How Creative United is Getting the Art Market Ready For AMLD5
As you know, Creative United is an entrepreneurial community interest company committed to supporting the growth and development of the arts and creative industries. That’s why as soon as the new Anti-Money Laundering Directive (AMLD5) came into force, it was important that we did something to ensure you were as confident as possible with these changes and their potential impact on your business.
As a member of the Own Art network, you’ll have been receiving news of our free training programme, AMLD5 and the Art Market, straight to your inbox! These sessions have been designed to give you a deeper understanding of specific areas of AMLD5 compliance as an Art Market Participant in advance of the forthcoming HMRC registration deadline of 10 June 2021.
We spoke to our Chief Executive, Mary-Alice Stack, to see why it was important for Creative United to drive this programme.
And don’t worry if you’ve not managed to make any of the sessions, recordings and further resources have and will be made available to you on our Learnworlds platform here.
“…it’s a good idea for anyone involved in selling works of art to familiarise themselves with the regulations and to be aware of their legal obligations as ‘art market participants’ with regard to higher-value transactions.”
What is AMLD5 and why is it so important for the art market?
‘AMLD5’ refers to the fifth anti-money laundering directive which came into law in the UK in January 2020. The significance of this particular piece of legislation is that the scope of the regulations has now been extended to include transactions relating to the sale of works of art.
What led to this new anti-money laundering directive?
AMLD5 is just one in a series of legal measures that have been adopted by countries across the EU since the early 1990s to try to prevent the illicit movement or ‘washing’ of funds linked to criminal activities, such as drug trafficking. Money laundering is a major issue for governments and law enforcement bodies across the world which, with the rise of the digital economy, is becoming more and more difficult to control.
Who will be most affected by these new regulations and how?
These new regulations affect UK firms, including sole traders, involved in the buying or selling of works of art where the value of the transaction is above the threshold of €10,000 (c.£8,500). Although not all art businesses and artists will be affected, it’s a good idea for anyone involved in selling works of art to familiarise themselves with the regulations and to be aware of their legal obligations as ‘art market participants’ with regard to higher-value transactions.
How will this new directive benefit art collectors, art dealers, galleries and artists?
Right now it’s probably quite hard for most people to see the positive side of the introduction of AMLD5 in the arts sector, given the burden of costs and additional administrative processes and procedures necessary for compliance. However, money laundering is a serious issue and it’s important that our sector does what it can to reduce the risks of being targeted by criminals looking to exploit any opportunity to wash funds through the art market.
How did Creative United get involved with AMLD5 and why has it been important for Creative United to provide resources for the art market?
Providing help and support for art market participants around the introduction of AMLD5 is something that we have been planning at Creative United for quite some time, primarily for the benefit of our network of Own Art member galleries, but also for artists and the wider visual arts and craft sector across the UK.
As a Sector Support Organisation we believe we have a responsibility to ensure that the galleries and art fairs we work with understand these regulations in order that they can make informed decisions about how to approach the implementation of appropriate systems and processes within their businesses.
To this end, we are delighted to have partnered with leading London law firm Kingsley Napley on the development and delivery of a comprehensive AMLD5 training programme and toolkit of resources that is accessible free of charge for any artist or art business that may be affected.
How can those working in the art market find out if they are complying?
As a first step, I’d recommend taking the time to watch one of the overview sessions that we have produced as part of our AMLD5 & the Art Market training programme. One of these is for art businesses; the other is tailored around the impact of the regulations on individual artists.
If you are involved in ‘regulated activities’ (ie single or linked transactions over the €10,000 threshold), the next step is to make sure you are prepared to meet your obligations and register with HMRC as an art market participant prior to the deadline of 30 June.
Unfortunately, there isn’t a one size fits all solution so it’s really important that you take time to consider the impact of the regulations on the way in which you conduct your business activities as an art market participant, to ensure that you are complying with the requirements.
AMLD5 and the Art Market is a nation-wide programme of free training sessions and workshops, offering practical advice to support galleries, artists and other ‘art market participants’ to understand, assess and respond to their obligations under the 5th Anti-Money Laundering Directive (AMLD5) before the upcoming 10 June 2021 deadline and beyond.⠀⠀⠀
This programme was designed and developed by Creative United and is being delivered in partnership with London law firm Kingsley Napley LPP, with support from Arts Council England, Arts Council of Northern Ireland and Creative Scotland.