“The size of the sector, combined with a previous lack of consistent regulation, means the global art market has been an attractive option for criminals to launder money,” the Treasury’s risk assessment said.
As a high-risk threat, sellers must follow new rules including registering with tax authority HM Revenue & Customs (HMRC), writing a risk assessment to state how exposed they are to money laundering and carrying out customer due diligence before a transaction is concluded.
“Art is moved easily across borders. That’s the big advantage of art: A house in central London is a good investment, but you can’t take it with you,” explains Angelika Hellwegger, legal director at law firm Rahman Ravelli.
And although the rules began a few years ago, it’s this year that HMRC has picked up the pace on compliance. “As a company, we have had about three times as many clients receiving interventions from HMRC so far in 2024,” said the expert who works in art and anti-money laundering.
“It feels like the honeymoon period is over. The pace has been definitely accelerating, both in the number of galleries investigated and the strictness of implementation. Previously, they would ask: ‘Are you registered and were you doing the basics?’ And now their questions are much more aggressive and assertive.”
Financial penalties have already been dished out. Under the new regulations, between 2021 and spring 2023, 31 art market participants were fined for failing to register with HMRC. Between spring and fall 2023, 32 fines were issued. Figures for 2024 have not been released but art market participants speak of an even greater intensity.
