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Monday, May 21, 2018

Proposed Bill Enlists Art & Antiquities Dealers in the Fight Against Money Laundering

The U.S. House of Representatives will consider a bill that adds art and antiquities dealers to the Bank Secrecy Act (BSA). Introduced last Friday by Representative Luke Messer (R-IN-6), H.R. 5886 would aid law enforcement's effort to uncover money laundering and terrorist financing schemes.

The bill replies "yes" to the question, Shouldn't Art and Antiquities Sellers Be Subject to Anti-Money Laundering/Counter-Terrorist Financing Laws?, and it satisfies one of the six proposed recommendations to combat cultural heritage crime.

America's anti-money laundering and counter-terrorist finance laws (AML/CTF) such as the BSA generally require luxury and cash-intensive industries to satisfy recordkeeping requirements to identify and report possible criminal activity. Banks, casinos, and jewelry dealers are just some of the sectors already required to file Suspicious Activity Reports (SARs) with U.S. Treasury's Financial Crimes Enforcement Network (FinCEN). Under the terms of the legislation proposed last week, art and antiquities dealers also would be included.

Law enforcement officials depend on private sector cooperation to expose money launderers and terrorist financiers who thrive on opportunities to wash dirty money inside clean business transactions. As U.S. Treasury Secretary Steven T. Mnuchin pointed out at a FinCEN awards ceremony held on May 8, “Industry reporting under the BSA is critical to supporting law enforcement investigations that combat money laundering and other financial crimes."

Money laundering takes many forms and can be accomplished through a variety of stealthy maneuvers. FinCEN describes money laundering this way:
Money laundering is the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean"). Typically, it involves three steps: placement, layering and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the financial system through additional transactions until the "dirty money" appears "clean."
With regard to the art market, the Basel Institute on Governance, an independent nonprofit, makes an important observation in 2012 in its Basel Art Trade Guidelines that still holds true today:
In comparison with other trade sectors, the art market faces a higher risk of exposure to dubious trade practices. This is due to the volume of illegal or legally questionable transactions, which is noticeably higher in this sector than in other globally active markets. Far more serious than shady dealings in a legal grey area, the sector’s shadow economy encompasses issues ranging from looted art, professional counterfeiting and fake certificates to the use of art sales for the purpose of money laundering.
Because art and antiquities dealers sell objects that can fetch high prices, are portable, and are part of a marketplace that depends on confidentiality, discretion, and secrecy, their businesses are attractive to money laundering and other crimes, including terror financing. For some of the same reasons, dealers in precious metals, stones, and jewels were included in AML/CTF statutes like the BSA and, in like manner, art and antiquities dealers are fit for inclusion.

In fact, the Financial Action Task Force (FATF)--an inter-governmental body that publishes AML/CTF standards--specifically lists art and antiquities transactions as vulnerable to criminal exploitation. FATF's 2015 report on the Financing of the Terrorist Organisation Islamic State in Iraq and the Levant (ISIL), moreover, flags antiquities trafficking as a source of funding for terror groups when when they exercise control over archaeological sites. The European Parliament earlier this month adopted an AML/CTF resolution that closely aligns with FATF's standards.

The BSA is formally called the Currency and Foreign Transactions Reporting Act of 1970, and its provisions are codified in multiple statutory sections and regulations, the bulk of which can be found in 31 USC § 5311 et seq. and in 31 CFR Chapter X.

Congressman Messer's measure to amend the BSA has been assigned to the House Financial Services Committee for review. Reader's can follow the bill's progress here.

Photo credit: Ben Shafer/freeimages.com

Text and any original photos copyrighted 2010-2018 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, museum risk management, and archaeology. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are intended for informational purposes only and should not be used as legal advice applicable to the reader’s specific situation. In addition, the provision of this information to the reader in no way constitutes an attorney-client relationship.

Wednesday, May 2, 2018

New European AML/CTF Legislation Includes Art Dealers and Flags Cultural Artifacts Transactions

European Parliament
Members of the European Parliament have adopted a legislative resolution endorsing a December 2017 agreement with the European Council that, for the first time, includes art dealers and auction houses in the European Union's anti-money laundering/counter-terrorist financing (AML/CTF) compliance rules.

Directive (EU) 2015/849 is the EU's primary legal weapon to combat money laundering and terrorist financing. It has been updated four times. The Directive regulates designated high-cash sectors (e.g., banks, casinos) to prevent them from being financially co-opted by organized crime groups and terrorists. The legislation approved by the Parliament on April 19 seeks to broaden the Directive by including cultural property dealers on the list of regulated sectors.

The legislation specifically identifies "persons trading or acting as intermediaries in the trade of works of art, including when this is carried out by art galleries and auction houses, where the value of the transaction or a series of linked transactions amounts to €10,000 [~$12,000 USD] or more." Other named parties are those "persons storing, trading or acting as intermediaries in the trade of works of art when this is carried out by freeports, where the value of the transaction or a series of linked transactions amounts to €10,000 [~$12,000 USD] or more."

