[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
THE EXPLOITATION OF CULTURAL
PROPERTY: EXAMINING ILLICIT
ACTIVITY IN THE ANTIQUITIES
AND ART TRADE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON TERRORISM
AND ILLICIT FINANCE
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
JUNE 23, 2017
__________
Printed for the use of the Committee on Financial Services
Serial No. 115-23
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HOUSE COMMITTEE ON FINANCIAL SERVICES
JEB HENSARLING, Texas, Chairman
PATRICK T. McHENRY, North Carolina, MAXINE WATERS, California, Ranking
Vice Chairman Member
PETER T. KING, New York CAROLYN B. MALONEY, New York
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma BRAD SHERMAN, California
STEVAN PEARCE, New Mexico GREGORY W. MEEKS, New York
BILL POSEY, Florida MICHAEL E. CAPUANO, Massachusetts
BLAINE LUETKEMEYER, Missouri WM. LACY CLAY, Missouri
BILL HUIZENGA, Michigan STEPHEN F. LYNCH, Massachusetts
SEAN P. DUFFY, Wisconsin DAVID SCOTT, Georgia
STEVE STIVERS, Ohio AL GREEN, Texas
RANDY HULTGREN, Illinois EMANUEL CLEAVER, Missouri
DENNIS A. ROSS, Florida GWEN MOORE, Wisconsin
ROBERT PITTENGER, North Carolina KEITH ELLISON, Minnesota
ANN WAGNER, Missouri ED PERLMUTTER, Colorado
ANDY BARR, Kentucky JAMES A. HIMES, Connecticut
KEITH J. ROTHFUS, Pennsylvania BILL FOSTER, Illinois
LUKE MESSER, Indiana DANIEL T. KILDEE, Michigan
SCOTT TIPTON, Colorado JOHN K. DELANEY, Maryland
ROGER WILLIAMS, Texas KYRSTEN SINEMA, Arizona
BRUCE POLIQUIN, Maine JOYCE BEATTY, Ohio
MIA LOVE, Utah DENNY HECK, Washington
FRENCH HILL, Arkansas JUAN VARGAS, California
TOM EMMER, Minnesota JOSH GOTTHEIMER, New Jersey
LEE M. ZELDIN, New York VICENTE GONZALEZ, Texas
DAVID A. TROTT, Michigan CHARLIE CRIST, Florida
BARRY LOUDERMILK, Georgia RUBEN KIHUEN, Nevada
ALEXANDER X. MOONEY, West Virginia
THOMAS MacARTHUR, New Jersey
WARREN DAVIDSON, Ohio
TED BUDD, North Carolina
DAVID KUSTOFF, Tennessee
CLAUDIA TENNEY, New York
TREY HOLLINGSWORTH, Indiana
Kirsten Sutton Mork, Staff Director
Subcommittee on Terrorism and Illicit Finance
STEVAN PEARCE, New Mexico Chairman
ROBERT PITTENGER, North Carolina, ED PERLMUTTER, Colorado, Ranking
Vice Chairman Member
KEITH J. ROTHFUS, Pennsylvania CAROLYN B. MALONEY, New York
LUKE MESSER, Indiana JAMES A. HIMES, Connecticut
SCOTT TIPTON, Colorado BILL FOSTER, Illinois
ROGER WILLIAMS, Texas DANIEL T. KILDEE, Michigan
BRUCE POLIQUIN, Maine JOHN K. DELANEY, Maryland
MIA LOVE, Utah KYRSTEN SINEMA, Arizona
FRENCH HILL, Arkansas JUAN VARGAS, California
TOM EMMER, Minnesota JOSH GOTTHEIMER, New Jersey
LEE M. ZELDIN, New York RUBEN KIHUEN, Nevada
WARREN DAVIDSON, Ohio STEPHEN F. LYNCH, Massachusetts
TED BUDD, North Carolina
DAVID KUSTOFF, Tennessee
C O N T E N T S
----------
Page
Hearing held on:
June 23, 2017................................................ 1
Appendix:
June 23, 2017................................................ 23
WITNESSES
Friday, June 23, 2017
Daniels, Brian I., Research Associate, Smithsonian Institution... 5
Grunder, Alyson, Deputy Assistant Secretary for Policy, Bureau of
Educational and Cultural Affairs, U.S. Department of State..... 3
Villanueva, Raymond, Assistant Director for International
Operations, U.S. Immigration and Customs Enforcement, Homeland
Security Investigations, U.S. Department of Homeland Security.. 7
APPENDIX
Prepared statements:
Daniels, Brian I............................................. 24
Grunder, Alyson.............................................. 28
Villanueva, Raymond.......................................... 39
THE EXPLOITATION OF CULTURAL
PROPERTY: EXAMINING ILLICIT
ACTIVITY IN THE ANTIQUITIES
AND ART TRADE
----------
Friday, June 23, 2017
U.S. House of Representatives,
Subcommittee on Terrorism
and Illicit Finance,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 9:15 a.m., in
room 2128, Rayburn House Office Building, Hon. Stevan Pearce
[chairman of the subcommittee] presiding.
Members present: Representatives Pearce, Pittenger,
Rothfus, Messer, Tipton, Poliquin, Hill, Emmer, Zeldin,
Davidson; Perlmutter, Maloney, Himes, Foster, Kildee, Sinema,
Vargas, Gottheimer, and Kihuen.
Also present: Representative Royce.
Chairman Pearce. The Subcommittee on Terrorism and Illicit
Finance will come to order.
Without objection, the Chair is authorized to declare a
recess of the subcommittee at any time. Also, without
objection, members of the full Financial Services Committee who
are not members of the Subcommittee on Terrorism and Illicit
Finance may participate in today's hearing.
Today's hearing is entitled, ``The Exploitation of Cultural
Property: Examining Illicit Activity in the Antiquities and Art
Trade.''
I now recognize myself for 2 minutes to give an opening
statement.
Most of the statement is going to be simply presented into
the record, but just to talk about the nature of the sale of
historical artifacts, archaeological artifacts--the ISIS groups
are now destroying entire cultural properties and putting them
on the market for sale. Many times, the money goes into
terrorism. That is what we are here to discuss today. The rest
of my statement will be just printed into the record.
I now yield 2 minutes to the gentleman from Colorado, Mr.
Perlmutter.
Mr. Perlmutter. Thanks, Mr. Chairman.
History has shown that art and cultural antiquities have
always been trafficked due to their value. Trafficked.
Trafficked. Sorry. Trafficked. Due to their value. Sorry about
that. I am going to start over.
Is that okay, Mr. Chairman? Can I start that over?
Chairman Pearce. I will yield you an additional 5 minutes.
It looks like you are going to take them.
Mr. Perlmutter. In fact, I am on TV.
History has shown that art and cultural antiquities have
always been trafficked due to their value. The Nazis famously
stole countless works of art during World War II, which will
never fully be recovered. We know that war and chaos create
instability and an environment where cultural heritage sites
and antiquities are easily pillaged.
According to INTERPOL, the black market in works of art is
becoming as lucrative as those for drugs, weapons, and
counterfeit goods. Evidence suggests some 50,000 to 100,000
works of art are stolen each year worldwide. Not surprisingly,
only about 10 percent of stolen art is recovered, and
successful prosecution occurs even less frequently. We must
give credit to U.S. law enforcement agencies which, from all
accounts, appear to be working collaboratively with each other
as well as international bodies in the private sector to
address this problem.
