Publication date: 16 January 2020
Art dealers, galleries, auction houses and every buyer and seller of art are obliged to carry out client screening for all transactions of € 10.000 and more. This also applies to art storage in freeports. Persons and institutions from 23 countries are subject to enhanced client screening.
Under the Money Laundering and Terrorist Financing (Prevention) Act (Wwft), dealers are obliged to carry out extensive client screening in the event of cash payments of € 10,000 and more. As a result of the Fifth EU Anti-Money Laundering Directive, that came into force on 10 January 2020, this obligation will be further extended. What are the new regulations?
It has now become mandatory for art dealers to conduct client screening not only for cash payments but also for cashless payments in excess of € 10,000. Related transactions are also included in the € 10,000 limit. Thus, when a person is making partial payments of 6 x € 2,000, these payments will be subject to the screening obligation. This also applies if someone buys three paintings for € 15,000, each worth less than € 10,000, and this is split into three separate agreements and three separate payments. Incidentally, the Cabinet intends to ban cash payments in excess of € 3,000 as of 1 January 2021.
Intermediaries in art transactions now also have to carry out client screenings in the event of transactions in excess of € 10,000. Here, the Directive explicitly mentions galleries and auction houses.
From now on, client screening is also mandatory for art transactions of € 10,000 and more through freeports. This obligation does not only apply to the trade and agency of art, but also to its storage.
In addition, there is a stricter screening obligation if a transaction involves (legal) persons or financial institutions from a country with a high risk of money laundering and terrorist financing. This includes not only countries such as North-Korea, Yemen and Syria but also states such as Ghana, Panama, Puerto Rico and Saudi Arabia. The complete list can be found here.
The intention was to introduce the UBO-register in the Netherlands on 10 January 2020. As from its introduction, companies are obliged to register their ultimate beneficial owner (UBO) with the Chamber of Commerce. However, this deadline was not met. A new start date is not yet known, but it will probably be known shortly. The delay of this UBO-register will not make the mandatory client screening easier.
Do you want to learn more about the mandatory client screening and the UBO-register or do you have any other questions concerning the obligations you have to comply with (international) art transactions? Do you need legal assistance in a dispute involving art? Please contact Paul W.L. Russell, LL.M. (email@example.com or 020-301 55 55) or fill in the contact form below.
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