Art gallerists in Mexico are blaming slow business on an anti–money laundering law targeting drug lords, reports the Washington Post. Among them, dealer Guillermo Zajarias described the Mexican art market as “totally frozen,” claiming that sales at his gallery in Lomas de Chapultepec have fallen by 30% since the law passed in 2012. “This is fiscal terrorism, and it is not fair,” he said. His sentiments were echoed by several other gallerists.
The legislation they oppose is meant to target the informal economy in which drug lords easily empty their bulging pockets. Purchases of luxury items greater than $15,510 can no longer be completed in cash. That includes things like jewelry, yachts, armored vehicles, and — yes — artwork. Large sales must also be reported to the Mexican Ministry of Finance.
But some gallerists think art’s inclusion among such flashy items is unfair. Gallery owner Oscar Román pointed to drug houses shown on TV after their occupants have been arrested. “[They] have posters on the wall. You don’t see a single piece of art,” he said.
Whether or not narcos appreciate art may be beside the point. Criminals around the world have repeatedly found a safe haven in the unregulated art market, where million-dollar transactions are everyday affairs. In Brazil, for example, banker Edemar Cid Ferreira turned his illegal billions into a 12,000-piece-strong art collection. In Hong Kong, the wealthy are frequently known to purchase artworks at inflated prices outside the country and have the balance deposited quietly into an offshore account. Speaking to Periódico AM about Mexico’s law, art dealer Luis García Jasso even admitted that the art trade is where money laundering can most easily occur.
Why wouldn’t the cartels take advantage of it? They’re already active in the real estate, food, and fashion industries. According to the International Business Times, the Mexican Ministry of Finance estimates criminals launder $10 billion every year, while the US-based independent consultancy Strafor believes the true number could be up to $39 billion. The anti–money laundering law is one of the Mexican government’s first attempts to attack the cartel’s finances since it declared war in December 2006. Since then, more than 70,000 people have been killed. Amid such high stakes, should the art market really get a pass?