I would hope that the U.S. Government continues to make the
prevention of illegal trafficking of art a priority and
encourages strong interagency efforts. Some of the questions I
hope we can answer today are: How can we better regulate
marketplaces where these valuable pieces of art are exchanged?
Who are the buyers of stolen art, and how can we track them
better? What steps can be taken to better safeguard works of
art and vulnerable cultural sites? And how are funds related to
these antiquities being used to underwrite terrorist
organizations?
I look forward to learning more from our witnesses, and I
yield back, Mr. Chairman.
Chairman Pearce. The Chair yields 1 minute to the gentleman
from North Carolina, Mr. Pittenger.
Mr. Pittenger. Mr. Chairman, and Mr. Ranking Member, thank
you for hosting this important hearing today relative to the
illicit antiquities trade and how it funds terror.
As you know, last year the Task Force to Investigate
Terrorism Financing held a similar hearing on this matter. And
I am pleased that our new subcommittee is continuing our work
on this issue.
The United States Government must posture strongly against
any and all financing methods for ISIS. Antiquities trafficking
is no exception. Not only does this practice provide ISIS with
a steady stream of material support, but it also devastates
priceless historical locations throughout Iraq and Syria. We
must create an enforcement and an investigative structure that
fits to the antiquities industry and that is strong enough to
impact ISIS resourcing.
Mr. Chairman, I look forward to working with you and your
staff to promote an effective sanctions policy that puts an end
to ISIS and its usage of antiquities trafficking to fund
terror.
I yield back.
Chairman Pearce. The gentleman's time has expired.
Today, we welcome the testimony of our witnesses. First, we
have Ms. Alyson Grunder. Ms. Grunder is the Deputy Assistant
Secretary for Policy in the Bureau of Educational and Cultural
Affairs at the U.S. Department of State. Ms. Grunder is a
veteran foreign service officer with 26 years of experience in
policy formulation and advancement through bilateral and
multilateral engagement, international program development and
management grants, and budget oversight and evaluation
performance measures. From 2014 to 2015, Ms. Grunder served as
Minister Counselor for Public Affairs at the U.S. Embassy in
Baghdad, leading the mission strategic communications in public
diplomacy outreach efforts in the wake of the 2014 incursions
of ISIS into Iraq and Syria.
Dr. Brian Daniels is a Research Associate at the
Smithsonian Institution, where he pursues his scholarly work
about cultural property protection, the antiquities trade, and
the intentional destruction of cultural and religious sites
during conflict. Dr. Daniels is also the Director of Research
and Programs for the Penn Cultural Heritage Center at the
University of Pennsylvania Museum. Also, he is concerned with
the preservation of indigenous heritage, and has worked for
over 18 years with Native American communities in the United
States on issues related to political sovereignty, cultural
repatriation, and heritage preservation. Dr. Daniels holds a
Ph.D. in anthropology and history from the University of
Pennsylvania; an M.A. in history from the University of
Pennsylvania; and a B.A. and an M.A. in anthropology from San
Francisco State University.
Mr. Raymond Villanueva is the Assistant Director for
International Operations, U.S. Immigration and Customs
Enforcement, Homeland Security Investigations, U.S. Department
of Homeland Security. He is responsible for a budget of more
than $160 million and the operation and oversight of 62 offices
in 46 countries, 8 Department of Defense liaison offices with
over 400 personnel. Mr. Villanueva has served in numerous key
positions, including group supervisor for the Financial Crimes
and Asset Forfeiture and Removal Group in Buffalo, New York;
section chief for the Illicit Finance and Proceeds of Crime
Unit in Washington, D.C.; unit chief for the Trade Transparency
Unit in Washington, D.C.; assistant special counsel agent in
charge for the San Juan office; and most recently, deputy
assistant director for HSI International Operations.
Each of you is going to be recognized for 5 minutes to give
an oral presentation of your testimony. And without objection,
each of your written statements will be made a part of the
record.
Ms. Grunder, you are now recognized for 5 minutes.
STATEMENT OF ALYSON GRUNDER, DEPUTY ASSISTANT SECRETARY FOR
POLICY, BUREAU OF EDUCATIONAL AND CULTURAL AFFAIRS, U.S.
DEPARTMENT OF STATE
Ms. Grunder. Thank you, Chairman Pearce, Ranking Member
Perlmutter, and members of the Subcommittee on Terrorism and
Illicit Finance, for inviting me and my colleagues from DHS and
the Smithsonian to testify this morning on the topic of illicit
trade in cultural property by terrorists and criminal groups.
Earlier, I submitted detailed written testimony on the
State Department's efforts over decades to reduce the pillage
and trafficking of cultural property. This work is mandated by
multiple U.S. laws and U.N. conventions related to cultural
property protection.
The Bureau of Educational and Cultural Affairs, or ECA, has
the lead on cultural heritage protection and preservation for
the State Department through its Cultural Heritage Center.
The 1983 Convention on Cultural Property Implementation
Act, or CPIA for short, implements obligations of the United
States under the 1970 UNESCO Convention on the means of
prohibiting and preventing the illicit import, export, and
transfer of ownership of cultural property. The CPIA provides a
general legal framework by which the United States Government
can combat pillage and trafficking of cultural property through
bilateral agreements. These agreements or memoranda of
understanding impose import restrictions on certain categories
of archaeological and ethnological material determined to be in
jeopardy of pillage.
Import restrictions are intended to reduce incentives for
looting and trafficking by keeping looted material out of the
U.S. art and antiquities market, which is the world's largest.
To date, pursuant to the CPIA, we have concluded bilateral
agreements with 16 countries and implemented import
restrictions on an emergency basis, pursuant to legislation
enacted by Congress in 2004 and 2016, respectively, for Iraq
and Syria.
In addition to negotiating bilateral agreements to protect
cultural property, the State Department serves a coordinating
role for the interagency. We convene the Cultural Heritage
Coordinating Committee, or CHCC, consistent with the sense of
Congress in the 2016 Protect and Preserve International
Cultural Property Act and chaired by the ECA assistant
secretary. The CHCC includes senior representatives from the
Departments of Homeland Security, Interior, Defense, and
Justice, including the FBI, as well as the Smithsonian
Institution.
ECA also chairs the Cultural Antiquities Task Force, or
CATF, established by the Department in 2004 at the direction of
Congress, and now a working group of the CHCC. Originally
charged with responding to looting in Iraq and Afghanistan, its
mandate has been expanded to combat antiquities traffic and
looting of archaeological sites around the world by identifying
and supporting effective law enforcement, as well as diplomatic
and training programs.
CATF concluded its most recent program, a training for 25
Customs and Border Patrol and Immigration and Customs
Enforcement agents in April of this year, which included a full
day at the Smithsonian's Museum Conservation Institute, where
these agents had hands-on exposure to the cultural property and
artifacts that are typically trafficked.
With our interagency colleagues, the State Department has
also been active in international fora on cultural heritage
matters. March was a banner month for cultural heritage
protection with the unanimous adoption and U.S. cosponsorship
of U.N. Security Council Resolution 2347, the first Security
Council resolution devoted to cultural heritage protection in
conflict situations.
In addition, Acting Under Secretary for Public Diplomacy
and Public Affairs Bruce Wharton led the U.S. delegation to the
first G7 Cultural Ministerial in Florence, Italy, which was an
important meeting of significant market countries at which
cooperation on cultural heritage preservation was a primary
topic of discussion.
