Crime in Art Law: Digitalisation, Trafficking and Destruction

What new challenges does the art world face amid rising digitalisation and continuing global conflict? Below, Professor Felicity Gerry KC & Fahrid Chishty take a close look at these developments and their impact on cultural heritage.

As modern criminal lawyers, we have found that the art and antiquities trade deserves close attention. This multi-billion-dollar market increasingly gives rise to questions of criminal law. For instance, how should domestic laws combat art fraud carried out on cryptocurrency platforms? How are private collectors to guard against purchasing ‘blood antiquities’ linked to transnational organised crime? And how does the international community respond to the destruction of cultural heritage in conflict zones?

According to studies, the annual transaction volume in art and antiquities is approximately $60 billion. During the COVID-19 pandemic, the contemporary art market proved remarkably resilient and witnessed an appreciation in the region of 15.1%. Post-pandemic, the art market continues to boom, with projections pointing towards more economic growth in the wings.

The imperviousness of the art market to economic decline may owe to the proliferation of online auctions in recent years, which not only served as a saving grace during the height of lockdowns, but also established a long-term infrastructure for executing and expediting end-to-end transactions between art houses and purchasers. For buyers and sellers, these are welcome developments. But art market participants would do well to keep an eye of the novel challenges looming on the horizon.

In terms of digitisation, the focus falls inevitably on the digital marketplace. A significant inflection point for the global economy, the digital marketplace has revolutionised our commercial practices. It has provided new platforms for transacting, which have expanded and accelerated business operations internationally. But its advent has also initiated strict controls at the domestic level, which often take the form of complex legal and regulatory regimes targeting a triad of evils: money laundering, terrorism financing and antiquities trafficking. Whilst necessary, these legal frameworks impose stringent duties on art market participants, which can create obstacles in terms of compliance, due diligence and risk management.

Art market participants would do well to keep an eye of the novel challenges looming on the horizon.

In much the same vein, the entry of cryptocurrencies and non-fungible tokens (NFTs) into mainstream economy has reconfigured traditional approaches to law and dispute resolution in the art market. It has blurred the contours of contract and fraud law, allowing their substantive provisions to bleed into one another. For instance, we are seeing litigation play out in which digital assets are increasingly implicated in disputes relating to fraudulent misrepresentation vis-à-vis the provision of services. Evidently, cases of this nature require holistic, sophisticated solutions that draw on expertise in the criminal law in addition to traditional commercial principles.

On the international stage, the nexus between organised crime and the trafficking of cultural property is becoming increasingly visible. Over the past decade, terrorism networks have carried out acts of mass pillage at cultural heritage sites across the Middle East and South-Central Asia. Very often, the looted assets have been commodified and smuggled into western art markets with the assistance of collaborators in various jurisdictions.

For example, during Daesh’s occupation of large swathes of Iraq and Syria in 2014-19 countless Assyrian, Mesopotamian and Graeco-Roman artworks were reported to have been trafficked nautically into Europe. More recently, Taliban rule in Afghanistan has seen a rise in the illicit export of Hellenic and Buddhist statues across the porous border into Pakistan, and from there into the Middle East, Europe, and the US, where they sell for millions often under the auspices of reputable institutions. As such, there is a real risk that cultural assets from the MENA and South-Central Asia region have passed through criminal hands in transit to western art markets and are connected to terror financing and even narcotics and firearms trafficking.

The nexus between terrorism, transnational organised crime and the arts is inextricably bound to policy positions assumed by both governments and non-state actors. This brings to the fore the realisation that illicit trafficking experience ebbs and flows, corresponding with the policies on cultural heritage protection and export controls enacted in each jurisdiction. In regions where regimes with militant or iconoclastic ideologies prevail, the risk of trafficking and destruction of cultural heritage remains at its highest.

On the international stage, the nexus between organised crime and the trafficking of cultural property is becoming increasingly visible.

Against this landscape, criminal law has a critical role to play in developing protocols for the prevention of trade in blood antiquities. In much the same vein, private collectors need to monitor compliance with domestic legal frameworks when purchasing cultural assets whose provenance is tied to conflict zones or high-risk jurisdictions, the trade in which can come with significant criminal sanctions and financial confiscation.

Internationally, again there is an interaction between law and art. Treaties and legal instruments prohibit the destruction of cultural heritage and impose duties on contracting states to positively protect these sites. Consider, for instance, the Hague Convention for the Protection of Cultural Property in the Event of Armed Conflict 1954, which imposes safeguarding duties on States Parties amid military hostilities. Meanwhile, International Criminal Law has complemented these protective measures with a penal regime. The Rome Statute 1998 makes plain that the destruction of cultural heritage may constitute war crimes in particular circumstances involving attacks on historic monuments and buildings dedicated to religion, education, art, science, or charitable purposes where they are not military objectives. Attacks directed at civilian objects and the act of pillaging, respectively are also proscribed.

Against this backdrop, it is pertinent to reflect on the situation in Ukraine. Since February 2022, Ukrainian authorities have repeatedly reported that Russian forces have deliberately destroyed cultural heritage sites and looted ancient antiquities from its museums. If the preliminary evidential picture is inculpatory, foreshadowing criminal charges, the testing of this will increase the international jurisprudence on cultural heritage crimes and should cause collectors to increase wariness over objects for sale.

The world of art and antiquities is rife with criminal law issues in 2023. Advancements in the digital marketplace have given rise to unprecedented opportunities and novel challenges for buyers, sellers and domestic governments in kind. Meanwhile, terrorism, black markets and war have opened new vectors for the illicit transmission and trafficking of artefacts and cultural goods. Afghanistan and Ukraine are hotspots of risk where cultural heritage is in danger of destruction, deconstruction or pillage and we anticipate a greater need for criminal law advice for collectors in this specialist area.

Professor Felicity Gerry, Barrister

Fahrid Chishty, Advocate

Libertas Chambers

20 Old Bailey, London, EC4M 7AN, UK

Tel: +44 07956 853737

E: fgerryqc@libertaschambers.com

Professor Felicity Gerry KC is an international KC at Libertas Chambers, London and Crockett Chambers, Melbourne, largely defending in serious and complex criminal trials and appeals, often with an international element. She is a high-profile barrister who is regularly sought out by broadcasters for media commentary upon international legal issues, especially related to international crimes, terrorism and homicide and corporate responsibility for human rights abuses.

Fahrid Chishty is an advocate with Libertas Chambers and practices across its core specialisations, with particular focus on serious and organized crime, fraud and financial crime and public international law. Beyond his Court practice, Fahrid has also developed an extensive advisory practice and has been instructed by business magnates, politicians and members of foreign royalty.

Libertas Chambers are specialists in business crime, professional discipline and asset recovery. Its team offers a range of expertise across a national presence. Libertas Chambers emphasises its modern approach to legal services, utilising new technology and a streamlined business model to assist major corporates, financial institutions and individual clients in complex cases.