As we celebrate our sixth birthday this month, we take a look at the changing landscape of AML in the art market. This considers two aspects for each year covered: 1) legislation and implementation; and 2) our evolution to meet needs.
2018
Legislation and implementation
The EU votes to bring the art market into scope as a regulated sector with the Fifth Directive. EU member states are required to implement by 10th January 2020.
ArtAML™
Our co-founders, Susan and Chris, learn about the incoming legislation and immediately start working on solutions to help the art market deal with this new burden.
2019
Legislation and implementation: HM Treasury Consultation
UK HM Treasury publishes consultation: The Transposition of 5th Anti-Money Laundering Directive into UK Law.
ArtAML™: Become a Key Stakeholder
Susan and Chris respond to the HMT consultation and meet with a Treasury representative to discuss. We commence regular meetings with HMRC’s Art Market Participant team and become a Key Stakeholder for AML the UK art market. The team starts to grow beyond the CEO, CTO and developers, initially with an operations manager, finance manager and chief financial officer.
2020
Legislation and implementation: Transactions over €10,000+
Amendment no. 1511 2019 brings the art market into scope under the Money Laundering Regulations (UK) law as of 10th January 2020: Businesses that transact at €10,000+ in works of art are required to comply.
The British Art Market Federation (BAMF) Guidance is made available on gov.uk, thereby providing initial clarity on how AML compliance applies to the sector.
The National Risk Assessment (NRA) is published and states that the art market is at high-risk of money laundering.
ArtAML™: Platform launch
Susan and Chris spend several weeks reviewing the BAMF Guidance in detail and accordingly map out our CDD solution.
Covid-19 sees the art market move online, which results in changes to our CDD solution to support a remote art market.
The team welcomes a digital marketing manager, and the beta version of our platform is launched in June, followed by the full product in December.
2021
Legislation and implementation
Art Market Participants are required to be registered for supervision by HMRC as the sector’s regulator by 10th June 2021 to continue transacting at €10,000+ in art.
Later the same month, HMRC’s Risk Guidance (‘Understanding money laundering risks and taking action for art market participants’) is published, providing clarity on questions and risks.
ArtAML™: Introduce Training and AML Risk Assessment & Policy
We expand our services to include AML Training and AML Risk Assessment & Policy. Susan and Chris respond to the U.S. Treasury consultation.
2022
Legislation and implementation: Luxury Goods Ban
The U.S. Treasury decides to not yet introduce AML to the art market.
Russia invades Ukraine, which triggers the Luxury Goods Ban to be implemented in the UK, U.S. and EU.
The BAMF Guidance receives significant updates including: requirements around conducting of customer due diligence (CDD) on suppliers; clarification of whom is a ‘customer’ on the buying side based upon who is issuing payment; and how online platforms (i.e., transactional marketplaces) can be in scope.
ArtAML™: Include Sanctions Screening
Following the Russian invasion of Ukraine and the corresponding changes to the financial sanctions landscape, we introduce standalone sanctions screening of both private individuals and companies. This is available to clients with CDD subscriptions at no additional charge.
2023
Legislation and implementation: HMRC start auditing Art Businesses
HMRC interventions of AMP businesses become a reality of the regulated sector.
In a widening of scope, interior designers are officially brought into scope as Art Market Participants when HMRC advises interior design trade associations of this.
Banks start a campaign of auditing art businesses’ AML compliance adherence.
ArtAML™: Support clients with HMRC Interventions
We support clients with HMRC interventions as well as banks’ audits of compliance adherence. After the initial tranche of HMRC interventions, our Compliance Team is welcomed to the business. Their initial focus is the development of our AML Risk Assessment & Policy product.
Our identification and verification solution for remote transactions stops defrauding attempts directed at art businesses.
2024
Legislation and implementation: New York businesses affected
Some art businesses in New York City are required to introduce AML compliance to start or continue banking at certain institutions.
ArtAML™: Support clients in New York
We support art businesses in NYC that are being required by banks to implement AML compliance.
As AMPs start to submit suspicious activity reports (SARs) in the UK, our team provides support for effective reporting.
In Conclusion
We are here every step of the way to guide your Art Business through the process of AML due diligence. To see how we can support you, get in touch or book a demo of our solution.