Yet the destruction of cultural patrimony at the hands of
terrorists continues. For more than 800 years, the al-Nuri
mosque, with its distinctive leaning minaret, stood as a
testament to the cultural heritage of the city of Mosul in
Iraq. This week, ISIS blew up the mosque and its famous minaret
destroying these ancient edifices in an instant.
We strongly condemn this despicable act, which only further
proves that the terrorists have no respect for Iraq's identity,
culture, and religion. The United States will continue to stand
with the Iraqi people, the free people of Syria, and our
partners around the world in our shared fight against ISIS
until it is defeated.
I am happy to answer any questions that you may have.
[The prepared statement of Ms. Grunder can be found on page
28 of the appendix.]
Chairman Pearce. Thank you very much.
Dr. Daniels, you are now recognized for 5 minutes.
STATEMENT OF BRIAN I. DANIELS, RESEARCH ASSOCIATE, SMITHSONIAN
INSTITUTION
Mr. Daniels. Chairman Pearce, Ranking Member Perlmutter,
and distinguished members of the subcommittee, thank you for
the opportunity to appear before you today to discuss criminal
and terrorist groups' use of the illicit antiquities trade. I
study the subject as a Research Associate at the Smithsonian
Institution, and I would like to highlight a few key points
from my submitted testimony.
There is now growing concern and compelling evidence that
archaeological site looting is implicated in the financing of
organized criminal activity and other terrorist networks. It is
my view that these developments may represent a recent
innovation and a restructuring of the overall antiquities and
art trade.
For much of the past 50 years, the illicit antiquities
trade has involved regional networks of looters, intermediaries
who purchase from looters, distributors who purchase from
intermediaries, and collectors in the United States and Western
Europe. These networks assert as stable, hierarchical, and
functional multi-decade supply chains. Existing laws in the
United States, such as the Convention on Cultural Property
Implementation Act of 1983, and current law enforcement
responses are oriented toward identifying, forfeiting, and
repatriating artifacts that are traded through these illicit
networks.
In recent years, reports have linked criminal and terrorist
groups to antiquities sales more directly. Some of these
accounts are more credible than others. Commentators have
implicated members of the Haqqani Network, which is allied with
the Taliban and al-Qaida, in collecting protection money from
traffickers moving looted artifacts from Afghanistan into
Pakistan.
There have also been suggestions of links between the
insurgency following the second Gulf War and the illicit
antiquities trade in Iraq. Archaeological site looting began
early in the Syrian civil war and has been widespread in
regions under the control of the Assad regime and in areas held
by various rebel groups.
Since 2014, more attention has been given to the activities
of Daesh in Syria and Iraq. Although media stories have
attributed Daesh's income from the illicit antiquities trade to
monetary figures that strain all reasonable belief, this hype
should not distract us from the fact that looted antiquities
have been found in the possession of Daesh leaders and
militants with documentation about their direct involvement in
the trade.
Additionally, in late 2016, the Italian Government
confirmed that Daesh had expanded its organized looting
activity into Libya as part of a collaborative enterprise with
the Calabrian mafia.
How might traditional supply chains for the antiquities
trade change in response to the interest of criminal and
terrorist groups? We would expect the looters to remain the
same but the intermediaries purchasing antiquities from those
looters to be different. These buyers are likely to be
opportunistic and to treat antiquities as a resource similar to
other illicitly trafficked conflict resources, such as
diamonds, oil, and coltan. We would also anticipate that their
participation would vary according to the underlying market
value of the antiquities, access to distributors, collector
demand, and the perceived and actual success of international
efforts to restrict the sale of illicitly trafficked
antiquities on legal art markets.
It is also important to note that the association between
archaeological site looting and criminal groups is not only an
international problem. In the United States, Native American
archaeological sites are targeted by looters, particularly in
the Southwest, who are searching for pottery and other
materials for sale to intermediaries.
At the border of Oregon and California where I conduct an
archaeological project, recent prosecutions broke up a criminal
gang selling methamphetamines and looted archaeological
material. At present, we do not have sufficient consultation
with Tribal communities or the basic research completed to
understand how these domestic illicit networks might operate in
a transnational context.
In summary, there is good reason to suspect that the
illicit antiquities trade is going through a reconfiguration
that involves the integration of organized criminal networks
and terrorist groups. Unlike the more traditional illicit
antiquities trade, which archaeologists have known well, these
developments require additional study and interdisciplinary
collaboration with criminologists and political scientists, who
are more familiar with research about illicit criminal networks
and terrorists.
In an effort to develop precisely these collaborations, a
group of 15 U.S. international universities and museums came
together to form the Conflict Culture Research Network. I
coordinate this project, and the National Science Foundation
supported its planning. Our knowledge about the illicit
antiquities trade, as well as the amount of funding earned by
criminal and terrorist actors from it, will only improve as
additional research is done.
I am happy to answer any questions you may have. Thank you
very much.
[The prepared statement of Dr. Daniels can be found on page
24 of the appendix.]
Chairman Pearce. Thank you, Dr. Daniels.
And Mr. Villanueva, you are now recognized for 5 minutes.
STATEMENT OF RAYMOND VILLANUEVA, ASSISTANT DIRECTOR FOR
INTERNATIONAL OPERATIONS, U.S. IMMIGRATION AND CUSTOMS
ENFORCEMENT, HOMELAND SECURITY INVESTIGATIONS, U.S. DEPARTMENT
OF HOMELAND SECURITY
Mr. Villanueva. Good morning, Chairman Pearce, Ranking
Member Perlmutter, and distinguished members of the
subcommittee. Thank you for the opportunity to appear before
you today to discuss Immigration and Customs Enforcement
Homeland Security Investigations', what we refer to as efforts
to protect cultural property, art, and antiquities, and to
mitigate their trafficking both into and out of the United
States.
Before I move any further, the men and women of ICE extend
our best wishes and stand with the Members of Congress as our
Nation was confronted with the awful occurrence last week.
This morning, I would like to describe HSI's cultural
property, arts, and antiquities efforts, also known as our CPAA
program, and discuss the important collaboration with our
partners on this issue. Lastly, I would like to highlight some
of our cultural property cases.
I am often asked, why is HSI involved with CPAA? There are
a couple of reasons for that. Federal customs law prohibits
smuggling and trafficking of all merchandise to include CPAA.
Additionally, HSI's border authority provides us with a
responsibility and the unique tools to take a lead role in
investigating crimes involving the import, export, and
distribution of stolen or looted cultural property.
As the largest investigative agency within DHS, HSI works
with Tribal, Federal, State, and local law enforcement, private
institutions, intergovernmental organizations, and foreign
governments on these cases. We also work with the Department of
Justice and other competent authorities to prosecute the
individuals and organizations responsible for these crimes.
To ensure the appropriate effort on investigating these
crimes, we established the CPAA program based in our Office of
International Operations. The program has a three-part mission.
The first one is training and education. As Ms. Grunder
mentioned, we actually partner with the Department of State,
and the Smithsonian Institution, and we have trained more than
400 law enforcement professionals, including HSI special
agents; Customs and Border Protection, or CBP officers;
prosecutors; interagency partners; and foreign law enforcement
officers on the preservation, protection, and investigation of
cultural property.
