Home › Trade Based Financial crimes News › Art traders likely to become obliged entities in UK’s AML/CFT money laundering act

Art traders likely to become obliged entities in UK’s AML/CFT money laundering act

By Mark Ford on August 2, 2021

Art market participants, including freeport operators that store works of art, are likely to become obliged entities in the UK’s key piece of anti-money laundering and counter financing of terrorism (AML/CFT) legislation, the Money Laundering Regulations 2017 (MLRs).

The UK has published a consultation paper on amendments to be made by statutory instrument in spring 2022 to the MLRs and considers amendments required to ensure that the UK continues to meet international standards and to clarify ambiguities following Brexit.

Compatible with EU

The paper contemplates bringing the art sector into the scope of the MLRs in line with the expansion of obliged entities under the 5th EU Anti-Money Laundering Directive.

It expanded its scope to include persons trading or acting as intermediaries for art work transactions exceeding €10,000 (US$11,881) including, but not limited to, art galleries, auction houses, and freeports.

Market participants

Art market participants are firms or individuals who trade in, or act as an intermediary in the sale or purchase of works of art when the value of a transaction, or a series of linked transactions, amounts to €10,000 or more.

Participants also include operators of a freeport when it, or any other firm or individual, by way of business stores works of art in the freeport and the value of the works of art so stored for a person, or a series of linked persons, amounts to €10,000 or more.

Artists excluded

A firm or individual will not be an art market participant under the regulations in respect of a transaction in which they sell or act as an intermediary in the sale of a work of art created by that individual, or by a member of that firm.

The closing date for comments on the consultation paper is 14 October 2021.

The UK’s consultation paper, Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 Statutory Instrument 2022, can be found here.