The UK government introduced significant changes to its financial sanctions framework, effective 14th May 2025. This includes the addition of Art Market Participants (AMPs) being named as ‘relevant firms’ under Sanctions Law (the Sanctions and Money Laundering Act 2019). These reforms aim to strengthen regulatory oversight, expand compliance requirements across multiple industries and refine enforcement mechanisms to prevent sanctions violations.
Expanded sectors named under Sanctions Law
Under the new rules, other sectors will be required to report potential sanctions breaches:
- Art Market Participants (AMPs): Galleries, auction houses, and dealers will be brought under the mandatory reporting framework to prevent money laundering through cultural assets.
- High-Value Dealers (HVDs): Businesses dealing in high-value assets like art, jewelry, and antiquities must now report potential breaches to curb illicit financial flows.
- Insolvency Practitioners: Professionals handling corporate insolvencies must notify OFSI if they identify sanctioned assets or individuals involved in proceedings.
- Letting Agents: Real estate professionals will now be responsible for reporting interactions with sanctioned persons to reduce risks in the property market.
Threshold clarification
The threshold for reporting has also been updated. Instead of vague reporting requirements, businesses and individuals must report to OFSI when they “know or have reasonable cause to suspect” that someone is subject to financial sanctions. This adjustment is designed to reduce ambiguity and ensure more consistent compliance.
New reporting obligations
A key update affecting AMPs is the formal requirement for annual reporting of frozen assets. UK-based individuals and businesses holding assets subject to financial sanctions (‘frozen assets‘) must submit a report to OFSI by 30th November each year. Non-compliance without reasonable justification will now be considered a regulatory offense, leading to financial penalties. This change is aimed at increasing transparency and making it easier for regulators to track sanctioned assets.
Licensing grounds for corporate insolvency and restructuring
Less impactful for the vast majority of AMPs is the new licensing grounds for transactions related to corporate insolvency and restructuring. OFSI will now be able to issue licenses allowing transactions involving designated individuals – provided that any financial transfers are directed into frozen accounts. This ensures compliance with sanctions laws while allowing for controlled financial operations in complex corporate scenarios.
In conclusion
The May 2025 reforms mark a significant shift in the UK’s financial sanctions regime. With broader reporting requirements and clearer compliance, businesses must be alert and take action when necessary to stay ahead of the changes and avoid potential penalties.
Further reading
- The Sanctions (EU Exit) (Miscellaneous Amendments) (No. 2) Regulations 2024 (2024 no. 1157): https://www.legislation.gov.uk/uksi/2024/1157/made/data.pdf
- OFSI: FInancial sanctions guidance for High Value Dealers and Art Market Participants: https://www.gov.uk/government/publications/high-value-dealers-art-market-participants-guidance/financial-sanctions-guidance-for-high-value-dealers-art-market-participants
- Annual frozen asset review: guidance and reporting form: https://www.gov.uk/government/publications/annual-frozen-asset-review-and-reporting-form
- New frozen asset reporting requirements: What Art Market Participants need to know: https://artaml.com/reforms-in-uk-sanctions-law-what-art-market-participants-need-to-know-about-new-frozen-asset-reporting-duties/