Additionally, the legislation updates Annex III of Directive (EU) 2015/849 by flagging particularly high risk financial transactions, particularly including transactions "related to ... cultural artefacts and other items of archaeological, historical, cultural and religious importance, or of rare scientific value, as well as ivory and protected species."

The Directive, docketed at PE-CONS 72/17, is intended to embrace the Financial Action Task Force's (FATF) standards more closely, which recommends that art dealers identify customers and report suspicious activity so that law enforcement can more readily spot money laundering and terrorist financing. FATF is an independent inter-governmental organization.

Art dealers aren't the only new parties added by the fifth Directive. Tax advisory services, property rental agents, electronic wallet providers, and virtual currency exchange service providers are listed too.

The President of the European Parliament and the President of the Council are expected to sign the measure. After publication in the Official Journal of the European Union, the Directive goes into effect three days thereafter. European member states then have 18 months to incorporate its terms into their own national laws.

For several years, CHL has advocated for art and antiquities sellers to be included in AML/CTF laws in the United States. See, for example, "Shouldn't Art and Antiquities Sellers Be Subject to Anti-Money Laundering/Counter-Terrorist Financing Laws?"

Photo credit: Till Achinger/freeimages.com

Text and original photos copyrighted 2010-2018 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, museum risk management, and archaeology. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are intended for informational purposes only and should not be used as legal advice applicable to the reader’s specific situation. In addition, the provision of this information to the reader in no way constitutes an attorney-client relationship.

Monday, April 23, 2018

Cultural Property Groups Weigh In on China MoU (including how to watch the May 2, 2018 CPAC hearing live)

China United States cultural property MoU
CLICK HERE TO WATCH CPAC'S PUBLIC HEARING ON MAY 2, 2018 AT 3PM EDT.

The cultural property Memorandum of Understanding (MoU) between the United States and China is up for renewal.

The MoU memorializes the two nations' bilateral agreement--first adopted in 2009 and later renewed in 2014--that imposes American import restrictions on endangered Chinese archaeological objects. These protections are authorized by the Convention on Cultural Property Implementation Act (CPIA), the federal law that gives effect to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property.

The MoU renewal under consideration covers artifacts dating from 75,000 B.C. through 907 A.D., as well as monumental and wall art 250+ years old.

The Cultural Property Advisory Committee (CPAC) will hold a public hearing on the matter on Wednesday, May 2 at 3:00 p.m. EDT. This portion of the meeting is expected to last an hour. You can watch the proceedings on the web by clicking here.

Before next month's meeting, written comments were submitted to CPAC expressing both support and opposition to the renewal of the bilateral agreement.

The Association of Art Museum Directors (AAMD), made up of about 240 major art museum directors in North America, wrote in support of the renewal, emphasizing "the excellent cooperation that exists on numerous levels between American museums and their Chinese peers." But the professional association voiced concern about China's past compliance--or lack thereof--with the existing bilateral agreement. In an eight page statement, the AAMD outlined several problems, including that:
  • China had not used best efforts to allow museum exhibition objects to remain outside its borders for up to two years. "[T]he AAMD has not discovered any Chinese loan to AAMD members (or anyone else) made in the last five years with durations longer than one year, much less two." Short exhibition durations increase loan fees and costs and "make organizing an exhibition in the United States challenging."
  • China had not adequately supplied choice objects for American museum exhibitions. "Though the [current] MOU requires an increase in the percentage of Grade 1 items permitted in an exhibition (currently 20%), the AAMD observed little change."
  • There were high museum loan fees, "which are to some extent mandated by a system in China requiring museums to generate substantial revenue through object loan fees." "Despite [China] being required to encourage museum loans of archaeological material, including recently excavated objects, for research and public display purposes, as well as to facilitate loan exhibitions to the United States, significant barriers remain."
  • The MoU favors the Chinese art market to the disadvantage of the U.S. art market. "[T]he United States should not be a market for looted antiquities, but the United States market should not be restricted in order to advantage other markets."
  • China still has no immunity from seizure law that protects American art loaned to China from government seizure. "China benefits from the immunity from judicial seizure statute in the United States when loans are made to American museums .... While many of the major marketplace countries of the world have adopted immunity from seizure laws ... China has no such protections for works of art entering its borders on loan."
  • The MoU's designated list of protected archaeological objects needs to be rewritten. "The list is overly broad, the categories sometimes incorrect, its descriptions provide little guidance for customs officials, and in many respects, it fails to put importers on fair notice of what can and cannot be imported."
The Antiquities Coalition (AC) voiced strong support for the MoU renewal. Attorney and archaeologist Tess Davis, executive director of the nonprofit whose mission is to combat antiquities trafficking, wrote: "Our organization ​believes that MOUs between the United States and foreign governments like China are an important tool in the fight against cultural racketeerin​g." The AC observed that China "is in effect one large archaeological site," making "this ancient history ... difficult to protect from looters and traffickers."

