Page:2020-07-29 PSI Staff Report - The Art Industry and U.S. Policies that Undermine Sanctions.pdf/36

 B. The Art Market

This section describes the global and U.S. art industry; the U.S. art industry's current exemption from legal safeguards aimed at stopping money laundering and corruption; and the role of shell companies in purchasing high-value art.

The modern global art market—and its U.S. component—has been enjoying a boom. However, critics assert the secrecy found in the art market attracts illicit activity and suspect funds. In 2019, global art sales reached $64.1 billion. In addition, the art market has become a source of reliable return on investment. One report found that since 2000, art has delivered average annual returns of 8.9 percent. In 2019, 86 percent of surveyed wealth managers asserted that "they thought there was a convincing argument for including art in their wealth management service offering." Investors also purchase art to diversify portfolios, and some view individual pieces as financial instruments to be traded like stock. Over the last several years, growth was most pronounced at the top end of the market, with works priced above $10 million outperforming other parts of the market.

The art market is also now more accessible due to globalization and the internet. These two factors have transformed the art market into an international industry with a customer base located around the world. The