Money laundering.jpg
The new rules (applying the Fifth Money Laundering Directive, known as 5MLD) took effect on January 10, 2020.

You have 2 more free articles remaining

The Treasury held a consultation (July 21-October 14) on the new Economic Crime Levy that it plans to introduce and said the charge “will fund new government action to tackle money laundering, and help deliver the reforms committed to in the 2019 Economic Crime Plan”. Details of the cost of the levy have not yet been decided but the Treasury aims to raise approximately £100m a year from regulated AML firms such as banks and estate agents.

Those impacted in the art market will be auction houses, art galleries and dealerships that sell works of art for above the €10,000 threshold which must register with HMRC as an ‘Art Market Participant’ (AMP). Registering involves a fee of £300 per premises plus £40 per responsible person within the business. The Economic Crime Levy would be on top of this cost.

The British Art Market Federation (BAMF), dealer associations and leading auction houses have responded to the consultation to argue that the costs of any such levy would be a heavy burden on UK art market firms.

Shock decision

Legal expert Tom Christopherson (and a consultant to Constantine Cannon and Bonhams) said: “This came as something of a shock to the art market, seeing as the AML regulations only came into force for the trade at the start of this year and the period for registration with HMRC is being extended until June 2021.” BAMF chairman Anthony Browne added: “It is difficult to envisage a worse time to be adding costs onto art businesses.”

A statement on the Treasury website said: “Money laundering is at the heart of all economic crime with ultimately the proceeds of all such crimes needing to be laundered for their benefits to be realised.

“To help sustainably fund those actions, and wider new government action to tackle money laundering, the government will introduce a levy upon the AML-regulated sector.” It said the levy “would provide the fairest and most simple method for the AML-regulated sector to contribute further”.

Read more from legal expert Tom Christopherson here.