Davis pointed out that the original MoU, adopted in 2009, came on the heels of a crisis in the illicit trade in antiquities, prompting the publication of an International Council of Museums Red List to spotlight endangered Chinese artifacts. "However, despite much progress in the fight against cultural racketeering, China’s ancient sites remain at risk, and will so long as there is an illicit market for its art and artifacts," she added.

The AC observed that the U.S. is "a major destination for Chinese antiquities, both licit and illicit" with Davis writing that the "American market for Asian art is still the 'Wild, Wild East,'" noting that "one of the most prominent U.S. dealers of Chinese antiquities, Nancy Wiener, is now facing felony charges." "Clearly there is still a need for the U.S.–China MOU," the AC concluded.

Attorney Peter Tompa, writing on behalf of the Committee for Cultural Policy and its sister organization Global Heritage Alliance, voiced opposition to the renewal of the bilateral agreement. "[I]t is impossible to reconcile the MOU's import restrictions with the booming market for Chinese artwork and antiquities in Mainland China," the Washington lawyer and lobbyist wrote. " The rise in demand for Chinese artwork and antiques in China indicates that the Chinese government sees antiques not as something to be protected, but as something to be commodified and enjoyed by Chinese citizens even as the U.S. on China's behalf seeks to restrict the supply of such objects to its own citizens."

Tompa also submitted an opposition letter on behalf of the International Association of Professional Numismatists and the Professional Numismatists Guild urging that "CPAC recommend either suspending the current agreement with the PRC [People's Republic of China] or delisting all bronze 'cash type' coins." Tompa is the attorney pursuing the long-running Baltimore coin test case.

This round's MoU renewal process between the U.S. and China takes place against the backdrop of several flashpoint issues, including a battle between the two nations over tariffs, China's expansion in the South China Sea, the Chinese government's intensified campaign targeting Christian churches, its role in the North Korean nuclear crisis, and its human rights abuses as chronicled by last Friday's U.S. State Department report.

CPAC's role is to give advice the White House when foreign nations petition the U.S. for help under the terms of the 1970 UNESCO Convention to protect cultural heritage in jeopardy of looting. All CPAC's eleven current members were appointed or reappointed by former President Barack Obama.

The MoU renewal is formally docketed as Memorandum of Understanding Between the Government of the United States of America and the Government of the People’s Republic of China Concerning the Imposition of Import Restrictions on Categories of Archaeological Material from the Paleolithic Period through the Tang Dynasty and Monumental Sculpture and Wall Art at least 250 Years Old (DOS-2018-0013-0018).

Photo credit: Lyndon Smith/freeimages.com

Text and original photos copyrighted 2010-2018 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, museum risk management, and archaeology. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are intended for informational purposes only and should not be used as legal advice applicable to the reader’s specific situation. In addition, the provision of this information to the reader in no way constitutes an attorney-client relationship.

Saturday, March 31, 2018

AUSA Calls Baltimore Test Case "A Numismatic Fantasy"

AUSA Molissa Farber
"It's not a case about coins that the Guild wants. This is a case about regulations that the Guild doesn't want." That's how Assistant United States Attorney Molissa Farber characterized the Ancient Coin Collectors Guild's (ACCG) latest argument before the Fourth Circuit Court of Appeals in the Baltimore test case.

Both the ACCG and federal government offered oral arguments to the appeals court on March 22, marking the case's ninth year winding through the court system.

Listen to the arguments presented in U.S. v. Three Knife-Shaped Coins et al. here. Attorney Peter Tompa argued for the Guild, and Attorney Farber for the government.

The test case started in 2009 when the ACCG imported unprovenanced Cypriot and Chinese ancient coins from a dealer in London. AUSA Farber told the court of appeals that "the Guild wanted to bring this case to pursue a numismatic fantasy of bringing down the CPIA's regulations on ancient coins."

The CPIA is the Cultural Property Implementation Act, the federal law that authorizes import controls safeguarding at-risk archaeological and ethnological objects originating in foreign nations that have signed bilateral agreements with the United States. Both Cyprus and China have such agreements.

AUSA Farber explained to the appeals court that the statutory purpose of the CPIA is "to prevent the importation of looted goods."

But the ACCG complained that the application of the CPIA violates its Fifth Amendment due process property rights, insisting that the government--not the importer--bears the burden to prove that ancient coins were first discovered in or were subject to export control of a State Party to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. According to the Guild, federal authorities must satisfy this burden of proof before officials can seize and forfeit at-risk ancient coins under the CPIA's authority.

Farber countered this proposition. "As the district court observed,  looted goods are very unlikely to come with documentation as to their date of export. And ... if you put that burden on the government to show date of export you're allowing looted goods into the United States, which is contrary to the purpose of the statute." She pointed out that the CPIA statute mandates that the importer prove the date of export when that date is not known.

