High-value dealers and art market participants in the UK will face new mandatory compliance and reporting obligations from spring 2025 following the government’s extension of financial sanctions to the art trade.

From 14 May 2025, the list of ‘relevant firms’ subject to financial sanctions reporting requirements will be expanded to include high-value dealers and art market auctioneers.

Financial sanctions prevent an individual or firm from carrying out transactions with a particular person or organisation that may be guilty of criminality or pose a risk to national security.

Under the new rules that come into force in May, if there is evidence, or reasonable suspicion, that a client has broken financial sanctions rules, art market participants must make an official report to the HM Treasury Office of Financial Sanctions Implementation (OFSI).

“Extending reporting obligations to this sector will facilitate OFSI’s aim of encouraging better sanctions compliance, as well as improving OFSI’s understanding of how financial sanctions are being implemented in the impacted sector, raising impacted businesses’ awareness of their sanctions obligations, and assisting OFSI in identifying potential circumvention gaps and financial sanctions breaches,” said an OFSI guidance paper, published in November 2024.

The UK is a major international hub for the trade of high-value goods, including artworks. 

In 2023, global art sales were USD65bn, with the UK having the third largest share at USD11.05bn, accounting for 17% of the world market, according to figures cited by OFSI.

The UK plays a significant role in the global auction market, ranking third in the world in 2023 with a market share of 12%.

OFSI has identified a variety of techniques used in the art market sector to attempt to circumvent and evade UK financial sanctions. These include:

• The movement of assets and funds being disbursed offshore.
• Lack of clarity over the source of the payment or funds.
• Concealment of the ultimate beneficial owner of the goods.  
• Transactions being made through offshore accounts.
• Intermediaries and shell companies being used to source, buy, or sell high-value goods.
• The ability for individuals and entities to conduct business discreetly.

According to OFSI, a ‘high-value dealer’ is defined in sanctions regulations as “a firm or sole trader that trades in goods (including an auctioneer dealing in goods), when the trader makes or receives, in respect of any transaction, a payment or payments in cash of at least 10,000 euros in total, whether the transaction is executed in a single operation or in several operations which appear to be linked”. 

Art market participants and other sole traders and firms affected by the new reporting rules must implement a strong sanctions compliance programme proportionate to the risk that is faced.

Ongoing compliance training and resources should continue to be provided to relevant employees and other personnel.

More guidance is available on the OFSI website.

The new reporting obligations are being introduced as part of the art market’s anti-money laundering (AML) obligations. For more information, click here.

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