Fear & regulation in the art world
When a story about the art world hits the New York Times, it’s pretty much become mainstream.
The art world’s default position on change is a fear of the new. So naturally there is concern around new anti-money laundering regulations that affect all sellers of art over €10,000. Today, that’s UK sellers making a sale to any buyer in the world (artists thankfully were made exempt only last week).
Yet it’s here to stay, like it or not. Today the UK, (and some of the EU — it’s an EU directive), and tomorrow the US. The industry can argue it’s unfair, that it’s overkill, that most galleries know their clients and they are really nice respectable people, that it’s a sledgehammer to crack a nut. It doesn’t matter. The world is moving in the direction of increased compliance for high value transactions across every industry and the art market is an easy target for politicians and regulators.
Fortunately the solution is not that hard. Other industries have done it. Art Money is already doing it for every client purchase and payment we finance — tens of thousands of transactions over the last 6 years.
High end sellers — galleries and auction houses regularly selling works over say £1m/$1m should in my opinion run in-house programs. For everyone else, to the extent you can outsource it, which is all the hard stuff, you can and should.
I’ve seen a number of players in the market offering ‘advice’ and ‘risk analysis’. That’s great, yet only goes so far. As a business owner, I want more than advice that still leaves the hard decision to me. I want a decision. An actionable process. This is why the Art Money solution has been built to provide a practical, compliant, cost effective solution. So what is the Art Money solution?
Art Money Verified Buyer
Get verified once, use it everywhere
- Compliant with UK anti-money laundering laws
- Securely control your data
- Trusted, global, independent
Verified Buyer makes it easy for art buyers & sellers to comply with UK anti-money laundering laws for art sales over €10,000. From June 10 2021 sellers must register with HMRC and have a compliant program that includes verifying a buyer’s personal identity (KYC, Know Your Client) and source of funds (AML, anti-money laundering). Our solution allows collectors/buyers to provide their personal information confidentially, once, to a trusted HMRC compliant intermediary (Art Money) and for sellers to fulfil their compliance obligations without duplication of effort or having to make personally intrusive inquiries.
OK great, so what’s the plan? I’m a gallery/auction house, how do I sign up for this?
Art Money is rolling out a global solution. We will be launching in the UK in 2021 and will provide a similar program in the US (where we are already operating) in 2022 depending on how & when legislation is implemented.
For UK galleries, auction houses and art sellers, I’m sorry we are not yet launched and solving this problem today for you. We are very close. Fortunately we are in good hands working with Rena Neville, the industry’s leading authority on AML and author of 4pp on the topic in the Art Basel UBS Art Market Report 2021 (pp44–48). We are also in 1:1 contact with HMRC the UK regulator for this program (who I must say have been pleasingly receptive to industry input).
We look forward to becoming a partner of choice for the art world, seamlessly helping collectors & sellers navigate this new environment utilising the contemporary fin-tech and reg-tech tools we already work with every day.
Change comes slowly, then all at once. Especially in the art world.
We are here to help.