Cleaning The Palette: Anti-Money Laundering Is Coming For The U.S. Art World

For years, the United States has treated the high-value art trade as a regulatory outlier: enormous single-transaction prices, frequent use of intermediaries, cross-border mobility, and a strong culture of discretion, yet with few of the anti–money laundering (AML) obligations that apply to comparably risky financial activity. A bipartisan proposal, the Art Market Integrity Act, aims to change that by pulling significant portions of the U.S. art ecosystem into the Bank Secrecy Act (BSA) framework.

This article summarizes what the bill would do, why it is being proposed now, how it aligns with overseas approaches, and what art market participants (and their counsel) should consider implementing today, whether or not the bill becomes law.

From Antiquities (2020) to Art (Now)

Congress already took a first step toward regulating cultural-property commerce through AML rules. In the Anti-Money Laundering Act of 2020, lawmakers extended the BSA's reach to antiquities dealers and directed Treasury/FinCEN to build out the rules.

But that expansion did not squarely cover the broader art market, including many art dealers, galleries, and auction houses. The Art Market Integrity Act is designed to fill that gap by treating certain art-market participants more like "financial institutions" for BSA purposes, thereby triggering the familiar compliance toolkit: customer due diligence, recordkeeping, and suspicious activity reporting.

What the Art Market Integrity Act Would Require

1. A narrower definition of "work of art": The bill takes a tighter view of what counts as a "work of art," carving out applied art, like product, fashion, architectural or interior design, and excluding mass-produced decorative objects such as ceramics, textiles and carpets. Under the bill, a "work of art" means "any original painting, sculpture, watercolor, print, drawing, photograph, installation art or video art."
2. Who is covered and who is not?: One of the proposal's most significant features is how broadly it defines who is covered. It would apply to essentially anyone doing business as an intermediary in art transactions, including dealers, advisors, consultants, custodians, galleries, auction houses, museums and collectors. At the same time, the bill carves out three categories of people: (i) those who, in the prior year, did not participate in any single art transaction over $10,000; (ii) those whose total art transactions in the prior year did not exceed $50,000; and (iii) artists who participate in the market solely to sell their own work.
3. The usual BSA requirements: The bill is intended to pull covered art market participants into the BSA's AML and counter-terrorism financing regime, requiring measures such as customer due diligence, recordkeeping, currency transaction reporting and suspicious activity reporting.
4. FinCEN would still need to write the details: As with many BSA expansions, the statute is only the first step. The bill contemplates Financial Crimes Enforcement Network regulations to specify scope, exemptions, geographic targeting (if any) and how obligations apply to intermediaries and agents.

Global Perspective

1. European Union: The EU's Fifth Anti-Money Laundering Directive expanded AML obligations to art market participants for transactions of €10,000 or more, including dealers, galleries and auction houses. The rules require art market participants to implement customer due diligence and know-your-customer procedures, verify beneficial ownership, monitor transactions, file suspicious activity reports with financial intelligence units and retain records for five years. They also mandate that dealers complete AML training, appoint a nominated officer and maintain internal controls and risk assessments while penalties for non-compliance can range from business closure to criminal prosecution. In 2024, the EU adopted a broader AML package, including instruments designed to harmonize supervision and strengthen enforcement coordination. AMLA, the EU Anti-Money Laundering Authority, is based in Frankfurt and became operational on July 1, 2025.
2. China: China's amended AML regime, effective January 1, 2025, does not expressly name art market participants, but it broadens the category of "specified non-financial institutions" that must carry statutory AML duties such as adopting preventive and monitoring measures, strengthening internal AML controls, conducting enhanced customer due diligence and improving large-transaction and suspicious-transaction reporting. The amendments also bring within scope dealers engaged in qualifying precious-metals and gemstone spot trades, and they preserve flexibility for regulators to designate additional obligated entities on a risk-based basis.

Practical Impact and What to Do Now

If the Art Market Integrity Act gains traction, the most immediate shift will be practical rather than theoretical: day-to-day deal mechanics would become more formalized. Parties would need more structured onboarding (collecting IDs, confirming entity details, identifying beneficial owners and running sanctions checks), intermediaries would face sharper lines around who the "client" is versus who ultimately controls the transaction, and market participants would be expected to document the rationale behind counterparties and payment flows with greater discipline.

That added transparency may strengthen confidence and traceability in the market, but it also introduces real friction, especially for smaller businesses that may not have dedicated compliance staff or budget for training and outside counsel, and for transactions involving layered entities, offshore accounts or buyers accustomed to confidentiality-driven practices.

Against that backdrop, players in the art industry are advised to adopt sensible, risk-based controls now, even if the bill stalls: basic Know Your Client; routine sanctions screening with a documented record of results; common-sense review of payment paths to flag unusual structures; a clear internal escalation channel for red flags; and a short written policy plus periodic training.

The core point is to treat AML as deal hygiene: modest upfront compliance infrastructure is typically far cheaper than the cost of responding to an investigation, unwinding a tainted transaction or managing the reputational fallout.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.