the same regulatory framework as financial institutions under the United States Bank Secrecy Act. However, it has not yet been implemented. In this regard, the US art market has been largely overlooked by American law makers, despite being valued at $27.2 billion dollars in 2023. Meanwhile, the EU allows each member country to interpret the directives individually into their own laws, and there is little data available regarding the directives’ effectiveness. However, these two regions at least appear to acknowledge there is money laundering risk related to antiquities and, to a degree, art. Only time will tell if the legislation that has been put forward will be effective. What is clear is they are taking the issue seriously and attempting to close known loopholes that allow money laundering to occur with relative ease.
In Canada, it appears that new regulations for financing and leasing companies – brought into effect on April 1, 2025 – may partially address the need for an art and antiquities compliance program, since financing is sometimes offered by art and antiquities dealers. This may have been an unintentional outcome of the new regulations. Based on the criteria set out in these regulations, they will capture art and antiquities dealers who offer financing or leasing where it is done for business purposes, or where the art/antiquities are valued at $100,000 or more. However, this appears to provide only partial coverage, as it does not fully address risks related to arts and antiquities dealers who do not offer financing or leasing. This leaves a serious gap. From a financing and leasing perspective, was this the intended nature of the legislation, and is there an awareness from arts and antiquities dealers who offer this service? As of publication, FINTRAC had not replied to an inquiry made by the author seeking further details on this regulation and how it will be applied.
It’s worth noting there are potential gaps in the definition of finance and leasing set out in the regulations. There are also questions about applicability in relation to arts and antiquities, when viewed from a risk management point of view. Consider the following:
- An individual representing a criminal enterprise purchases several pieces of art under the $100,000 threshold as part of one retail transaction, and buys them from an art dealer who offers financing or leasing as part of their general business. Does this trigger obligations under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act?
- A majority of art dealers, antiquities dealers, and auction houses do not offer financing or leasing, and therefore would not be subject to this legislation. This gap – although addressed in other jurisdictions – remains unaddressed in Canada, despite organized crime having a presence in the three largest Canadian cities.
To build a well thought out financial crime risk management program, arts and antiquities dealers and their market participants need to be specifically called out. There is an opportunity for the Canadian government to develop legislation and regulations that address this risk head on. Such a compliance program could be modelled after other non-account-based reporting entities, like money service businesses. The key is building out a risk-based approach, and acknowledging the nuances and challenges that art and antiquities dealers face in Canada. Taking such action would not only start aligning Canada with its neighbours to the south and across the Atlantic, but it would also acknowledge the global issue of financial crime that impacts arts and antiquities.
Sean Parker is a compliance leader with AML Consultancy Inc, with well over a decade of experience in financial crime compliance, and a contributor for the Macdonald-Laurier Institute.
