new anti money laundering rules
In 2018, the 5th European anti-money laundering directive was introduced. The intent of European Union is always to combat money laundering in all areas, including the art market.
In the last year and a half it has been as if the world had been put on hold by the pandemic. But, despite this, the art market has not suffered any setback, on the contrary, it has recorded unexpectedly extraordinary sales.
The data show an important recovery for the art sector, which is returning to its most glorious days. A market that attracts not only art lovers, but also, unfortunately, the bad guys who exploit the flaws in the system.
The financing of terrorism and money laundering are still widespread phenomena today.
The value of the stolen art is estimated by Deloitte at between $ 4 and $ 6 billion annually.
Most of the countries of the European Union and the United Kingdom have integrated the Directive into national laws. There are important changes compared to the previous directives: it is envisaged that every art trade is subject to the directive in the event that the value of the operation, even if divided or composed of several related operations, is equal to or greater than 10,000 euros.
In October 2019, through Legislative Decree 125/2019, Italy accepted the European directive. The law is therefore applied to all “subjects who carry out trade activities in ancient things and works of art, or who act as intermediaries in the trade of the same works, even when this activity is carried out by galleries of art or auction houses or inside free ports “.
However, art dealers point out that the government is barely requiring market players to adhere to the new requirements: anti-money laundering risk self-assessment (anti-money laundering solutions) and due diligence checks.
Institutions are obliged to report dubious behaviour to the authorities. However, the communication regarding the behaviour to be followed did not take place adequately and the procedure to follow is still unclear. It is certainly not easy to move in these situations. Furthermore, who should be responsible for ensuring that the art market adheres to the new legislation, if an authority has not yet been designated to control the process?
The UK, for example, has implemented the 5th European Anti-Money Laundering Directive much more strictly than the rest of Europe.
The operators of the art market are ‘obligated subjects’ and must strictly comply with the regulations against money laundering.
every operator in the art market was obliged to register with the competent authority, the HMRC, by June 2020.
In order for registration to take place, all the clauses of the 5th Directive had to be met, including the execution of the various procedures and the appointment of an Anti-Money Laundering Officer (known as Money Laundering Reporting Officer).
All institutions participating in art fairs in the UK are required to respect and strictly follow local regulations.
Non-adherence to the Directive entails very heavy penalties: sentences of several years in prison, high fines and damage to reputation.
The changes made in the art world in the UK have been welcomed and implemented very quickly.
The process of change and adaptation is still ongoing, and certainly the British system is not perfect, but it shows how the introduction and practice of rules are the right solution for safeguarding the market.
These procedures ensure that art market participants can interact in a safe and protected environment, creating a mechanism based on transparency. To know more: Art market money laundering crackdown spreads from UK to the US, but what impact is it having and are businesses taking it seriously? (theartnewspaper.com)