The second one is investigations support. The CPAA program
helps identify subject matter experts to authenticate items
that might have cultural and religious significance and acts as
a liaison to the INTERPOL, FBI, and other law enforcement
agencies. Through the program, we support over 6,000 special
agents, HSI special agents, in more than 200 domestic offices
throughout the United States. But we also work through our
network of international offices at 67 embassies and consular
offices throughout the world where our investigators
collaborate with partners, such as the Carabinieri Tutela del
Patrimonio Culturale, which is Italy's force responsible for
combatting arts and antiquities crimes.
And third is the repatriation. The CPAA program facilitates
the legal forfeiture process and eventual repatriation of
cultural items seized as a result of HSI investigations to the
rightful owners. Whether through a simple exchange, or a grand
ceremony held at the embassies here in Washington, D.C., these
events highlight the stories behind the objects themselves as
well as the women and men who brought the criminals to justice.
Since 2007, HSI, in coordination with CBP, the Department
of State has returned more than 8,000 historical objects or
artifacts to more than 30 countries around the world. One of
our largest cultural property efforts is Operation Hidden Idols
led by one of our two specialized teams located in New York and
Los Angeles. The case began in 2007 out of our New York team
and has resulted in the seizure of over 3,000 artifacts, 6
arrests, 5 convictions, and the execution of more than 50
search warrants.
Thank you again for the opportunity to testify, and for
your continued support not only of HSI but of the law
enforcement mission as a whole. We remain committed to working
with this committee and our partners to mitigate the
trafficking of cultural property, regardless of the source.
And finally, I would like to direct your attention to the
pictures that provide some examples of the incredible pieces of
history we have seized and properly returned. Thank you very
much, and I will be happy to answer any questions you may have.
[The prepared statement of Mr. Villanueva can be found on
page 39 of the appendix.]
Chairman Pearce. Thank you, Mr. Villanueva.
I now yield myself 5 minutes for questions.
So if I were going to make this more personal, to give the
example of, about 5 years ago I received a call from a good
friend of mine who was one of the officers in one of the Tribes
in New Mexico. While surfing the internet, he had come across a
mask, a cultural mask that had come from his Tribe 150, 200
years before, and so he went online and bought it. About
$23,000, I think was the purchase price. There was a second one
in the next lot. Being on an Indian reservation, the internet
went down and he missed the second one.
Now, his description to me about the effect is what really
caught my attention, that he and his wife had lost a child in
childbirth, and he said when the internet went down, losing
that second article was equivalent, and made him feel as bad as
when he lost the child in childbirth. So then it began to
penetrate that we need to be doing more.
So, Mr. Villanueva, how long does it take to track and
prosecute a case, just a simple case, just roughly? And we have
a lot of questions here, so--
Mr. Villanueva. Sir, thank you for the question. All cases
are different. We look at cases on a case-by-case basis. These
cases, when we talk about cultural property, arts and
antiquities, and following the explanation of Dr. Daniels,
which is very pointed, these organizations are extremely
compartmentalized from the looters to the intermediaries, and
they can be quite complicated.
Chairman Pearce. Complicated in years, is kind of what I
want to hear.
Now, say the top left artifact there, what is the value on
that?
Mr. Villanueva. Sir, as far as the values, I have to say we
do use a value system, but it is actually for the legal side of
it, whether we are going to do--
Chairman Pearce. I understand. I am trying to get to the
incentive. What is the financial incentive?
Dr. Daniels, do you have an opinion about what something
like that would cost on the black market?
Mr. Daniels. It depends on which level of the market that
it is actually being trafficked. An object like that at the top
left might be worth in the tens of thousands of dollars on the
black market.
Chairman Pearce. Okay. So you have, basically, rights and
title. Once the thing is in trade back and forth, it can stay
in trade in a particular market for years. Is there any way to
regulate that particular transfer back and forth? Is it being
regulated now?
And, Mr. Villanueva, and I would guess that Ms. Grunder,
you may have an opinion on this.
Mr. Villanueva. Do you mind repeating the question, sir?
Chairman Pearce. Yes. So once an article has been acquired
and sold into a market, it can then be traded back and forth
between collectors who know each other and never leave the
country. Is there any way to regulate that chain of ownership
right now?
Mr. Villanueva. So if that piece was actually imported into
the United States--
Chairman Pearce. No, I didn't say that. If it just stays
out there circulating in a country, no way to track--people are
actually identifying it, they are insuring it, they put it on
their inventory, but there is no way to track it, is there?
Mr. Villanueva. To your point, you are absolutely correct.
If the piece is outside of the United States, our ability to
track that as U.S. law enforcement is limited. We then rely on
the art markets, the vendors, and the supply chain to notify
law enforcement of the existence of the piece. But to your
point, sir, you are correct.
Chairman Pearce. Ms. Grunder, very quickly, if you could
address that, if you have an opinion.
Ms. Grunder. Primarily in the area of training and building
awareness of the illicit trade, and we work very closely with
DHS on that sort of activity.
Chairman Pearce. Okay. So the stimulation is always money,
right? I read your testimony, and we are talking about focusing
on repatriation. Sometimes we focus on prosecution, but it
seems to me that the better--just my perspective--way is to
affect the value.
So I imagine that open sourcing, just people out there who
are aware that a property is being destroyed and taken, if they
had some way to enter into a database, block chain analysis or
whatever it is, that this--we see this property being taken,
they are not even in the product distribution, anything like
that, but then you can imagine that if we appeal to the
collectors, surely one out of 100 would have some sort of moral
sense that, I just can't let it go by that, I have been
approached to buy something I think is illegal. They just enter
that into the system, the system begins to identify, just maybe
scattered here, there, down the future 5 years, ooh, here it is
again. Now we see that somebody reported it back here. It
surfaced briefly here, it is there, but each one of those
identification points drives the value down.
If you can affect the value, people are less likely to get
in. If they don't think they can get their million bucks back,
they are not going to put a million bucks into a very
significant piece. So I just think that we have to be thinking
at least in some way to interdict the value. That is going to
be much easier than the prosecution; it is going to be much
easier than the inventory tracking. So let's think more about
it.
My time has expired. I recognize the gentleman from
Colorado, Mr. Perlmutter, for 5 minutes.
Mr. Perlmutter. Thanks, Mr. Chairman.
My experience with all of this comes mostly from watching
TV, ``Madam Secretary'' and the different episodes they have
had on stolen art and the destruction of antiquities and that
kind of stuff. So I apologize for not really understanding
this.
Dr. Daniels, there are a couple of sentences in your
testimony today that I would just like to inquire about a
little bit more so that we actually understand, to the best of
our ability, how this works, how eventually, from these
antiquities, from the art works, from the artifacts, somebody
gets money to do bad things around the world. So first, the
theft is bad, and then they underwrite activities that are
detrimental to America.
So you talked about your workshop that you conducted back
in 2014 before Daesh advanced into Syria. And you say we learn
more about the cultural risks of the professionals who are
trying to study these antiquities. I would like to know a
little more about that. Then you talk about Daesh, what they
did was they had a tax, in effect, across the territory where
they allowed looters to come in to a particular area, take
stuff, and then there was a 20 percent tax. I would like to
know a little more about that.
And then during your testimony and in your report, you say
that, ``nevertheless, such hype should not distract us,'' and I
want to know what you meant by that. So if you would, sir.
