Laura Shaughnessy is the former managing editor at Dockwalk.
In June 2019, EU Regulation 2019/880 became official as part of the EU’s fifth anti-money laundering (AML) directive. It limited the import of ancient art, books, manuscripts, and antiques into the EU, restricting import and export of items more than 200 years old to curb illicit trade in cultural goods, preserve cultural heritages, and halt terrorist financing and money laundering. Originally, they gave a one-year EU compliance deadline of January 10, 2021.
“With this evolution comes the need for more regulated and transparent art market environment; as a consequence, the art market can only get bigger,” says Karolina Blasiak.
As of August 31, the UK extended this deadline to June 10, 2021, for galleries, auction houses, and art market participants to register under the UK’s new AML rules — art dealers have to register with the government, verify client identities, and report any suspicious transactions, or face penalties that could include jail time. The five-month delay is welcome as businesses, including galleries, auction houses, and other art market participants, have reportedly struggled to become compliant, particularly in light of the pandemic.
Although created with good intentions to increase transparency in Europe and the U.S., the reality is that money launderers and terrorists aren’t the only ones who are punished — the initiative makes it hard on parties who are trying to prioritize client discretion and privacy.
Even before COVID-19 struck, these new regulations posed some difficult transitions and adaptations. Not only do auction houses and dealers have to set up appropriate internal systems and train staff, but they also have to account for other complications due to the pandemic.
“Catalyzed by the COVID-19 crisis, there has been a great acceleration in digital promotion by galleries and fairs,” says Karolina Blasiak, an art advisor for Rosemont International. “A proliferation of online viewing rooms, virtual exhibitions and studio tours, myriad digital initiatives, and even an unexpectedly solid stream of online sales for some galleries,” Blaskiak says. “With this evolution comes the need for more regulated and transparent art market environment; as a consequence, the art market can only get bigger,” she says.
This column is taken from the November 2020 issue of Dockwalk.