The government announced last week that it will introduce a new watchdog called the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) alongside updated Money Laundering Regulations.
Simon Kirby, economic secretary to the Treasury, said the new division, to operate within the Financial Conduct Authority (FCA) by the beginning of next year, will “bring the UK’s anti-money laundering regime into line with the latest international standards”.
Although specific details have yet to be announced, concerns have already been raised that this could lead to further red tape for law-abiding businesses.
Swathes of Regulation
LAPADA chief executive Rebecca Davies said: "Although we support the concept of a simplification of the anti-money laundering rules, they must be fit for purpose. The art market is already subject to great swathes of regulation and added bureaucracy simply results in poorer regulation, increased costs and reduced competition.”
Sean Kelsey art market legal consultant said the debate as to whether markets in art and antiques have a money laundering problem has been “raging for years” and that up until now “enforcement agencies haven't really had the appetite, resource, or capacity to try finding out.” But he warned this could all change and that “complacency has never really been an option, and it's clearly not about to become one”.
Becky Shaw, art lawyer at Boodle Hatfield raised the issue of further bureaucracy encouraging art deals to move overseas and said: “While some will welcome greater transparency to the art trade which has long been called for, others may object to further regulation which they may feel risks putting the UK at a disadvantage to other markets, and may cause deals to be done elsewhere.”
Some in the trade believe the art and antiques trade is already ahead of any planned crackdown. Joanna van der Lande chairman of the Antiquities Dealers' Association said the ADA has already re-written its code and that the “UK art market has been at the forefront in exercising stringent anti-money laundering measures for years now”.
But due diligence experts have welcomed further oversight which “adds to the UK's arsenal to combat money laundering and financial crimes”. Art Recovery Group chief executive Chris Marinello added: “It will be interesting to see if the UK follows the US (FBI's) lead of applying anti-money laundering regulations to those handling illicit antiquities.”
High Risk
Sectors that are deemed a high risk in terms of the potential of money laundering include ‘High Value Dealers’. This is a dealer who accepts more than €15,000 cash from buyers, either for one purchase, or as part of a series of linked purchases that total more than this. High Value Dealers are supervised by HM Revenue & Customs and have to register.
Mark Dodgson, secretary general at The British Antiques Dealers’ Association (BADA), said there are new regulations which are due to reduce this threshold to €10,000. Although there are very few BADA dealers who are classed as 'High Value Dealers', he added: “We don’t yet know whether the new changes and the watchdog will have any impact on this.”
Last month a group of Swiss art trade experts launched The Responsible Art Market Initiative which is a set of guidelines designed to crack down on money laundering in Switzerland.