Mr. Daniels. Thank you very much. Let me take the first
question about the workshop that we held in 2014 in southern
Turkey. That particular workshop gathered together a group of
Syrian cultural heritage professionals in areas outside of the
control of the Assad regime who were caught in the conflict and
caught in the crossfire and deeply concerned with preserving
cultural property under their jurisdiction in those areas. It
was primarily focused on archaeological sites in northwestern
Syria and in museums and mosaics in what we call the Dead City
area.
And what we learned from them was they were deeply
concerned about extremism. They were deeply concerned about
entities such as Daesh, but they were also very concerned about
barrel bombs by the Assad regime, and this was their primary
concern about how they could protect collections from aerial
bombardment. And this is in large measure what our discussions
actually focused on in that context.
As far as the tax that we learned about that was being
conducted, the 20 percent tax, it was variable according to
area and the type of artifact that was actually discovered.
That was something that appeared to be a new innovation in
terms of organized and systematized looting. I understand that
the committee has been briefed by the FBI on developments
subsequent to 2014, in particular regard to the Abu Sayyaf
raid. And what this really represented was an organized way for
a criminal and terrorist organization to benefit from the
antiquities trade in ways that--
Mr. Perlmutter. So let me just stop you, because I am
trying to figure that out. So did somebody from Daesh hire an
art appraiser to say, okay, this is what this stuff is worth,
and then did the Daesh militants, whomever they were, the ISIS
folks, say to the looters, okay, we have appraised this, and
you are going to pay us 20 percent, you can take it?
Mr. Daniels. Generally speaking, they impressed
archaeologists and other cultural heritage professionals into
their service.
Mr. Perlmutter. Okay. To appraise it?
Mr. Daniels. To appraise.
Mr. Perlmutter. All right.
Mr. Daniels. And so when I mention the ``hype'' in my
remarks, one of the concerns that we have in the archaeological
community is speculation about how much an entity like Daesh or
any other terrorist organization actually earns from the
illicit antiquities trade. I have been in fora both in the
United States and internationally where numbers such as $600
million or $2 billion have been floated. That strains my
imagination.
Mr. Perlmutter. Okay.
Mr. Daniels. And I think that it is incumbent upon us as
archaeologists who research this to be circumspect in the kinds
of claims that we make, because it is such a strong claim to
talk about the looting of antiquities and the market. And so we
need to be realistic about the kinds of monetary figures that
we share with Members of Congress and other policymakers such
as yourselves.
Mr. Perlmutter. All right. Thank you.
And I yield back, Mr. Chairman.
Chairman Pearce. The gentleman's time has expired.
The gentleman from Colorado--or from North Carolina, Mr.
Pittenger, is recognized.
Mr. Pittenger. Thank you, Mr. Chairman. I do like Colorado.
I thank each of you for being with us today and for your
expertise that you offer our committee.
I would like to know what Congress can do and what more can
be done to strengthen our sanctions laws or any policy tools
that we could pursue to ensure that we can put an end to Daesh
and its antiquities trade. Who would like to comment on that?
Don't fight over it now.
Ms. Grunder. Thank you, Congressman Pittenger. We welcome
the engagement of Congress in this really important issue, and
I just wanted to add to the comments of Dr. Daniels. The
exploitation of cultural property by terrorist groups like ISIS
is dual-edged, and we just can't underestimate the terror value
of blowing up and destroying these sites.
Mr. Pittenger. I appreciate that. What I need to find out,
though, is whether there is anything more we can be doing in
Congress to facilitate our capabilities?
Ms. Grunder. As you know, we set up the Cultural Heritage
Coordinating Committee in response to the sense of Congress
from last summer's legislation, and we are going forward with
that very senior coordinating body to strengthen our
enforcement as much as possible.
Mr. Daniels. Sir, to your question, to date, we have
treated the antiquities trade primarily as a problem of trade
and import restrictions to reduce the incentives to loot and
also access to U.S. markets for those looted materials. That is
an important first step.
But to date, there has not been any really creative
thinking about how we would address the issue of antiquities
looting around financial crimes. And there hasn't been the kind
of conversation about what laws or policies would actually look
like at that nexus.
Mr. Pittenger. I would like to delve into technology. What
technology is being used right now to address this illicit
trafficking that--you are aware of the image recognition. Are
varnish solutions applied to certain objects? Are we
sophisticated enough in our technology or are we adequate or do
we have capabilities there?
Mr. Daniels. Image recognition software to date is
primarily based on facial recognition and shadows as a
technology, and, unfortunately, those kinds of technologies
don't actually translate well to flat surfaces like pottery.
And so we are not quite at that level of technical
sophistication to really kind of make an app for that as it
were.
Mr. Pittenger. How about trade-based money laundering, does
this enter in--do they use trade-based money laundering as a
means to transfer these objects?
Mr. Villanueva. Sir, from the trade-based money laundering
perspective, it will take money from an illicit source to buy a
commodity and then ship that commodity across international
boundaries. So, yes, it is very possible that it is something
that could happen.
Mr. Pittenger. The subterfuge of shipping out something
from one country to another--
Mr. Villanueva. Absolutely. And you are changing the shape
of the money, the cash, into a commodity, shipping the
commodity, selling that commodity, and, therefore, laundering
illicit funds, so it is a possibility. We have the trade
transparency unit, which is one of my old jobs that dedicates
their time and effort 100 percent to pursue trade-based money
laundering by working with the customs administrations of the
world in exchanging trade data to do that type of work. So it's
something that we, in law enforcement, are looking at, and it
is very possible, sir.
Mr. Pittenger. Do we need to strengthen our capabilities in
terms of TBML? And other countries, are they collaborating with
us? Do you see a commitment, in terms of our partners, in being
able to have the technology and the commitment to oversee TBML?
Mr. Villanueva. Yes, sir, we do. We work very well with the
international community. A little bit of a difference that
sometimes we encounter is that some customs administration,
they are not law enforcement, where in the United States we
carry a law enforcement mission, but then we work with the
national police force and the customs administration, so there
is a good partnership. There is many countries that are willing
to work with us under the customs mutual assistance agreements
that are in place throughout the world.
Mr. Pittenger. Okay. My time is about up. Thank you so
much.
I yield back.
Chairman Pearce. The gentleman's time has expired.
The Chair now recognizes the gentleman from Illinois, Mr.
Foster.
Mr. Foster. Thank you. Thank you to everyone here. It is a
very tragic subject.
I was wondering, what is the rough fraction of, say,
Daesh's secondary market in terms of regions of the world:
Western Europe; Asia; the Gulf states and other Arab states;
and North America, just in rough terms? And are there trends in
that? How effective have we been, for example, in Western
Europe and North America to at least restrict purchases to
well-documented, things that have been documented to be in
museums and then disappear, and as well as items that were
lifted out of the ground without documentation at all in the
last couple of years?
Mr. Daniels. Sir, I think that the short answer to that
question is that, generally speaking, in a conflict-looting
environment, our research to date suggests that it takes 6 to 9
years for the antiquities themselves to surface publicly at the
sort of end stage of the distribution node.
What we do know about the antiquities that we have seen
looted from Syria, more broadly, that are not at the moment
possible to link to Daesh itself, is that they are generally
being transshipped through Southeast Asia and through countries
such as Singapore, Indonesia, and Thailand, and then back to
markets in Western Europe.
Western Europe predated the United States in placing import
restrictions on looted material from Syria. The European Union
was very quick on this particular issue, and Germany very much
so has been very focused on clamping down this kind of trade.
