HMRC as the UK’s regulator for money laundering has published risk guidance. The findings are the result of getting to know specific situations faced by the industry.
The publication presents two tables that show:
> Risks common to all Art Market Participants
> Risks relating to the Money Laundering Regulations (relevant for the art sector)
It finishes with a comment dedicated to high-risk jurisdictions, with this being such a great area of exposure for the international art market.
Risks common to all AMPs:
> A potential sale or purchase of art does not appear to be normal business practice, have a valid commercial reason or makes no economic sense.
> Anonymity with the buying and selling of artwork.
> Payment from high-risk jurisdictions*.
> Remote sales compared with other sales.
> Criminals take advantage of unwitting legitimate businesses.
> The customer asks for the art to be delivered in an unusual manner or to an address that is not their own.
> A business wants to conduct a sale or purchase of art in cash for an ‘off the record sale’.
> A new customer with little or no trading history and no trade references.
Risks relating to the Money Laundering Regulations (for the art market):
> Customer due diligence (CDD) and reliance*.
> Art and linked transactions.
> Data protection.
> Dealing with an unregistered AMP*.
> Online sales verification*.
> Renting of art.
> Interior designers*.
> Customer due diligence and reliance: Important clarity from HMRC to support your compliance.
> Might you (unknowingly) be an Art Market Participant? (Also addresses dealing with unregistered AMPs and interior designers.)
> Spotting fake IDs: A new reality for the art market?