“Although it is good practice for buyers to exercise due diligence on the artwork and its seller before purchasing, as customers, buyers are not required to carry out checks. anti-money laundering on their sellers, âJasani said. “When an AMP buyer buys for resale, the buyer must perform anti-money laundering checks on the end buyer.” Thus, if a Paris-based dealer buys a â¬ 50,000 painting at auction on behalf of an Italian collector, they will have to perform an AML due diligence on the collector before finalizing the sale.
Additional steps required from the non-AMP collector include providing personal identification documents and proof of address, as well as identifying the beneficial owners of companies, trusts, special purpose vehicles and organizations to AMP s ‘they buy through such a structure. While complying, collectors should always be careful not to transfer this information electronically without encryption – compliance should not become an exposure to fraud or identity theft. Additionally, the EU General Data Protection Regulation (GDPR) 2018 guarantees a minimum level of privacy protection for involved MPAs in Europe and the UK.
Along with this, AMP is required to do a minimum of due diligence research on collectors who buy from them to ensure that they do not generate red flags. Therefore, collectors should expect their dealers, advisers and auction house contacts to ask them more questions.
According to Tamara Bell, art and luxury asset law specialist at Charles Russell Speechlys, the red flags include: âhot the jurisdictions involved in the transaction (eg funds from Syria or Zimbabwe); the buyer being a âpolitically exposed personâ (for example, a politician or board member of a public oil company), and therefore more likely to be involved in corruption; or the buyer (or seller) who has already been involved in AML investigations.