So we are not, at the moment, able to actually parse out in
strict percentages where, say, Daesh's material is specifically
going to different market countries and market destinations.
What we can say is that we suspect that this material is in the
pipeline, again, from transshipment records that we have seen
from Southeast Asia.
We can also suspect that, as Ms. Grunder mentioned, the
United States is the largest art market nation. Other
significant art market nations include China, Russia, the Gulf
states, Saudi Arabia, Qatar, and the Emirates. And so our
suspicion is that we may see some kind of restructuring as
these materials begin to surface, and they may not necessarily
appear in, say, Western Europe as we might have typically
expected, say, after the Iraq war.
Mr. Foster. Certainly in the traditional modern and more
modern art markets, China is a huge player and Asia generally.
It would not be surprising to find them equally large.
So we have no way of even guessing the percentage of stuff
that is transshipped to Southeast Asia and then doesn't even
head for North America?
Mr. Daniels. Sir, at the moment we have not actually been
able to review the transshipment records from a research
perspective, and I really don't know the extent to which there
may be ongoing law enforcement investigations in the United
States on that subject.
Mr. Foster. How important is the documentation of an
artifact to its value on the secondary market?
Mr. Daniels. The preliminary research that we have done
suggests that documentation of an artifact will increase the
value of the objects somewhere on the order of 40 percent. So
you can count that as a discount, if the object is completely
unprovenanced without documentation.
Mr. Foster. Is the technology to make fake artifacts
sufficiently advanced such that it is watering down the value
of nondocumented artifacts or not yet?
Mr. Daniels. One of the interesting things about the Syrian
crisis is that there has been a flourishing of a fake
antiquities market inside Syria that in many ways showed up
first in the United States and in Western Europe, and these are
very clearly fake. But there is enough expertise that exists
within the international art market to actually determine the
difference between a fake and a real object that I am not sure
it has had any kind of effect on depressing prices.
Mr. Foster. Okay. In a funny way, it is maybe encouraging
that the real theft is being diluted by competent forgeries.
A couple of years ago, Daesh started issuing gold coins
with the intention of destroying the U.S. dollar. And I was
wondering, have those--I presume they are pretty much
worthless, except for their intrinsic value--started to acquire
value on the secondary market as just a coin of another dead or
dying country?
Mr. Daniels. I have not seen any evidence to date of
extensive collection of the Daesh coins, although I have heard
from law enforcement officials outside the United States that
there is a collectors' market for some objects in the Gulf
states.
Mr. Foster. I guess my time is up, so thank you.
Chairman Pearce. The gentleman's time has expired.
The Chair now recognizes the gentleman from Arkansas, Mr.
Hill.
Mr. Hill. Thank you, Mr. Chairman. I thank the ranking
member for bringing this important subject back. And certainly
I want to thank Dr. Daniels for the Smithsonian's work around
the United States in museum education and repatriation of
cultural artifacts in coordination with our Native Americans
around the country. It has been a great 20 years of the work
that the Smithsonian has done on that.
When I think about this subject, to me, from my reading,
destruction, simple, malicious terrorist destruction seems
really an equal or greater motivation than making money as a
channel for the Islamic State.
One of my favorite books last year was reading the Bad-Ass
Librarians of Timbuktu, which I commend to my colleagues is a
terrific book in Mali of just simply the Sub-Saharan terrorist
organizations connected with al-Qaida and the Islamic State and
others, just their relentless effort to destroy thousands of
years of Islamic manuscripts just because they could.
So I hope that you will recommend to the Treasury
Department that when Secretary Mnuchin goes to the Gulf this
year to discuss this Gulf states-headquartered terror finance
unit, that this issue of antiquities transfer be put on his
agenda in the Gulf states, because I have no doubt that if you
wanted a relic from the Levant, it seems like that would have
high value among Gulf State actors with funding.
Following up on Mr. Foster's comments about the buy side,
on the sell side, where is, in your view, the major leakage of
cultural artifacts? Are they primarily exiting through Turkey
to these other markets you described or to the coast somewhere
on the Mediterranean? Talk to me about where you think we
should be most vigilant at looking for the leakage.
Mr. Daniels. Thank you for the question, sir. The Turkish
law enforcement has actually very much stepped up to the
current crisis about archaeological site looting, and the
numbers of artifacts that the Turkish police forces have
actually recovered is quite extraordinary and points to the
effectiveness of their law enforcement response.
My own view on this is that much of the large antiquities,
not the small antiquities, but the large antiquities, were
actually smuggled from Syria into Iraq to Mosul itself. And
some of the members may be aware that not all plane flights
stopped to Mosul during the present Iraq crisis, and my
suspicion is that--or my working theory is that many of those
artifacts were smuggled in those plane flights, particularly
the large plane flights, and then to the Southeast Asian route
that we have actually seen crop up.
Some smaller artifacts, especially earlier in the conflict,
were likely smuggled out through the regional networks that
have long been established and routed through Lebanon, which
has been a major transshipment point and sales point for
antiquities in the Middle East for the better part of the last
75 or 100 years.
Mr. Hill. Thank you. That is responsive. I think it guides
the committee and also the Department of State, I would think,
on where to place emphasis in trying to step up working with
our customs people and our experts on how to target the
stopping of those that do get transshipped.
On a separate subject, we center all of our money
laundering work on the banking system, because we always
believe that people will try to turn whatever they have in the
global market to cash, and, therefore, the nicest place to
track that is in a financial institution. Of course, we know
that now in today's society, that is not necessarily accurate.
So do you think that the international art community should
be required, perhaps, to file a suspicious activity report
through to some place or among each other on a self-regulatory
or cooperative basis? I would be interested in your views on
that, how you think those red flags could be used in maybe a
more effective way. Whomever would like to respond to that.
Mr. Villanueva. That is an interesting question, actually.
On the money side of the house, art dealers, as part of a
business transaction, if they receive more than $10,000 in
cash, they will have to do the Form 8300. As far as suspicious
activity reports, that will entail a change in legislation
because they are not a money service business. They are an arts
dealer. I would defer to experts in terms of suspicious
activity reports as it pertains to the art market.
But as far as the money side of the house, that would
entail a little bit of a change, because they are not
necessarily known as a money service business. However, there
are mechanisms in place to contact law enforcement, and some of
them have done that quite proactively, when they come across
differing artifacts that are questionable to their expertise.
They are the experts. So if we think of using your analogy,
sir, if you think in terms of the art dealers as we think of
the banks, which are the front line of defense for financial
transaction, then art dealers are the first line of defense for
us when it comes to the selling of looted artifacts, and we
would love to work more with them. We are doing a lot of work
with that community in terms of outreach, using their
expertise, but I will defer to my colleagues at the table on
the CPAA or the cultural properties out of the house.
Chairman Pearce. Thank you. The gentleman's time has
expired.
The Chair now recognizes the gentleman from Nevada, Mr.
Kihuen.
Mr. Kihuen. Thank you, Mr. Chairman, and Mr. Ranking
Member. And I thank you all this morning for being here with
us, talking about such an important subject.
I just have a couple of questions. In your opinion, how has
ISIS' approach to collecting payments from looters changed
since the coalition air strikes in 2014 began to choke off
other sources of revenue, including the sale of oil? And that
is for any of you.
Mr. Daniels. I think two things on this. I think that the
information that we actually--that we understand about how this
market actually operates certainly became much more fragmented,
in my view, since the coalition air strikes actually began. And
so in some ways we are operating in an environment where it is
not entirely clear.
