I. Introduction
“[S]ometimes a bank needs a justification for a wire, right? […] We can just say, Ohh, you are buying a painting. If they need justification, you know what I mean? You just be like, Oh yeah, I bought a, you know, Picasso drawing or something.” These remarks, recorded in March 2012 by the Federal Bureau of Investigation in the United States of America, were made by the New York gallery owner Helly Nahmad. At the time, he was being prosecuted for his role in an illegal gambling and money-laundering network worth over USD 100 million linked to Russian organised crime (ICIJ, The Art of Secrecy, 7 April 2016; see also Roth, Geldwäscherei im Kunsthandel, in: Mosimann/Schönenberger (eds.), Kunst & Recht 2014/Art & Law 2014, Bern 2014, pp. 43 ff., pp. 53 ff.). Admittedly, these allegations were never proven in court, and Helly Nahmad ultimately pleaded guilty only to the charge of operating an illegal gambling business (U.S. Attorney’s Office, Southern District of New York, 30 April 2014). The wording, however, speaks volumes: in the eyes of some, a work of art can provide the ideal cover for illicit financial flows, and thus be used for money laundering.
This phenomenon comes as no surprise. The constant tightening of regulations in the banking and financial sectors has led criminal circles to turn to other, less strictly regulated sectors, including the art market (Bastian, No. 537 and references cited; Roth, Kunst und Geld – Geld und Kunst, Schattenseiten und Grauzonen des Kunstmarkts, Bern 2020, p. 145). The discretion of over-the-counter transactions, the absence of objective prices, and the ease with which works of art can be transported and stored: these are all characteristics that make it a fertile ground for money laundering (Bastian, N 378 ff. and 429 ff.; see also Bowley/Rashbaum).
This naturally raises the question of whether Switzerland has the necessary tools to tackle such behaviour, and this is precisely the aim of this two-part article. The idea here is to provide the reader with an insight into two aspects: on the one hand, the criminal law provisions that enable this type of behaviour to be punished in Switzerland (Part I); on the other hand, the preventive measures designed to fight money laundering in the art market (Part II; to be published next week).
II. Article 305bisof the Swiss Criminal Code
Under Swiss law, money laundering is an offence punishable under Article 305bis of the Swiss Criminal Code (SCC). Article 305bis para. 1 SCC provides that “ Any person who carries out an act that is aimed at frustrating the identification of the origin, the tracing or the forfeiture of assets which they know or must reasonably believe originate from a felony or aggravated tax misdemeanour shall be liable to a custodial sentence not exceeding three years or to a monetary penalty.”.”
It remains to be seen how this offence, originally designed to combat drug trafficking and organised crime, applies to the art market. This first section therefore sets out to examine the constituent elements of this offence and their application to the art market.
i. The objective constituent elements
Firstly, with regard to the perpetrator, it should be noted that money laundering is a so-called general offence, which means it can be committed by anyone (KV KO II-Ackermann/Zehnder, Art. 305bis StGB, N 139), including, by definition, an art dealer (Bastian, N 1514; Roth, Kunst und Geld, p. 16); we shall return to this point.
Turning now to the subject matter of the offence: whilst the marginal note to Article 305bis SCC is limited to ‘money’, it must be borne in mind that this offence in fact covers any asset of pecuniary value, i.e. money, but also movable or immovable property (ATF 119 IV 59, para. 2b; FF 1989 II 961, p. 981 ff.; Bastian, N 1519 ff.). The decisive criterion is that the object in question must have commercial value and must, at least hypothetically, be capable of being confiscated. Its actual value, however, is irrelevant. Thus, a work of art fits perfectly within this concept (Bastian, N 1522 ff.; Cassani/Heninger, Kunsthandel und Geldwäscherei – neue Risiken, neue Sorgfaltspflichten, in Mosimann/Schönenberger (eds.) Kunst & Recht 2016/Art & Law 2016, Bern 2016, p. 75 ff., p. 78, Kern, Geldwäscherei im Kunsthandel, SJZ 2021, p. 381). It may be the direct product of a criminal offence (e.g. a stolen painting) or an indirect one (e.g. a painting purchased with money derived from drug trafficking).
