Art and organised crime: from awareness to action

In 2007, Jean-Michel Basquiat's painting Hannibal crossed the US border declared at a fictitious value of $100, when it was actually worth eight million. This incident, linked to money laundering operations carried out by a former Brazilian banker, illustrates how the art market can find itself at the centre of illegal activities (2).

The relationship between art and organised crime is attracting increasing attention from researchers and regulators, particularly as the expansion of the art market (3) and its digital transformation reveal new financial and ethical vulnerabilities. Recent research conducted by Guergana Guintcheva and Bertrand Monnet (EDHEC) takes a close look at these issues and outlines ways to strengthen the fight against fraudulent practices in the art world (1).

The art market: fertile ground for money laundering?

The global art market reached $57.5 billion in 2024 (4), confirming its appeal as an investment asset (5). While art remains closely linked to noble motivations such as passion, collecting, transmission and heritage, it has also become a financial instrument in its own right.

High-value transactions, valuation mechanisms that are often subjective or susceptible to manipulation, and the opacity of the identity of sellers/buyers make the art market particularly vulnerable to criminal practices, including money laundering.

The United Nations Office on Drugs and Crime (UNODC) estimates that between 2% and 5% of global GDP is laundered each year, equivalent to between $2.22 trillion and $5.54 trillion in illicit funds. Money laundering through works of art is just one example among many other channels, such as real estate transactions and gambling.

However, the art industry is characterised by a lack of transparency and remains one of the least regulated markets in terms of anti-money laundering. This regulatory vacuum, which is particularly pronounced when compared to sectors such as finance or real estate, makes the art market highly attractive and ‘comfortable’ for criminals seeking to launder funds of dubious origin.

Furthermore, the portability of artworks, the possibility of subjective valuation and the frequent use of intermediaries allow criminals to conceal or transfer resources without being subject to rigorous scrutiny.

How does money laundering work in the art market?

The 1988 United Nations Vienna Convention (5) defines money laundering (Article 3.1, p. 95) as follows: ‘the conversion or transfer of property, derived from crime, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person involved in the commission of crime to evade the legal consequences of his actions’.

Money laundering is organised in three distinct phases: placement, layering and integration. 

Placement involves introducing cash into the financial system, for example through bank deposits. Layering aims to complicate the traceability of funds by multiplying transfers between different bank accounts or between various financial institutions. Finally, integration involves reintroducing the laundered funds into the legitimate economy through investments in various assets, such as real estate, businesses, or works of art.

In recent years, digital art and NFT transactions have created additional blind spots, as the anonymity offered by blockchain and fluctuating valuations can mask illicit transfers.

Example of using the art market to launder money

A criminal network may use the art market as a mechanism for money laundering. It may involve other criminal entities in this scheme and grant them a fraction of their cash payments.

They use intermediaries operating in free zones who, at their request, purchase works of art several times a year for several million in cash, in exchange for a substantial commission (placement). The pieces are then resold in various international galleries (layering), and the funds from these transactions are transferred to offshore financial structures associated with the original criminal network (integration).

How can we strengthen the fight against money laundering in the art world?

Using a qualitative approach combining semi-structured interviews with key stakeholders and a longitudinal analysis of international media coverage of the subject, this research aims primarily to raise awareness of the role of art in illicit finance, an issue often overlooked by both market professionals and the general public.

At the macroeconomic level, after several years of gradual reforms, the regulatory framework for the art market has recently evolved towards stricter standards. The European Union, through the Sixth Anti-Money Laundering Directive (6AMLD) adopted in 2021 (7), imposes enhanced obligations on professionals in the sector (galleries, auction houses, dealers), such as verifying the identity of customers and monitoring transactions exceeding £10,000.

At the international level, the Financial Action Task Force (FATF), created in 1989, establishes and promotes global standards to combat money laundering, terrorist financing and other financial threats, encouraging States to incorporate these standards into their national legislation. However, the effectiveness of these measures remains uneven, as their application and enforcement vary considerably from one jurisdiction to another and among private actors who are reluctant to disclose the identity of their customers.