Thus far, the ACCG's many court actions have solidified, rather than weakened, the CPIA's capacity to prevent looted ancient coins from entering America's stream of commerce.
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'Text and original photos copyrighted 2010-2018 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, museum risk management, and archaeology. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are intended for informational purposes only and should not be used as legal advice applicable to the reader’s specific situation. In addition, the provision of this information to the reader in no way constitutes an attorney-client relationship.

Thursday, March 29, 2018

[VIDEO] A First: Police Make Antiquities Trafficking Arrests in Terrorist Financing Case

Police have arrested two men in Barcelona, Spain for their alleged role in financing ISIS terrorism by acquiring and selling blood antiquities.

Georgi Kantchev of The Wall Street Journal reported that "Spanish police are holding two men suspected of trading in antiquities looted by groups linked to Islamic State, the first publicly announced detentions by Western authorities working to dismantle the terrorist group’s trade in plundered art."

The Ministerio del Interior issued a statement explaining that the men, both Spanish nationals and antiquities experts, were detained on crimes of terrorist financing, belonging to a criminal organization, receiving stolen property, smuggling, and falsification of documents.

Video courtesy of Policia Nacional, Ministerio del Interior, Government of Spain.

"The detainees were part of a network based in Catalonia and international branches dedicated to the acquisition and sale of works of historical-archaeological value from territories that were under siege from groups related to the organization, DAESH," the ministry revealed. DAESH is the Arabic acronym for ISIS.

Authorities raided locations in Barcelona and Argentona, including a conservation laboratory, warehouse, and art gallery. Cultural heritage material seized included mosaics, sarcophagi and Egyptian artifacts. Some of the objects originated from the Libyan region of Cyrenaica, which ISIS controlled from 2011 through 2016.

"Since the end of 2014, the main detainee and expert in ancient art, had woven a network of suppliers around the world that allowed access to archaeological pieces of various civilizations," the ministry alleged, adding that officials first detected the operation in October 2016 after noticing improprieties in import records.

The interior ministry reported that some of the objects "showed imperfections, bumps and marks that indicated violent extraction of the subsoil, without the use of adequate archaeological techniques," pointing out that the suspects "were responsible for a restoration process that would erase these signs as far as possible."

Text and original photos copyrighted 2010-2018 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, museum risk management, and archaeology. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. The materials presented on this site are intended for informational purposes only and should not be used as legal advice applicable to the reader’s specific situation. In addition, the provision of this information to the reader in no way constitutes an attorney-client relationship.

Monday, March 5, 2018

How to Secure an Archaeological Site: ASIS Releases New Case Study on Clunia

https://www.asisonline.org/globalassets/foundation/documents/crisp-reports/archaeological-clunia_crisp-report.pdf
Click on the pic and read the ASIS CRISP Report.
Protecting heritage during times of war is a topic that receives significant attention. Just read about last October's Preserving Cultural Heritage in Times of Conflict conference at Colgate University, or Sam Hardy's recent article about "Curbing the Spoils of War," or Neil Brodie's and Isber Sabrine's new publication titled "The Illegal Excavation and Trade of Syrian Cultural Objects: A View from the Ground."

Make no mistake, this issue deserves a spotlight because violent conflict creates fresh opportunities to sharply increase the trafficking of cultural heritage objects ravaged from archaeological sites.

But what about protecting archaeological sites during times of peace? Filling the gap to tackle this important subject are ASIS Cultural Properties Council members and security experts James Clark, Ricardo Sanz Marcos, and Robert Carotenuto. Their peer-reviewed CRISP Report (Connecting Research In Security to Practice) on the Archaeological Site of Colonia Clunia Sulpicia presents a case study for a security plan in a non-conflict region. It should be required reading for all archaeologists, preservationists, security professionals, and others responsible for keeping cultural heritage locations secure.

A copy of the report is available on ASIS International's web site here.

The three authors--hailing from Clark Security Group, Proarpa (Protección de Activos y Patrimonio), and the New York Botanical Garden, respectively--investigated the challenges and pressures faced by a site located in Peñalba de Castro, Spain, describing Clunia as "the most representative of all of the archaeological ruins that have been found from the Roman period in the Northern Iberian Peninsula." It is home to a Roman forum, mosaics, statues, and an amphitheater.

The ASIS Cultural Properties Council team conducted their survey and risk assessment with critical help from local stakeholders. They examined "the culture of the site, the site’s vulnerability to looting and various natural and man-made hazards, the local legal requirements that impact the development of a security plan, [and] the available resources to support a new security plan."

Their conclusions and suggestions employ a broad-based and integrated security model whose features could apply (with site-specific refinements) to other archaeological sites around the globe.

Based on their review of the threats and vulnerabilities to Clunia, the authors recommended the following for Clunia:
[T]he security model must be holistic and maintain a primary mission of delay, deterrence, detection, and prevention of incursions onto the site. The first step is to get the community on board with a sense of ownership. The second step is to provide policies and practices that complement the technology in place and the presence of security officers. The next step is to provide the security officers with tools and technology that optimize their presence on-site and allow them to know when someone is attempting to access the site, either before or when it happens.
The authors' specific recommendations and the costs of investment and maintenance are outlined in the CRISP Report.