However, that is not all. These assets must also derive from a prior offence, which must be a crime (i.e. an offence punishable by a custodial sentence of more than three years; Art. 10(2) SCC) or an aggravated tax offence (Art. 305bis para. 1bis SCC; since 1January 2016, the predicate offence has also included ‘tax fraud’ under Article 186 of the Federal Income Tax Act (LIFD) and Article 59(1) of the Federal Law on Municipal Taxation (LHID) where the taxes evaded exceed CHF 300,000 per tax period, see Federal Bulletin 2014 585, p. 650). In this regard, the Federal Supreme Court does not require strict proof of the predicate offence; it is sufficient to establish the circumstances with sufficient precision (ATF 138 IV 1, para. 4.2.2; ATF 120 IV 323, para. 3d); the offence may even have been committed abroad (Art. 305bis para. 3 SCC).
In the art market, typical predicate offences would include fraud (Art. 146 SCC), theft (Art. 139 SCC), but also aggravated tax offences (Art. 305bis para. 1bis SCC), and even the bribery of foreign public officials (Art. 322septies SCC). However, offences under the Act on the International Transfer of Cultural Property (LTBC) are merely misdemeanours (Art. 24 CPTA) or minor offences (Art. 25 CPTA) and cannot therefore, on their own, serve as predicate offences for money laundering. That said, trafficking in cultural property may often also be characterised as criminal offences, such as theft (Art. 139 SCC), and may therefore lead to the possible application of Art. 305bis of the SCC (Bastian, N 1558 ff.).
There remains, however, the central element of the offence, namely the commission of an act of obstruction (FF 1989 II 961, p. 983). Article 305biSCC penalises conduct that is specifically aimed at obstructing, at least in an abstract sense, a confiscation within the meaning of Article 70 SCC (ATF 127 IV 20, para. 3a; ATF 128 IV 117, para. 7a). More specifically, an act of obstruction is one that can sever the link between assets and their unlawful origins. The act of obstruction aims to “give the appearance of a lawful origin to assets of criminal origin” (Herren, Le blanchiment d’argent dans la jurisprudence des tribunaux fédéraux, PJA 2017, p. 1118). The objective of money laundering is therefore to create a distance between the assets and the predicate offence from which they derive; this distance may be geographical, personal, temporal or material (KV KO II-Ackermann/Zehnder, Art. 305bis StGB, N 416 ff.).
In the art market, the creation of such a distance can take a wide variety of forms (Bastian, N 1584 ff.). The simplest method involves purchasing a work of art using funds of criminal origin: the conversion of illicit assets—derived, for example, from drug trafficking—into an asset of a different nature, such as a work of art, is in fact an act that could be sufficient to sever the link between the assets and their origins. Cash payments, long tolerated in the art market, facilitated this type of transaction. Today, whilst the acceptance of cash payments is on the wane, money launderers have, in the meantime, found other, more sophisticated means of laundering funds in this market.
The use of offshore legal structures established in jurisdictions known for their lack of transparency (e.g. domiciliary companies, trusts, foundations, etc.), which are sometimes headed by a front man, makes it possible to conceal the identity of the actual purchaser and, consequently, the origin of the funds (Cassani/Heninger, p. 77; Bastian, N 1598 ff.). The case of the Modigliani painting held by the International Art Centre – a company revealed by the Panama Papers to be controlled by the family of Helly Nahmad – illustrates the opacity afforded by such structures (on this point, see https://lawofthearts.com/11fr/ ; Bastian, N 1599).