At the microeconomic level, limiting cash payments curbs money laundering, but monitoring remains complex. 'Know Your Customer' procedures enhance transparency, although the use of trusts often masks the beneficial owners. Technology can also help in the fight against money laundering. Specialised software such as ArtAML™, ComplyAdvantage, Sanction Scanner and NorthRow assist operators in identity verification, transaction monitoring and document control. These tools help to detect red flags, such as unusual payments or incomplete documents.

Museums also have an important responsibility in the fight against art-related money laundering. For example, some museums have participated in public awareness initiatives by exhibiting works that have been seized or implicated in illicit trafficking. In 2024, after a seizure in Italy of more than 80 works of art linked to organised crime, including pieces by Salvador Dalí, Andy Warhol and Giorgio De Chirico, they were exhibited in Milan (8) to raise public awareness of the illicit trafficking of works of art. Similarly, in 2021, the Louvre exhibited cultural objects seized by French customs and involved in illicit trafficking (9).

This work highlights how the art market, due to its complexity and opacity, remains fertile ground for illicit money laundering activities, underscoring the need for increased vigilance and systematic reforms. Faced with these challenges, the combined efforts of regulatory authorities, industry professionals and cultural institutions appear essential to building a more transparent and resilient framework capable of effectively countering organised crime networks.

Strengthening due diligence, harmonising cross-border regulations and promoting ethical responsibility within the arts ecosystem are all crucial measures that must be taken to reduce the exploitation of the sector by transnational crime.

References

(1) Art as an illicit investment: money laundering in the art market and strategies for risk mitigation. Working paper - Guintcheva Guergana, Monnet Bertrand.

(2) Valuable as Art, but Priceless as a Tool to Launder Money (May 2013), New-York Times - https://www.nytimes.com/2013/05/13/arts/design/art-proves-attractive-refuge-for-money-launderers.html

(3) Li, Y., Ma, M. X., & Renneboog, L. (2022). Pricing art and the art of pricing: On returns and risk in art auction markets. European Financial Management, 28, 1139–1198 - https://doi.org/10.1111/eufm.12348

(4) The Art Basel and UBS Global Art Market Report 2025 - https://theartmarket.artbasel.com/

(5) Mei, Jianping and Moses, Michael, Art as an Investment and the Underperformance of Masterpieces (February 2002). NYU Finance Working Paper No. 01-012, Available at SSRN: https://ssrn.com/abstract=311701 or http://dx.doi.org/10.2139/ssrn.311701

(6) Convention des Nations Unies contre le trafic illicite de stupéfiants et de substances psychotropes (1988) - https://www.unodc.org/pdf/convention_1988_fr.pdf

(7) Directive (UE) 2024/1640 du Parlement européen et du Conseil du 31 mai 2024 relative aux mécanismes à mettre en place par les États membres pour prévenir l’utilisation du système financier aux fins du blanchiment de capitaux ou du financement du terrorisme, modifiant la directive (UE) 2019/1937, et modifiant et abrogeant la directive (UE) 2015/849 (Texte présentant de l'intérêt pour l'EEE) - https://www.legifrance.gouv.fr/jorf/id/JORFTEXT000049761732

(8) 80 œuvres de maîtres confisquées à la mafia exposées à Milan (Déc. 2024), Beaux-Arts - https://www.beauxarts.com/grand-format/80-oeuvres-de-maitres-confisquees-a-la-mafia-exposees-a-milan/

(9) Le Louvre expose des trésors culturels saisis par la douane, encore sous scellés. Une première en France (Mai 2021), communiqué de presse - https://www.douane.gouv.fr/sites/default/files/2021-05/25/2021-05-exposition-au-louvre-de-biens-culturels-saisis-en-douane-vf.pdf

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