United States: Fine Arts Insurers Can Combat Terrorists' Plundering For Profit

Last Updated: September 11 2017
Article by Owen B. Carragher Jr, and Tony Baumgartner

Among the many horrors perpetrated by terrorists around the world are plundering for profit and illicit trading in looted antiquities. During a recent seminar hosted by the Clyde & Co fine arts team, two guest experts shared their experience in helping to protect cultural heritage in Middle Eastern conflict zones.

The so-called Islamic State of Iraq and Syria (ISIS) is one of the terrorist organizations identified as systematically stealing antiquities and selling them illegally to fund its activities. ISIS has overseen the widespread looting of six UNESCO World Heritage sites in Syria since 2014, according to Amr Al Azm, associate professor of history and anthropology at Shawnee State University in Portsmouth, Ohio. Al Azm is outspoken in calling attention to ISIS' atrocities and its agenda of severing Syria's cultural connections to its past. In 2015, ISIS destroyed the ancient Roman ruins in the Syrian city of Palmyra.

Destruction of cultural treasures is only part of ISIS' sinister plan, however. The G7 (Canada, France, Germany, Italy, Japan, the United States and the United Kingdom) estimates that ISIS has raised tens of millions of dollars from looted Syrian antiquities.

Speaking together at the seminar, Matthew Bogdanos, an assistant district attorney in New York and colonel in the United States Marine Corps Reserves, and Al Azm emphasized that the insurance industry can play a significant role in deterring this illicit trade and helping to identify stolen goods.

Colonel Bogdanos, who became a prosecutor in 1988 after serving in the Marines, returned to active duty after the Sept. 11, 2001, terrorist attacks. He was stationed with an inter-agency task force in Iraq and Afghanistan and oversaw the investigation into the looting of the Iraq National Museum in Baghdad. He said plundered antiquities tend to take a well-used path from theft to sale on the international market. To aid in their authentication, some items may take many years to come into the market. In addition, other items are cut into pieces, in a manner that retains value but enables them to be smuggled separately and perhaps be less recognizable to inspectors. The pieces can then be reunited over time and the item "restored" and sold anew, often years after the initial looting.

Spotting red flags

Dealers, auction houses and collectors, together with the insurance industry, each have a role to play in identifying looted antiquities and helping to prevent their ongoing sale, Al Azm and Bogdanos said. Due diligence red flag indicators that should trigger suspicion include:

  • Does the piece have a documented provenance? If not, is there any other way to establish its history? For example, is there an historical photograph of the piece? How old is the photo? Is it digital? As a rule, the higher the item's value, the more likely it is to have been photographed during its collection life. If the earliest photo is relatively new, this is a potential red flag.
  • Is its provenance documentation pre-1970? If yes, check the documentation thoroughly for authenticity. Prior to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property, there was no set of uniform international rules dealing with the recovery and return of illegally exported or stolen cultural property. Documented provenance post-1970 is more likely.
  • Has it crossed any international borders? Lawfully exported valuable antiquities cannot simply appear in another country; they must have proper customs declarations and possibly export permits to cross borders legally.
  • Has the piece been insured before? If yes, where is the paperwork?
  • How did the present owner come to possess it? Has it been named in a catalog and its provenance documented, and is the provenance plausible? For example, something catalogued as "From a 19th century French collection" is unlikely to provide proper provenance on its own.
  • What is the item's condition? If a statue has cuts below the shoulders and hips, or has nicks consistent with a power tool, there's a good chance it's stolen.
  • What's the item's country of origin and the date it appeared on the market? If these correspond with wars or conflicts, there's a good chance the item was looted.

In addition to these potential red flags, items should be checked under an ultraviolet light. Increasingly, a traceable liquid, known as "SmartWater" but unrelated to the beverage brand owned by the Coca-Cola Company, is being used to mark and track antiquities. SmartWater marks items with a green dye that is visible only under UV light. Dealers, auction houses and collectors should also be aware of patrimony dates for individual countries through the patrimony law listed on the UNESCO website, as any antiquities appearing on the market after these dates should trigger suspicion and warrant detailed provenance checking.

Insurers also have a part to play in checking that their insureds have sufficient and documented due diligence procedures before coverage is in place. Apart from the moral obligation to try to end illicit trafficking of antiquities, insurers and others may well also have a legal obligation to report suspected looting under the UK Proceeds of Crime Act 2002. Awareness and prompt action by insurers and others that touch the global fine arts market can reduce the risk of loss of cultural heritage.

Fine Arts Insurers Can Combat Terrorists' Plundering For Profit

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