§2.Records and reports on monetary instruments transactions
This section amends the definition of "financial institution" in 31 U.S.C. 5312(a)(2) under the Bank Secrecy Act (BSA)—which requires such entities to file reports and maintain records on monetary transactions to combat money laundering and illicit finance—by inserting a new subparagraph (Y) after (X) to include persons engaged in the trade in works of art (e.g., dealers, advisors, consultants, custodians, galleries, auction houses, museums, collectors, or other intermediaries), unless in the prior year they (i) participated in no single transaction over $10,000 involving a work of art, (ii) participated in total transactions valued under $50,000 involving works of art, or (iii) sold only works of art they created. It also adds a definition of "work of art" in new 5312(c)(2) as any original painting, sculpture, watercolor, print, drawing, photograph, installation art, or video art, excluding applied art (e.g., product, fashion, architectural, or interior design) or mass-produced decorative art (e.g., ceramics, textiles, or carpets). (Thus, qualifying art market participants become subject to BSA reporting requirements such as currency transaction reports over $10,000 and suspicious activity reports.) The amendments take effect on the earlier of Treasury rules issuance or 360 days after enactment.
This section further directs the Secretary of the Treasury, within 360 days of enactment, to update the October 30, 2020, Office of Foreign Assets Control advisory on risks of high-value artwork transactions involving sanctioned persons or entities, in coordination with other federal agencies.
In addition, it requires the Director of the Financial Crimes Enforcement Network, within 180 days of enactment and in consultation with other agencies, to issue proposed rules implementing the amendments, addressing (1) applicable persons based on domestic or international location, (2) application to agents or intermediaries acting for purchasers, and (3) potential exemptions.
Finally, this section makes technical and conforming amendments to section 6110(a) of the Anti-Money Laundering Act of 2020 to update cross-references to the new subparagraph (Y).