ASIS is a global association of 35,000 private security professionals, including those who work with cultural and religious institutions. CHL's author is a member of the Cultural Properties Council.

Text and original photos copyrighted 2010-2018 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, museum risk management, and archaeology. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited.

Thursday, February 22, 2018

Rubin v. Iran: Supreme Court Says Persepolis Collection Will Stay at the Oriental Institute

The University of Chicago no longer is in danger of losing ancient Iranian artifacts following Wednesday's United States Supreme Court decision in the case of Jenny Rubin, et al. v. Islamic Republic of Iran.

The university's Oriental Institute (OI) holds the "Persepolis Collection," which consists of approximately 30,000 archaeological artifacts on loan from the National Museum of Iran since 1937.

The cultural objects became the target of a civil suit after American terrorist victims tried to execute a multi-million dollar court judgment against Iran. When Iran failed to pay, the plaintiffs sought to execute their judgment by trying to acquire the Iranian artifacts at OI and others located at various cultural institutions throughout the United States.

The Persepolis Collection remained the last collection in dispute until this week's supreme court decision. Other court challenges surrounded cultural artifacts in the Chogha Mish Collection at OI--consisting of clay seal impressions excavated in the 1960's--and the Herzfeld Collection--consisting of 1200 artifacts originally purchased by The Field Museum in Chicago in 1945. These contests were resolved prior to the supreme court case. The high court noted, "The Chogha Mish Collection has been removed from the territorial jurisdiction of the federal courts, and the Court of Appeals for the Seventh Circuit determined that the Oriental Institute Collection and Herzfeld Collection are not property of Iran. See 830 F. 3d 470, 475–476 (2016). Petitioners do not challenge that decision here."

The plaintiffs/petitioners suffered from bomb attacks in Jerusalem in September 1997, carried out by the terror group Hamas. The victims sued Iran, designated by the U.S. as a state-sponsor of terrorism and a supporter of Hamas, in federal district court in Washington, DC, applying the Terrorism Risk Insurance Act of 2002 (TRIA). After Iran failed to appear at the courthouse, the judge in 2003 entered a default judgment, awarding the petitioners $71.5 million.

Usually a foreign government cannot be sued, but there are exceptions to the rule like 28 U.S.C. § 1605A of the federal Foreign Sovereign Immunity Act (FSIA), which allows a lawsuit against a designated state sponsor of terrorism such as Iran. The plaintiffs/petitioners sued Iran under an older version of this law, but in 2008 the DC federal district court converted the judgment against Iran to one that qualifies under § 1605A.

In addition, usually a foreign government's assets are immune from attachment or execution. To secure the money judgment that Iran refused to pay, the plaintiffs/petitioners argued that they could attach Iranian assets located in the U.S. under an exception to the rule, specifically 28 U.S.C. § 1610(g)(2), which permits a victorious litigant to take control of [a]ny property of a foreign state, or agency or instrumentality of a foreign state….” But in a unanimous 8-0 decision (Justice Elena Kegan did not take part in the case), the U.S. Supreme Court said the petitioners could not do this because § 1610(g) does not strip immunity from the Persepolis Collection, which is the property of a sovereign.

Justice Sotomayor, writing for the nation's highest court ruled, "Out of respect for the delicate balance that Congress struck in enacting the FSIA, we decline to read into the statute a blanket abrogation of attachment and execution immunity for [FSIA] §1605A judgment holders absent a clearer indication of Congress’ intent." The supreme court's opinion explained:
... The issue presented in this case is whether certain property of Iran, specifically, a collection of antiquities owned by Iran but in the possession of respondent University of Chicago, is subject to attachment and execution by petitioners in satisfaction of that judgment. Petitioners contend that the property is stripped of its immunity by another provision of the FSIA, §1610(g), which they maintain provides a blanket exception to the immunity typically afforded to the property of a foreign state where the party seeking to attach and execute holds a §1605A judgment. 
We disagree. Section 1610(g) serves to identify property that will be available for attachment and execution in satisfaction of a §1605A judgment, but it does not in itself divest property of immunity. Rather, the provision’s language “as provided in this section” shows that §1610(g) operates only when the property at issue is exempt from immunity as provided elsewhere in §1610. Petitioners cannot invoke §1610(g) to attach and execute against the antiquities at issue here, which petitioners have not established are exempt from immunity under any other provision in §1610. 
...
With respect to the immunity of property, the FSIA similarly provides as a default that “the property in the United States of a foreign state shall be immune from attachment arrest and execution.” §1609. But, again, there are exceptions, and §1610 outlines the circumstances under which property will not be immune. See §1610. For example, subsection (a) expressly provides that property “shall not be immune” from attachment and execution where, inter alia, it is “used for a commercial activity in the United States” and the “judgment relates to a claim for which the foreign state is not immune under section 1605A or section 1605(a)(7) (as such section was in effect on January 27, 2008), regardless of whether the property is or was involved with the act upon which the claim is based.” §1610(a)(7).
... 
Throughout the FSIA, special avenues of relief to victims of terrorism exist, even absent a nexus to commercial activity. Where the FSIA goes so far as to divest a foreign state or property of immunity in relation to terrorism-related judgments, however, it does so expressly. See §§1605A, 1610(a)(7), (b)(3), (f)(1)(A); §201(a) of the TRIA. Out of respect for the delicate balance that Congress struck in enacting the FSIA, we decline to read into the statute a blanket abrogation of attachment and execution immunity for §1605A judgment holders absent a clearer indication of Congress’ intent.
A chronicle of the lengthy history of Rubin v. Iran can be found here.

