Art Dealers Push Back Against the European Union’s New Money-Laundering Regulations
Dealers will now have to verify the identity of clients buying work for €10,000 or more.
The European Parliamant has voted to adopt tighter regulations for the art market in an effort to combat money laundering. The proposal, known as the “Fifth Anti-Money Laundering Directive,” was implemented in Brussels on April 19, reports Anna Brady in The Art Newspaper.
The new rules aim to bring “more transparency to improve the fight against money laundering and terrorist financing across the European Union,” according to a statement by a group of Parliament leaders. They follow earlier anti-money laundering initiatives introduced in June 2016, in the aftermath of terrorist attacks in the EU as well as the financial dealings exposed by the Panama Papers leak, they said.
Dealers will now have to verify the identity of clients buying work for €10,000 ($12,130) or more, according to the TAN report. While previous anti-money laundering provisions pertained only to cash payments, the new regulations extend to all payment methods. The regulations will take effect in 2019.
Some dealers predict that the new rules will make business transactions unnecessarily complicated, and at least two organizations are pushing back. The International Confederation of Art and Antique Dealer Associations (Cinoa) argued in a position paper that the regulations put “an unacceptable burden on the art market business,” and that the measures are disproportionate to the risk.
“A threshold of €10,000 means that far too many art and antiques market transactions would be caught by the measures. For example, more than a quarter of all paintings and sculptures sold by dealers are priced at $50,000 or more and a fifth of such works sold in European auctions are priced at $10,000 or more,” the paper says. CINOA representatives did not immediately responded to a request for comment.
The British Art Market Federation also opposes the stricter standard. Their main concern now is to “work with the government to minimize the administrative effect on small businesses,” BAMF chairman Anthony Browne told TAN. The extension of the directive to cover all payment methods, rather than just cash, “will bring almost all BAMF member businesses into the regulated sector,” he says.
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