How Free Should a Freeport Be?: Reducing Money Laundering in the Art Market through Freeport Regulation
Cates Grier Saleeby | 25 Vand. J. Ent. & Tech. L. 239 (2023)
The tax incentives that luxury freeports provide have created opportunities for money laundering and other forms of financial crime through the sale of art. The use of such institutions in combination with the anonymity that art transactions allow can create a series of transactions that are difficult to track, making the market ripe for corrupt behavior. Legislation like the Anti-Money Laundering Act, the Bank Secrecy Act, and the Money Laundering Control Act have helped reduce financial crime, but an approach more narrowly tailored to the art market and the freeports that enable its high value sales would further the goals of those statutes.
This Note suggests that the United States should adopt a regulatory framework that requires luxury freeport operators to keep lists of freeport contents and contact information that are accessible to law enforcement officers during domestic investigations. Such a policy would reduce financial crime and increase transparency in the art market. The Note also offers suggestions for tax incentives that would increase the public display of privately owned art.