New programme announced to support the UK art market with its anti-money laundering obligations
Wednesday 10th March 2021 at 10am 0 Comments Visual Arts
A nation-wide training programme launches today, aimed at supporting galleries, artists and other ‘art market participants’ in meeting their obligations under the 5th Anti-Money Laundering Directive (AMLD5) which came into force in January 2020.
Developed and delivered by Creative United in partnership with London law firm Kingsley Napley LLP, AMLD5 and the Art Market is an Arts Council supported programme of free training sessions and workshops, offering practical advice to support art market participants to understand, assess and respond to their obligations under the regime. The initiative has also been backed by the Arts Council Northern Ireland, and Creative Scotland.
AMLD5 extends the current anti-money laundering legal framework to cover business activity taking place within the art market. The directive requires art market participants (AMPs) - galleries, auction houses, dealers and individual artists - involved in selling work directly to clients through single or linked transactions with the sale of goods in excess of €10,000 (c.£8.5k) to conduct due diligence, monitoring, and enhanced record keeping.
The update marks a considerable shift towards greater transparency, data management and regulatory control within the art market which has until now been unregulated and built largely on business practices that have relied heavily on high levels of trust and client confidentiality.
A breach of the regulations could leave AMPs at risk of public censure, prohibitions on managing the business, financial penalties and at its most serious, criminal prosecution for offences, which carry potential sentences of imprisonment.
Although AMLD5 came into law in the UK over a year ago, the deadline for registering with HMRC as an AMP was extended to 10 June 2021 to take account of the disruption being faced by the industry as a result of the Covid-19 pandemic. With the new deadline now just 3 months away, it is clear that large numbers of organisations whose business activities will be caught by the legislation have yet to fully understand or implement the systems and processes that will be necessary to ensure compliance and minimise the risks associated with selling high value works of art.
Mary-Alice Stack, CEO, Creative United said:
“As a Sector Support Organisation, we are committed to ensuring that artists, galleries and other enterprises within the visual arts sector are given the support they need to adapt their business practices to take account of their legal obligations under AMLD5.
To achieve this, it is essential that businesses at all levels of the market are given practical advice on how to comply. The vast majority of those affected by the new regulations are sole traders or micro-enterprises that simply do not have the financial resources or staff capacity to invest in meeting these regulatory requirements, which is why we are delighted to be working in partnership with Kingsley Napley to offer any AMP that needs it, free training and resources to guide them through this process.”
Suzanne Lyle, Head of Visual Arts, Arts Council of Northern Ireland commented:
“Many artists and galleries may be unsure of what the recent legislative changes mean for them and how it affects the way they do business. This free programme will be an opportunity for anyone involved in the sale of artworks to avail of the latest training and begin to make any changes needed before the June 10th registration deadline.”
Nicola Finnerty, Partner at Kingsley Napley said:
“Kingsley Napley is delighted to be involved in this project. The AMLD5 imposes additional obligations on AMPs to assess the risks of money laundering and terrorist financing which could arise from their business.
“There are potential civil and potentially criminal consequences for non-compliance, so it is important for AMps to be aware of these obligations and implement appropriate processes and procedures. The arts will be under greater scrutiny as a sector after the June deadline and HMRC will be looking to make examples of those not following the new rules. The training will help navigate the new AML landscape and demonstrate why and how AML compliance can become part of the culture of every arts-based organisation going forward.”
David Farrow, Head of Business Development, a-n The Artists Information Company said:
“As the largest artists’ membership organisation in the UK, a-n supports artists by providing them with professional development opportunities and the essential information they need for their business and creative practice. We support this new training programme so that those artists who will be affected by AMLD5 are fully informed about their obligations and the implications on their practice prior to the June deadline.”
Artist, Emily Allchurch commented:
“As an individual artist occasionally making sales direct to clients in the UK and internationally, I am concerned that the new AMLD5 regulations could affect me in the future. I am keen to understand more about the regulations, and I would really welcome the support of the programme to help me understand what actions I will need to undertake to be compliant.”
Andrew Leitch, Creative Industries Officer, Creative Scotland said:
“Creative Scotland understands how vital sales of work are to artists’ economies and this is especially true during the Covid crisis. We are therefore pleased to be working in partnership with Creative United to support the roll out of this vital training programme to ensure that the maximum number of galleries and artists in Scotland benefit from a clear understanding of the implications of the forthcoming AMLD5 regulations."
AMLD5 and the Art Market is backed by Arts Council England, Arts Council Northern Ireland, and Creative Scotland, and is open to all ‘art market participants’ based anywhere in the UK. A special session targeted at individual artists that may be caught by the regulation is being offered in partnership with a-n The Artists Information Company, the UK’s largest membership body for visual artists.
Registration for the training programme for all eligible AMPs is now open. Please visit the Creative United website here: http://bit.ly/AMLD5-and-the-Art-Market
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