What I am aware of is that about the time the coalition air
strikes began, it became harder to move material, and this is
what my colleagues whom I have been working with in Syria tell
me. And at that juncture there was also a problem of actually
determining the price point of many of these antiquities, and
many of the first buyer intermediaries began to misidentify in
many ways the value of the antiquities, either grossly
overvaluing or grossly undervaluing, pointing to a fact that
maybe some of the expertise that they were relying on may have
escaped or there wasn't as much coordination because of the
disruption caused by the coalition air strikes.
Mr. Kihuen. Got it.
And, Mr. Villanueva, your testimony notes that your agency
has a robust international presence through a network of
attaches at 67 different embassies and consulates. Of these
attaches, how many of them have expertise dealing with art and
antiquities? And, in your view, is additional training for such
personnel warranted?
Mr. Villanueva. Thank you for the question, sir. So, yes,
we do actually--as a part of our training, as Ms. Grunder
mentioned, we actually train some of our agents stationed
abroad. There are some offices that are heavily engaged. I
mentioned the Italian Carabinieri. Our office in Rome within
the embassy under the chief of mission works very closely with
our foreign partners on that.
But let me say this: We do have subject matter experts in
our office in D.C. We work very close with the Smithsonian, and
with the Department of State. So if any of our agents, any of
our 6,000 agents, whether domestically or abroad, comes across
to a case, an allegation involving CPAA, even if they are not
trained, they do have resources available immediately, people
that we can deploy, people who can talk to them on the phone to
help guide that investigation.
Mr. Kihuen. Got it. Thank you.
And then just my last question, and you might have answered
this before I got here, but what portion of the funds are
raised from direct looting by ISIS itself versus through
imposing taxes and licenses on the civilian population?
Mr. Daniels. Sir, I think that one of the issues with the
amount of money identified from ISIS is that we are really not
clear right now about parsing out the exact dollar figure from
ISIS. The best information I think that exists to date on that
is the financial information that was retrieved from the Abu
Sayyaf raid, and again, my understanding is that the committee
was briefed on that particular raid in closed session.
Mr. Kihuen. Okay. Thank you.
Thank you, Mr. Chairman. I yield back.
Chairman Pearce. The Chair now recognizes the gentleman
from somewhere east of the Mississippi River, Mr. Poliquin.
Mr. Poliquin. Mr. Chairman, that would be the great State
of Maine, Vacationland. If you haven't booked your summer
vacation to Maine, you should do so now.
Thank you, gentlemen, and Ms. Grunder, for being here
today. We really appreciate this. This is a concern to all
Americans who want to make sure we preserve world history and
culture, including here in the United States.
We spend a lot of time talking about this illicit trade
over in the Middle East and other parts of this great Earth,
but what about right here in America? We have a real problem in
our great State of Maine with an opioid and heroin addiction--
an epidemic, I should say. It is a real concern. It is
affecting all of our families or most of our families.
And there has been a little bit of discussion today about
illicit trade in antiquities here, right here, in historical
artifacts right here in America. I would like to ask you, each
of you, if you can weigh in as quickly as you can so I can get
to some other questions, Ms. Grunder, we will start with you,
do you have any feel for how much of this illicit trade in
antiquities and historical artifacts has an impact on illicit
drug trade here in America?
Ms. Grunder. Thank you for the question. We believe that
there are commonalities between all the different forms of
illicit trade, but I would have to leave it to the experts
for--
Mr. Poliquin. Thank you.
Dr. Daniels?
Mr. Daniels. Right now, we really do not have a very good
sense about the relationship between Native American looting
and the illicit drug trade, except insofar as many of the
Native American cultural property cases that have emerged have
drug ties to either methamphetamines or to opioids.
Mr. Poliquin. Okay. But it is happening?
Mr. Daniels. It is definitely happening. My own view on
this and my working theory on this is that the looting of the
archaeological sites actually provides a form of base capital
for drug producers to begin their operations.
Mr. Poliquin. I see.
Mr. Villanueva, we have to choke off the financing to
anybody who is trying to sell this poison to our kids and our
families, whether it be in Maine, New Hampshire, or any other
part of the country. Do you have any information here for the
panel on this?
Mr. Villanueva. You mentioned financial as it pertains to
drug trafficking. Our agency brings many years, over 40 years
of financial investigation expertise. As a matter of fact, I
have worked my career of over 25 years as a money laundering
investigator.
Mr. Poliquin. Thank you for doing that, but do we have a
connection between the illegal drug trade and heroin and opioid
in America with respect to the selling of our historical
artifacts here within our borders?
Mr. Villanueva. What I can say in this forum at this point
is that we have not seen any investigations on CPAA
specifically cautioning on opioids, but I have to limit my
comments at this point just to that.
Mr. Poliquin. Okay. Thanks.
Let's dig in to another issue here. Dr. Daniels, I will
start with you. Tell us a little bit about how a free port
works and how a free port might have an impact on the illicit
trade of historical artifacts in fueling the drug trade across
the world.
Mr. Daniels. Generally speaking, sir, with a free port--we
expect the antiquities trade to actually follow the free ports.
Free ports have served as gallery spaces for distributors to
actually show--
Mr. Poliquin. There are warehouses at different ports of
entry around the world. Is that correct?
Mr. Daniels. That is correct, sir.
Mr. Poliquin. Okay.
Mr. Daniels. And so these warehouses serve as both
showrooms. They serve as conservation centers. They serve as
areas for the long-term holding of antiquities while they
increase in value or the taint that is associated with their
looting disappears over the passage of time.
Mr. Poliquin. Okay.
And, Mr. Villanueva, do you have any comment on that issue
in particular?
Mr. Villanueva. Sir, I agree with Dr. Daniels. What I want
to highlight is that free trade zones in the United States are
a little bit different than those abroad. Free trade zones in
the United States are heavily regulated. Customs and Border
Protection does great work in that space, and any merchandise
in the United States going in and out of a free trade zone is
subject to shipping documents, such as country of origin,
description, and valuation, very similar to the shipping
information when they are actually bringing merchandise into
our commerce or out of the United States--
Mr. Poliquin. Since this has an impact on terrorism
financing around the world, does the United States Government
have any kind of jurisdiction in those free zones in other
countries in other parts of the world?
Mr. Villanueva. Only if it pertains to merchandise coming
into our commerce once it comes into the United States.
Mr. Poliquin. I see.
Thank you, Mr. Chairman, very much. I yield back my time.
And thank you all for being here today.
Mr. Pittenger [presiding]. The Chair recognizes the
gentlelady from New York, Mrs. Maloney.
Mrs. Maloney. I thank all of the panelists for being here,
and I thank the chairman and the ranking member for holding
this important hearing on the theft of cultural antiquities. It
has long been an interest of mine, and this is hardly a new
practice.
In the early 1800s, when Greece was under Ottoman rule, a
British nobleman took over 100 pieces of the historic Parthenon
in Athens, and under very questionable circumstances, he then
sold these artifacts known as the Parthenon Marbles or
sculptures to the British museum, where they remain today. This
is probably the most important antiquities in Greece prepared,
developed by Greek artists, owned by the Greeks, and yet a
representative of an occupying nation sold them. He certainly
didn't have the right to sell them, so in effect, in my
opinion, they were stolen.
