UK National Risk Assessment 2025: Art market downgraded from high to medium risk of money laundering

July 31, 2025

by ArtAML™ Team

The UK’s 2025 National Risk Assessment (NRA) has been released. Art Market Participants (AMPs) have been downgraded from HIGH to MEDIUM risk for Money Laundering, with key vulnerabilities outlined.

Background

In 2020, when the NRA was last published, AMPs were considered HIGH risk for Money Laundering and LOW risk for Terrorist Financing. At that time, the sector had only recently come under regulation, and there was limited data available to assess its true exposure.

The NRA 2020 stated of the art market,

“…the ability to conceal the beneficial owners and final destination of art make it attractive for money laundering”

Downgrade in risk

Now with five years of regulatory oversight and reporting, AMPs continue to be classified as LOW risk for Terrorist Financing, while the risk of being the target of Money Laundering has been downgraded from HIGH to MEDIUM.

Susan J Mumford, CEO and co-founder of ArtAML

, says:

“The 2025 National Risk Assessment is instructive, drawing on five years of regulation in the AMP sector. The ‘medium’ risk rating appears proportionate, with both vulnerabilities and mitigations clearly outlined.”

Vulnerabilities are still present

With 1,337 AMPs registered for supervision with HMRC as of March 2025 (up from 208 in 2020) and active regulatory enforcement underway, art businesses’ controls continue to improve. This latter point is key to prevent and detect economic crime targeting the sector.

Key vulnerabilities that persist include and are not limited to:

High-value transactions;
The ability of artworks to appreciate in value over time;
Enjoyment and status associated with art ownership;
The use of intermediaries; and
Cross-border transactions.

Improvements to be made with compliance and reporting

HMRC as Regulator for AMPs has identified common compliance issues, notably:

Insufficient business-wide AML Risk Assessments; and
AML Policy (incl. policies, controls and procedures).

For the latter, it is clear from regulatory enforcement that AML Policies need to be in alignment with what businesses are actually doing day-to-day in the conducting of customer due diligence.

Moreover, SAR reporting and registration with the UKFIU’s SARs portal, i.e., the National Crime Agency (NCA), is low compared to being at MEDIUM risk of being the target of Money Laundering. After all, a key point of regulating the sector is reporting, since that provides key data to authorities who can investigate and take action. Therefore, it is paramount that AMPs report suspicious activity going forward, with the understanding that this requirement exists regardless of a transaction proceeding.

In Conclusion

The UK art market is a significant economic and cultural sector with inherent Money Laundering and Terrorist Financing risks due to high-value, portable, and often opaque transactions. While regulation has matured since 2020, compliance gaps persist, particularly with AML Risk Assessments and Policies as well as NCA registration and reporting. Clearly, ongoing education of AMP businesses is key to risk mitigation.