Text and original photos copyrighted 2010-2018 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, museum risk management, and archaeology. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited.

Thursday, February 15, 2018

[VIDEO] "Moxie" Sniffs Out the Scent of Antiquities

Moxie is one of the working dogs spearheading the K-9 Artifact Finders project. The program aims to equip customs officers with a new tool to nab heritage traffickers by finding target scents linked to illegally looted artifacts.


The research is sponsored by Red Arch Cultural Heritage Law & Policy Research.

Penn Vet Working Dog Center is conducting the study with the assistance of the Penn Museum and includes the following project experts:

Dr. Cynthia M. Otto, Principal Investigator
Executive Director of the Penn Vet Working Dog Center.

Attorney Ricardo "Rick" St. Hilaire, Project Creator and Co-Investigator
Founder and Executive Director of Red Arch Cultural Heritage Law & Policy Research

Dr. Michael Danti, Principal Consultant
Principal Investigator and Academic Director of ASOR Cultural Heritage Initiatives and a Penn Museum Consulting Scholar

Domenic DiGiovanni, Consultant
US Customs and Border Protection Officer (Ret.) and antiquities specialist, featured in the documentary The Real-Life Indiana Jones. Read his insights about K-9 A.F. here.

Peter Herdrich, Consultant
Chief Executive Officer at Cultural Capital Group, LLC

Dr. David "Lou" Ferland, Consultant
Executive Director of The United States Police Canine Association and retired police chief

Text and original photos copyrighted 2010-2018 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, museum risk management, and archaeology. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited.

Wednesday, December 13, 2017

Can Canines Sniff Out Smuggled Artifacts? Working Dogs Join Fight to Save Cultural Heritage

Red Arch Cultural Heritage Law & Policy Research and the University of Pennsylvania’s Penn Vet Working Dog Center, in collaboration with the Penn Museum (University of Pennsylvania Museum of Archaeology and Anthropology), have launched the K-9 Artifact Finders research program. The project aims to fight cultural heritage crime with the help of working dogs.

“We must stop the crime of transnational antiquities trafficking,” says CHL's Rick St. Hilaire, founder and executive director of Red Arch Research. “And dogs may be the right law enforcement partner to get the job done,” adds Dr. Lou Ferland, retired police chief and head of The United States Police Canine Association, who serves as an advisor to the K-9 Artifact Finders project.

Dr. Cynthia Otto is the executive director and principal researcher at Penn Vet’s Working Dog Center, an international leader in working dog research. Otto has trained many dogs for law enforcement, search and rescue, and medical detection. “The kind of canine training we will undertake for K-9 Artifact Finders is unprecedented. We think it is innovative and doable.”

Phase I of the study will focus dogs on sniffing for objects from the Fertile Crescent region of modern-day Iraq and Syria, a prime target for cultural heritage looting, in order to find specific target odors. Finding scents linked to illegally looted artifacts could equip customs officers with an advanced tool to help apprehend heritage traffickers and their smuggled cultural property packages at airports and cargo facilities. If successful, additional funding will be sought for on-the-ground testing (Phase II) and, later, for a demonstration program for customs officials in the United States and abroad (Phase III).

“Terrorists, organized crime, and common criminals are destroying archaeological sites on an industrial scale to cash-in on illegal profits,” warns archaeologist Dr. Michael Danti, a principal consultant. “That is why we need to find out if we can train dogs to help.” Danti, who received his PhD in Anthropology from the University of Pennsylvania in 2000, is a Penn Museum Consulting Scholar.

Retired Homeland Security customs officer Domenic DiGiovanni agrees. “Smugglers import stolen heritage into the U.S. by hiding them in packages and crates. Using canines to sniff out illegally dug-up artifacts would help customs officers quickly identify smuggling suspects, who usually falsify import forms when they traffic artifacts, which is a felony.”

Project consultant Peter Herdrich of Cultural Capital Group, LLC notes that this crime is big and spreading. “We now face the daunting task of unscrupulous dealers mailing more and smaller cultural artifacts into the country as a result of growing on-line antiquities and ancient coin sales.”