The price of a work of art, which is by its very nature subjective, can in turn be manipulated to better fit into money-laundering schemes: a work may be overvalued using false invoices to justify the inflow of a sum far exceeding its actual value, as in the Claude Guéant case in which two paintings valued at approximately EUR 30,000— had been invoiced at EUR 500,000 to justify a transfer of funds into the former French minister’s account (Roth, Gedlwäscherei, p. 58).
The sale may even be purely fictitious: a contract and an invoice attest to the sale of a work that is never delivered, or indeed does not even exist, in order to give the appearance of legitimacy to a transfer of funds (Bastian, N 1612 ff.). In Switzerland, the Federal Criminal Court (FCC) recently heard a case concerning the fictitious sale of ten paintings by the American artist of Greek origin, Theodor Stamos, intended to justify financial flows likely to have originated from acts of corruption. The authorities were, however, able to establish that this sale had never taken place, notably because the paintings were still in the seller’s possession and the invoices and contracts had been drawn up retrospectively (FCC, CA.2020.7 of 14 June 2023, upheld by the Federal Supreme Court, 6B_1180/2023 of 24 September 2025).
Moreover, a work of art is not merely a tool for money laundering: it can itself be the object of such activity. Where the work itself is the proceeds of a crime (e.g. theft), it constitutes an asset of criminal origin that is susceptible to money laundering. This is the case when the perpetrator produces forged certificates of authenticity or import, or even forged records of ownership, in order to give the work in question a lawful origin. In our view, this ‘laundering of provenance’ is also punishable, under certain conditions, under Article 305bis of the SCC (Bastian, N 1561 ff.).
ii. The subjective element
Finally, from a subjective perspective, money laundering is an intentional offence (Article 12(1) and (2) SCC; ATF 119 IV 242, para. 2b; Federal Supreme Court, 4A_653/2010 of 24 June 2011, para. 3.2.3). The intent must relate to all the constituent elements of the offence: the existence of a predicate offence, which has generated assets, and the commission of an act designed to obstruct their confiscation. Conditional intent is sufficient in this regard (FF 1989 II 961, p. 984; ATF 134 IV 26, para. 3.2.2); provided that the perpetrator assumes the assets may derive from a crime or a serious tax offence and is content with that outcome, intent may be established. By contrast, money laundering committed through negligence is not punishable.
iii. The criminal liability of art market participants
These factors help to define the criminal liability of art market professionals. The active involvement of an art dealer (e.g. a gallery, independent dealer or auction house) in a money-laundering operation – for example, by knowingly accepting assets derived from a crime as payment – remains rare in practice. Most professionals in the sector are honest. The main risk lies rather in passive involvement, particularly on the part of a dealer who, faced with warning signs (e.g. large cash payments, the use of complex legal structures, inconsistencies in the buyer’s behaviour), turns a blind eye and proceeds with the transaction. They could subsequently be accused of having participated in the money-laundering offence through conditional intent. The line between non-punishable negligence and punishable reckless intent is a delicate one in practice and will always depend on the circumstances of the individual case. Great caution is therefore still required to avoid any exposure to criminal sanctions and the resulting reputational risk.
III. Conclusion
It follows from the above that Article 305bisof the Swiss Criminal Code provides a sufficiently broad regulatory framework to address money laundering transactions that may occur in the Swiss art market. The difficulty lies less in the provision itself than in its implementation: the opacity and technical nature of the art market make detecting such transactions particularly challenging for criminal justice authorities. Furthermore, merely cracking down on such behaviour is not enough: it must also be prevented in order to safeguard the integrity and reputation of the Swiss art market. This is precisely the role of the Anti-Money Laundering Act (AMLA), the key instrument for preventing money laundering in Switzerland, which imposes due diligence obligations designed to detect suspicious transactions before they take place. The scope and limitations of the AMLA as it relates to the art market will, however, be the subject of the second part of this two-chapter article. So, see you next week.
Note: for an in-depth analysis of this topic, see the author’s doctoral thesis, available via Open Access. The sources cited here are not exhaustive and are provided for reference purposes only.