Since 10 January 2020, UK art market participants have been covered by the Money Laundering Regulations 2017, which brought dealers and intermediaries into the same anti-money-laundering regime as banks and estate agents. The rules apply to transactions in art worth €10,000 or more, whether in a single deal or a series of linked deals. HMRC is the supervisor, and participants must register with it.
An art market participant is any business that trades in, or acts as an intermediary in, the sale or purchase of works of art where a transaction reaches €10,000 or more. That captures galleries, dealers, auction houses and agents, whether the art is sold outright or through linked transactions. If you buy or sell art at that value in the course of business, the rules apply to you.
Participants must carry out customer due diligence to establish who they are dealing with, assess the money-laundering risk of each transaction, and keep records that show the checks were done. Higher-risk cases require enhanced due diligence, including on the source of funds. Suspicious activity has to be reported to the National Crime Agency through a Suspicious Activity Report.
Art transactions are unusually hard to screen, because they can involve anonymous buyers, opaque ownership histories and cross-border movement, any of which can hide the source of funds. HMRC has reported that only 19% of art market participants are fully compliant, which shows how far practice lags the rules. The difficulty is that four separate questions, the client, the object, the money and the route, all have to be answered together.
Tessera screens the client, the object, the money and the route in one platform, producing a single explainable risk score and one audit trail that shows HMRC the checks were done. If HMRC asked to see the due diligence on your last high-value sale, could you produce it in minutes? Book a demo and screen a real transaction end to end.