And I have introduced a resolution that calls for the two
countries to negotiate a return of the Parthenon Marbles,
because these artifacts have incredible cultural significance
to the Greek people. But the story of the Parthenon Marbles in
many ways mirrors the modern problems that we face in the
illegal antiquities market. The British nobleman Thomas Bruce
took these artifacts while the Ottomans were ruling Greece and
then was able to profit when he sold them to a museum.
Like today, there are terrorist organizations like ISIS who
steal cultural artifacts in territories that they occupy and
then convert them to cash by selling them on the black market
in order to fund their terrorist organizations. Of course, if
there were not a secondary market for stolen antiquities, then
terrorists and criminals would not see these artifacts as
potential sources of revenue in the first place.
So I have two questions to ask the panel, and I would like
to start with Mr. Villanueva.
First, is it the lack of agreed-upon and enforceable
standards in the antiquities market that makes it so attractive
to criminals and terrorists to sell these artifacts or are the
terrorists just using the antiquities market simply because the
area they currently occupy happen to have lots of valuable
antiquities?
And we have been called to a vote.
Mr. Villanueva. I would say that when we are talking about
cultural property, arts and antiquities trafficking, we are
talking about, perhaps, the oldest crime in the books of law.
Ever since we have had civilization, and we have had art, we
have had the smuggling and looting of arts and antiquities.
But what I would say is that you talk about the area I
occupy. I would also mention that there are regions with civil
unrest, with rich history, traditions, arts and antiquities. So
we do have, as far as the United States--I feel comfortable
enforcing the laws we have, issues working with the
international community to prevent the looting specifically as
it pertains--
Mrs. Maloney. Do we have standards to prevent this in the
antiquities market? Are people who buy these, do they have
standards and laws against doing this? What are the standards
that could prevent this from happening? Dr. Daniels?
Mr. Daniels. One of the issues in the broader antiquities
market is that it has existed for a very long time, as you
rightly point out. And for much of that time, there has been
very little oversight or regulation or due diligence required
in the passage of antiquities throughout the supply chain and
then, ultimately, on to collectors.
This has actually changed in recent years with the
vigilance of the FBI Art Crime Team, and the State Department
working well with them to enforce the memorandum of
understanding that we have for the specific 16 countries and
the other two special cases.
Our principal issue, though, is that that does not
represent international coverage, and there is a real lack of
standards about what constitutes the documentation required for
legal title for the sale of an object through that supply chain
and the expectation to receive that kind of title information.
Mrs. Maloney. So how would you create the international
standards? Through the Hague? How would it be created? What
entity? The United Nations? How would you make this happen
internationally?
Mr. Daniels. Right now, the approach has been very much
piecemeal country by country, according to the laws of
possessor title in each country.
Mrs. Maloney. Do you think it would be good to go to the
United Nations with this effort?
Mr. Daniels. I am not sure there would be concurrence in
the United Nations for such an actual project, and in that way
I am a realist, politically, about what is possible in that
way. But I think that there are certainly possibilities that
this committee and the United States Congress can explore in
regard to legitimate title.
Mrs. Maloney. Thank you.
Mr. Pittenger. The gentlelady's time has expired.
The Chair recognizes Mr. Royce, chairman of the House
Foreign Affairs Committee.
Mr. Royce. I thank the chairman.
The Foreign Affairs Committee's ranking member, Eliot
Engel, and I last year passed the Protect and Preserve Cultural
Property Act, and the goal there was to deny funding to ISIS,
but also to improve our ability, our government's ability to
work with our partners there in Syria and in Iraq. And since
that time--and I was at the Iraq museum last year--we have seen
the destruction of the Great Mosque in Mosul.
And I was going to ask in that vein, I would ask the panel
what the practical impact of this legislation has been both as
it relates to stopping the illicit trade in antiquities and in
the coordination among the respective agencies that have a
stake in this fight, and also, are there other countries
experiencing conflict in which illicit antiquities might enter
the U.S. markets just as these antiquities taken down by ISIS
has been found to have entered the U.S. market?
Ms. Grunder. Thank you, Congressman Royce. The State
Department has stood up the Cultural Heritage Coordinating
Committee in response to the sense of Congress in the
legislation from last summer, and we have had three meetings of
that senior interagency committee since last summer.
I think it genuinely has increased coordination among our
agencies at a senior level. One result that I would highlight
is a recent agreement between the Smithsonian and the State
Department to fund a project in northern Iraq to do emergency
stabilization at the site, the ancient site of Nimrud.
Mr. Daniels. Sir, thank you for drawing attention to the
Protect and Preserve International Cultural Property Act and
your bipartisan leadership with Mr. Engel on this particular
issue.
I also want to emphasize just the importance of the
increased coordination capacity that has increased across the
interagency after the CHCC was stood up.
What I also want to add in this regard is that the Protect
and Preserve International Cultural Property Act was specific
to Syria and looted material from Syria in order to choke off
the Daesh funding. There are, of course, other countries
experiencing conflict. Afghanistan, Nigeria, and South Sedan
all have looting issues, and all have antiquities that have the
potential to enter the flow of commerce.
I recently returned after a prolonged trip to Europe
speaking with law enforcement. And after my conversations in
those meetings, I am at this point almost more concerned about
the nexus between looting and al-Qaida and Afghanistan than I
am about Daesh and Syria and Iraq. But there is no protection.
There are no import restrictions for Afghanistan.
Mr. Royce. Thank you.
Any other commentary?
Mr. Villanueva. Sir, as far as the different topics, I will
defer to my colleagues. No further comments from law
enforcement.
Mr. Royce. Thank you, Mr. Chairman. I appreciate it, and I
yield back.
Mr. Pittenger. The gentleman yields back.
The Chair recognizes Mr. Gottheimer for 1 minute.
Mr. Gottheimer. Thank you, Mr. Chairman. And thank you, Mr.
Ranking Member, and all of the witnesses for appearing today.
Mr. Villanueva, late last month, The Wall Street Journal
quoted a former customs officer in New York, who handled more
than 16 antiquities seizures saying, ``It is still surprisingly
easy to smuggle stolen objects here,'' pointing to the use of
courier services, air cargo, and even stashing objects in
passenger luggage.
What additional steps is DHS, ICE, or TSA taking to disrupt
and prevent this pathway into the lucrative U.S. market? Thank
you.
Mr. Villanueva. Thank you for the question, sir. As we
mentioned: training. Training capacity building is paramount to
what we do, understanding this crime and the smuggling, the
routes, the techniques, concealment, what have you, is
important to both investigators and to Customs and Border
Protection working at the front lines.
So we bring the CBP officers to training. We talk about the
different concealment techniques. We talk about the
investigative side of the houses. We talk about the handling
and the preservation of the pieces. We also work with the
interagency and with our international partners to learn about
the pieces that are out there in the market, whether the great
market or the legitimate auction houses that might be coming
through the border, so that when our officers come across with
that piece, a red flag goes up.
So there are actually actions in place. There are efforts
underway through Customs and Border Protection, Immigration and
Customs Enforcement using our border search authority to
prevent that.
Mr. Gottheimer. Thank you, Mr. Chairman. Thank you.
Mr. Pittenger. Thank you. The gentleman's time has expired.
We regretfully must adjourn this hearing. Thank you so much
for being with us today and for your wise counsel.
The Chair notes that some Members may have additional
questions for this panel, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
[Whereupon, at 10:25 a.m., the hearing was adjourned.]
A P P E N D I X
June 23, 2017
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