On 12 March 2025, the Office of Financial Sanctions Implementation (OFSI) issued the Financial sanctions guidance for High Value Dealers & Art Market Participants (the Guidance) regarding compliance with new reporting obligations, which will come into force in May 2025.
As set out in the Guidance, OFSI recognises that the UK is a “major international hub” for auctioning and trading numerous luxury goods, including art, antiques, precious metals, gemstones, wine and whisky. The UK is stated to account for 17% of the global market in art sales (equating to USD 11.5bn). Furthermore, in 2022 alone, the UK issued registration to over 36,000 luxury cars.
OFSI is focused on potential circumvention of sanctions in the luxury, art and high-value goods sectors. This has led to new reporting requirements that will apply to any firm that during the course of its business has come to know or has had a reasonable cause to suspect that a person is sanctioned or has committed a sanctions breach in relation to:
- any transaction (or series of transactions) of over EUR 10,000 (in cash for high value goods); and/or
- any transaction (or series of transactions) of over EUR 10,000 for artwork (including NFTs); and/or
- the storage of artwork valued at over EUR 10,000;
- trading in digital assets and NFTs.
Failing to make a report is itself an offence, which could lead to imprisonment for up to 6 months and a fine. If a wider breach of sanctions has been committed, OFSI can impose a fine of up to £1m or 50% of the total value of the breach and refer the matter to law enforcement agencies. A conviction on indictment for a breach of sanctions can result in imprisonment for up to 7 years.
These sectors have long been targeted by individuals seeking to launder money, and the methods they use have become sophisticated and complex. It is important for firms to ensure that they have a strong compliance programme and culture, to undertake thorough enhanced due diligence, to conduct regular sanctions checks and to understand the “red flags” surrounding transactions.
The Guidance and the accompanying webinar recommend that firms operating in this sector obtain independent legal advice, design and implement robust compliance processes, train staff and ensure reporting obligations are met.
Gherson have a specialist sanctions team who are well versed in this complex area and can assist with all of your sanctions compliance and reporting needs.
Updated: 14 February 2025
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