AML/CFT in Art Market AML/CFT (Anti-Money Laundering and Countering the Financing of Terrorism) regulations are increasingly being applied to the art and antiquities market due to the high risk of illegal activities such as money laundering, tax evasion, and terrorist financing.
The art and antiquities market is highly susceptible to illicit activities due to its opaque nature and the use of cash transactions. Criminals may use art and antiquities to launder money by purchasing them with illicit funds and then selling them at a higher price to legitimate buyers, thereby legitimizing the proceeds of their illegal activities.
To counter this, many countries have introduced regulations that require art dealers, auction houses, and other entities involved in the art and antiquities market to conduct due diligence checks on their clients, verify the source of funds, and report suspicious transactions to the relevant authorities.
In the United States, the Bank Secrecy Act (BSA) requires art dealers and other entities in the art market to comply with AML/CFT regulations. The BSA requires art dealers to report cash transactions over $10,000 and to file suspicious activity reports (SARs) if they suspect that a transaction may be related to money laundering or terrorist financing.
Similarly, in the European Union, the 5th Anti-Money Laundering Directive (5AMLD) was implemented in 2020, which includes specific provisions for the art and antiquities market. It requires art dealers and other entities to conduct customer due diligence and to report suspicious transactions to the relevant authorities. Overall, AML/CFT regulations in the art and antiquities market are becoming increasingly important as countries seek to prevent the market from being used for illegal activities. It is essential for art dealers and other entities involved in the market to be aware of their obligations and to take steps to comply with AML/CFT regulations.
Read latest article from the FATF:
Money Laundering and Terrorist Financing in the Art and Antiquities Market (fatf-gafi.org)
