Reported by ELEANOR MYERS

London’s art market is the third largest in the world, accounting for 17 percent of global sales in 2023, and just behind China, which mostly relies on Hong Kong.

But experts fear Britain’s fresh anti-money laundering (AML) clampdown will send the city tumbling down the list. Although they were introduced a few years ago, it’s only in the past year that the British government has started to clamp down aggressively, according to industry experts.

The United Kingdom taxman now requires art market participants to register with them for money laundering purposes and follow strict new rules if they sell works worth more than €10,000 — or if they operate a customs warehouse storing works of art above that value.

At the heart of the financial crime rules, inherited from the European Union after Brexit in 2020 but adapted to fit the U.K. art market in 2021, is an obligation for sellers to know who their buyers are, requiring proof and verification of identity.

The real owner

Across the Atlantic, the U.S. lacks regulation, despite art being well documented as a vehicle for money laundering.

“The art industry currently operates under a veil of secrecy allowing art advisers to represent both sellers and buyers masking the identities of both parties, and as we found, the source of the funds.  This creates an environment ripe for laundering money and evading sanctions,” said Tom Caper, a U.S. senator from Delaware, speaking in 2020 upon the release of a report, which found that the art market was “the largest legal, unregulated market in the United States.”

It’s exactly that veil of secrecy that the U.K.’s rules seek to prevent. Beneficial ownership rules, which concern who will ultimately own a piece of art, include any companies or trusts that may be used to purchase it. It’s a key tenet of the U.K.’s anti-money laundering plan

Read full report: https://www.politico.eu/article/britains-art-loving-elite-fumes-at-money-laundering-crackdown/