Find out more at www.redarchresearch.org/News-and-Media.html.

Text and original photos copyrighted 2010-2017 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, museum risk management, and archaeology. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. Visit www.redarchresearch.org.

Wednesday, December 6, 2017

Supreme Court Hears Rubin v. Iran. Feds Say Taking Cultural Property A "Big Deal." Petitioners Want Justice, Arguing "It's Not About Antiquities."

Can American victims of terrorism seize and sell ancient Persian antiquities located at the University of Chicago to satisfy a court judgment against Iran? That's the question the United States Supreme Court considered on Monday in the case of Rubin v. Islamic Republic of Iran, a case examining the mechanics of the Foreign Sovereign Immunities Act (FSIA).

Foreign countries generally are immune from lawsuits filed in American courts. But the FSIA outlines exceptions to this rule, including a terrorism exception codified at 28 U.S. Code § 1605A. Congress penned this section in 2008 to allow plaintiffs to sue designated state sponsors of terror that caused injury, harm, or death.

To satisfy a civil judgment won in a 1605A terrorism case, a victorious plaintiff would seek out the foreign nation's assets under § 1610(g)(2), which allows the plaintiff to take control of “[a]ny property of a foreign state, or agency or instrumentality of a foreign state….”

But are the assets that can be attached to execute the court judgment limited to those that are "used for a commercial activity" as specified by § 1610(a)? Or can the assets be any kind whatsoever, including antiquities housed at a museum? That was the topic of oral argument in the Rubin case.

Rubin pits American victims of a Jerusalem suicide bombing against the country of Iran, a country designated by the US government as a state-sponsor of terror.  Hamas claimed responsibility for the Iranian sponsored attack in 1997, and a federal district court in Washington, DC in 2003 awarded the plaintiffs $71.5 million in a default judgment, holding Iran culpable. Read about the lengthy and complex case history here.

Since then, the plaintiffs/petitioners have tried to secure their award through the attachment process by taking control of ancient Iranian artifacts located in a variety of American cultural institutions, including the Persepolis and Chogha Mish antiquities collections, excavated during the 1930's and 1960's and housed in the University of Chicago’s Oriental Institute through a long-term academic loan.

Attorney Asher Perlin, on behalf of the terror victims, told the supreme court justices that the plaintiffs/petitioners could attach and execute these artifacts without having to assess whether the property was part of the commercial activity of Iran, explaining:

ATTORNEY PERLIN: In 2008, Congress comprehensively overhauled the terrorism exception to foreign sovereign immunity to close gaps that had for years allowed foreign terrorist states to thumb their noses at U.S. judgments finding them liable for acts of terrorism while their victims were drawn into a long, bitter, and often futile search for scarce assets that would be subject to execution under the exceedingly narrow commercial exception to foreign sovereign immunity.

The centerpiece of that legislation is Section 1610(g). That provision provides that American terrorism victims can execute their judgments upon the property of a foreign state that is subject -- against which a -- a judgment has been entered under 1605A, and it makes available the property of the state's agencies and instrumentalities.

JUSTICE STEPHEN BREYER: Can they execute, your clients, on the embassy?
...

ATTORNEY PERLIN: They cannot.

JUSTICE BREYER: Why not?

ATTORNEY PERLIN: Subsection -- Section 1609 says that Section 1610 -- execution under 1610 is subject to international agreements like the Vienna Convention which would protect diplomatic property, and Section 1611 protects military assets, certain central bank assets.

JUSTICE BREYER: Okay.

ATTORNEY PERLIN: Congress, when they enacted 1610(g), they did not completely abrogate foreign sovereign immunity for terrorist states. They wanted to provide a remedy for the victims, they wanted to punish and deter the terrorist states, but at the same time, Congress recognized that Iran and North Korea, Syria, Sudan, these are sovereign states, and they're entitled to a bare minimum of sovereign immunity, and Congress retained that bare minimum by protecting quintessentially sovereign assets while making everything else subject to execution.
...

The provisions that allow execution upon the property of an agency or instrumentality gives access to -- to the agency or instrumentality's property.

JUSTICE BREYER: Well, give an example. I mean, there's a famous example which you know about, the -- the letter of Cyrus, saying to everybody throughout the Middle East that the Jews are free and they can go back to Israel, Palestine, the temple, and that letter exists and Persia -- the Persian letter, and Iran has sent it around the world.

Now, in your view, they have -- and people have looked at it. And if it comes to the United States, you can seize it. Is that -- that's your view of it? Because if it is, of course, if Congress knew about it, then they -- they might have had a general idea, given the nature of the stuff in Chicago. I -- I would be surprised that they'd want to do that.

ATTORNEY PERLIN: You might be surprised, but Congress has addressed -

JUSTICE BREYER: Your view is, yes, you could seize it?

ATTORNEY PERLIN: It would depend on - yes, you could. It -- Congress has addressed this very question, twice, in 22 U.S.C. 2459 [the Immunity from Judicial Seizure Act], Congress provided a very specific and limited immunity for culturally significant objects being brought to the United -- culturally significant objects being brought to the United States for display or exhibition.

