Overseas art traders and advisors participating in major upcoming international fairs in the UK such as Frieze London, Frieze Masters and the 1-54 Contemporary African Art Fair will have to comply with tough anti-money laundering (AML) requirements if they want to sell works of art.

New stringent AML obligations came into force in January 2020, two months before the UK’s first coronavirus lockdown, so these are the country’s first post-pandemic major international art exhibitions.

HMRC registration

To comply with the AML obligations, overseas galleries and art advisors participating in art fairs in the UK will initially have to register with the UK’s tax authority, Her Majesty’s Revenue and Customs (HMRC).

The UK’s AML regulations mirror the EU’s Fifth AML Directive, which applies across Europe, and go beyond.

AML steps

After registering with HMRC, each art market participant must conduct a proper AML risk assessment of its clients and business.

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.

Tough AML requirements

Based on the results of the risk assessment, participants must apply adequate AML policies, controls and procedures to their operations, including know your customer (KYC) and customer due diligence (CDD) checks on new and existing clients. Participants must also appoint a money laundering reporting officer and provide AML training for staff.

Finally, participants are required to keep records of their AML policies and practices, including the risk assessment and KYC/CDD checks.

HMRC guidance on money laundering supervision for art market participants can be found here.

Categories: Trade Based Financial crimes News

Tags: AML, anti-money laundering, Art trader, CDD, EU, HMRC, KYC, UK