In FT Adviser Article, Partner Tristan Dollie Examines UK Art Collector Alert

Partner Tristan Dollie wrote an article for FT Adviser explaining the financial obligations within the art market as it pertains to a U.K. National Crime Agency (NCA) amber alert about financial sanctions and money laundering within the industry.

In the March 18 article, Dollie noted that the alert is highly relevant to private collectors, serving as a reminder about the importance of their due diligence and anti-money laundering obligations. Among those responsibilities, he wrote that collectors should keep in mind the changes in client circumstances, transfers of ownership of art between connected parties, transactions involving sales in a short period of time, entities making payments to the service provider on behalf of clients, shell companies, stolen art and transactions involving intermediaries.

“The motivation behind the key indicators is right and proper, but what the NCA has failed to acknowledge is that some of these key indicators are more often than not entirely legitimate,” Dollie wrote. “Art market professionals will understandably be hot on their due diligence – and rightly so, but they need to consider circumstances holistically and not simply through the key indicator looking glass.”

Private collectors will, inevitably, be subject to more administrative barriers when dealing with their collections from a wider range of art sector service providers such as shipping/transport companies, insurance providers, agents, brokers, lawyers, accountants and finance providers, so private collectors need to be prepared, Dollie noted.

Those private art collectors should keep a complete “know-your-customer” pack readily available, use the same art market professionals, build flexibility into the timeframe of completing a sale and ensure the provenance for the relevant piece is as comprehensive as possible.

“Private collectors can use these regulations and due diligence processes to their advantage, to select which art market professionals to work with and to mitigate the risk of a collection being subject to investigation and, possibly, freezing orders because of a collection’s link to a disreputable art adviser,” Dollie wrote. “[W]hile the alert does not introduce any new legal or regulatory requirements, it does make clear that those directly facilitating the art market, particularly storage and sales, do have obligations to undertake extensive due diligence on their clients.”

Read the full article here.