There was a very specific immunity there that the -- that somebody wants to bring in -- in that property, those exhibits can apply to the State Department in advance and receive a letter immunizing those -- those assets from -- from judicial process.
...

JUSTICE RUTH BADER GINSBURG: Did that -- did that exist in, what was it, 1939 -

ATTORNEY PERLIN: It did not. It did not.

JUSTICE GINSBURG: -- when Chicago got this?

ATTORNEY PERLIN: But Congress could have made that provision retroactive, and it didn't.
...

JUSTICE GINSBURG: The University is not interested in this property for the money -- for money. It's interested in having these antiquities on display, to be researched, to be seen?

ATTORNEY PERLIN: But it doesn't belong to them. It's not theirs. And whoever it belongs to can decide whether they're the best university to study it.
...

JUSTICE GINSBURG: But what would [the property rights of the University of Chicago] be? Their rights have been from 1939 on, they have this property.

ATTORNEY PERLIN: Well, since 1980, they've had the property because Iran couldn't get it back, for a big part of that time, and for a big part of the time before that, every now and then, Iran was asking, when are you going to finish -- when are you going to finish studying these things. And -- and they were not very forthcoming.

When this lawsuit was filed, they moved into -- they expedited their study of the assets because they realized that they might lose them. And, now, again, University of Chicago is really an amicus here. They don't -- they have no interest in these assets.

They -- and to the extent that they do, the Court can protect that. It can protect that interest in a -- in a sale.
...

CHIEF JUSTICE JOHN ROBERTS: Well, assuming you're right, does that mean, if you lose here, you think Iran will be able to repatriate the assets?

ATTORNEY PERLIN: Absolutely. There's nothing in their way. They did. They did. We lost -- we lost in the district court, and there was another collection of Iran - Iran-owned assets, and on the eve of the -- the argument in the court of appeals, they were shipped back to Iran after the court had denied our -- our motion to stay, but -- but they were shipped back to Iran.
...

JUSTICE BREYER: They have other things in the United States. I mean, it seems to me so far, that the main difference between your interpretation and the other side as a practical matter is that, if you're right, that private people will be able to take cultural assets from Persia and sell them and ship them back to Iran, and if they're right, you will have to limit your recovery to commercial objects ....
...

ATTORNEY PERLIN: ... My clients have been waiting 20 years to enforce their judgment against Iran. Iran does not pay judgments.
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Congress said enough is enough. We want these judgments enforced. And it's not about antiquities. That's -- that's -- that's what the Respondents are writing about....

Following Attorney Perlin's colloquy with the court, Attorney David Strauss, on behalf of the respondent University of Chicago, said that the property of a foreign nation had to be used for a commercial activity in order for the plaintiffs/petitioners to get it:

ATTORNEY STRAUSS: The Foreign Sovereign Immunities Act says, in Section 1609, that the property of foreign states in the US shall be immune from attachment, except as provided in 1610.

Then the subsections of 1610 say, in terms, one after another, that certain property shall not be immune. Subsection (a) says that, as does (b), as does (d), as does (e). Subsection (g) contains no such language. The relevant part of subsection (g) does not refer to immunity at all.
...

The Petitioners' position really would nullify a decision Congress made at the very same time it enacted 1610(g) in 2008. ... The -- the statute that added subsection (g) also created 1605, the cause of action that -- the remedy the Petitioners invoke. That statute then amended the FSIA to say that parties like Petitioners, who are seeking to execute a 1605A judgment, must show that the property they want to seize is used for commercial activity of the United States. That same statute said that. It said that by inserting 1605A into subsection A, which is a subsection that requires commercial activity. So Congress did that. It created 1605 - 1605A.

Representing the United States government, and awkwardly supporting Iran’s position in this unusual case, was Assistant to the Solicitor General Zachary Tripp. Attorney Tripp firmly declared America's opposition to terrorism and condemned Iran’s sponsorship of violence, but he made clear that the federal government is just as concerned with how American property overseas is treated. He told the court:

ATTORNEY TRIPP: These ancient Persian artifacts are immune from execution under 1609, and nothing in 1610(g) lifts that immunity....

And then the last thing I'd just like to mention here is about the United States' competing interests in this case. I mean, obviously, we have a very strong interest in combatting state-sponsored terrorism. We also have concerns in these cases about the reciprocal -- reciprocal treatment of our own property abroad. And I think, particularly in light of those concerns which are quite weighty, if Congress was really going to take the step of allowing execution against property of a cultural and historic significance to another country and its people, that would be a big deal and it would not be the kind of thing you would expect to see buried in a conforming amendment without remark.

Photo credit: David Lat / freeimages.com

Text and original photos copyrighted 2010-2017 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, museum risk management, and archaeology. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission without the express written consent of CHL is strictly prohibited. Visit www.redarchresearch.org.