New UK legislation came into law on Friday requiring galleries and auction houses to verify the identity of clients buying art over €10,000 (£8,570) and also report suspicious activity to the government. Adopting the EU’s 5th Anti-Money Laundering Directive (MLD5) into The Money Laundering and Terrorist Finance Amendments Regulations (MLRs) is designed to further regulate the notoriously opaque art trade, which can be prey to individuals laundering criminal money or financing terrorism through high-value items. Businesses affected by MLRs must register with HMRC by 10 January 2021.
The move is seen as part of an international effort to take action against money laundering with the EU and US drafting similar laws. When the legislation was proposed as early as 2018, there had been concerns expressed by opposing bodies. The British Art Market Federation and the International Confederation of Art and Antique Dealer Associations were worried about the sustainability of the legislation, especially with smaller businesses and also emphasised the potentially negative effect on the UK’s art industry.
13 January 2020