Traffic in Stolen Artwork Faces Attack : Insurance: Police in Europe fear that theft will increase when border controls are dropped next year.

Police fear that trafficking in stolen art will leap when the European Community dismantles border controls next year, making it easier for thieves to skip between countries.

Police will still need special permission to follow up a theft in another country--and this can take weeks “while the criminal just goes,” said Detective Richard Ellis of the Art and Antiques Squad at London’s Scotland Yard police headquarters.

“There already is a problem and it certainly will increase after 1992,” he added.

Art theft is a global problem, with the annual trade in stolen items estimated at between $860 million and $2.6 billion.

Trace, a journal listing missing goods, says that more than 60,000 works of art were stolen within the European Community in 1990. Britain loses up to 5,000 paintings a year. In the last 20 years, 245,000 works of art were stolen in Italy.

Police and art experts say the volume will increase when border controls are dropped under the EC Single Market Act of 1992.

Because the value of paintings, silver and antiques has risen faster than inflation, art theft ranks second to drugs as the most lucrative criminal activity.

“Stolen art is a good market to launder money,” said Ellis.

“If you have a bundle of money which has been acquired through a drug sale, you can go to an auction, buy in cash and then use it as collateral. You can recoup the money later on with a receipt. Then you have clean money.”

A painting can be deposited in a bank in Switzerland where, after five years, a missing masterpiece becomes the property of the owner, provided that he is not the thief. While there, the picture can be used as collateral.

One picture remained with a Mafia family for 20 years and was used as collateral in drug deals.

London is the hub of the world’s art market and one of the centers where stolen art works change hands. Stolen goods, so long as they are not well-known masterpieces, can be sold undetected at one of the city’s many auction houses.

British laws governing the import and export of antiques are less restrictive than in other European countries, making London doubly attractive for art thieves.

Because recovery rates for stolen art are low--virtually zero for movable items such as silver and small antiques--the insurance and fine art industries have decided to fight back by forming a centralized computer register for stolen goods.

The object of the London-based Art Loss Register is to deter art theft and trading in stolen art, aid in the recovery of art and try to keep insurance premiums low.

The register, which charges a fee for each item entered in its computers, has had 1,000 thefts reported since it began in January.

“Increasingly, art has become a movable currency and as the barriers come down, this will be easier because there will be no customs control,” said Florence Hardinge, the Art Loss Register’s marketing director.

The register, which also has offices in New York, had a resounding success in August when six paintings valued at up to $138,000 were recovered by police 10 days after they were stolen from offices in London.

Police have free access to the Art Loss Register’s computers and officers were able to recognize the pictures when they raided a house in north London.

Hardinge said the Art Loss Register was setting up a system for auction houses to check their catalogues against a special archive. She hopes this will improve recovery rates.

The register will enter items only valued at more than $1,700 but Hardinge says: “We would register Michael Jackson’s shoes because they have a value attached to them.”