New Financial Sanctions Rules for Art Market Participants & High Value Dealers
The UK government is introducing significant changes to financial sanctions enforcement for Art Market Participants¹ (“AMPs”) and High Value Dealers² (“HVDs”), effective 14 May 2025. These reforms aim to close loopholes in high-value transactions—particularly in the art and antiquities market—that could be exploited for sanctions evasion.
At Dragon Argent, our Art Law Solicitors in London advise clients on navigating these evolving regulations. Below, we outline the key changes and steps businesses must take to ensure compliance.
What are the current obligations on AMPs and HVDs?
The current reporting obligations applicable to AMPs and HVDs were originally set out in the Sanctions and Anti-Money Laundering Act 2018 (“SAMLA”). Under SAMLA, AMPs and HVDs are required to inform the UK’s Office of Financial Sanctions Implementation (“OFSI”) as soon as practicable if they know or have reasonable cause to suspect, from information received in the course of carrying on their business, that a person:
is a designated person (the list of the asset freeze targets can be found here); or
has committed breaches under SAMLA.
What has changed under the New Rules?
OFSI is expanding its regulatory reach by applying stricter financial sanctions compliance rules on AMPs and HVDs (the “New Rules”). OFSI has published a specific guidance on financial sanctions for AMPs and HVDs (found here), which is to be read in supplementation to OFSI’s General Guidance.
As a result of this expansion, AMPs and HVDs must now treat transactions involving art, antiques, and cultural artifacts over £10,000 as potential sanctions risks. Cryptocurrency payments for high-value art and antiques are explicitly included under scrutiny.
Effective from 14 May 2025, AMPs and HVDs will need to step up their due diligence processes to comply with the mandatory reporting obligations under the New Rules. This will include mandatory identification of Ultimate Beneficial Owners (“UBOs”), even if transactions involve intermediaries or trusts. Simplified ‘Know Your Customer’ (“KYC”) checks will no longer permitted for high-risk clients, including Politically Exposed Persons (“PEPs”). Further, expanded sanctions screening against UK, EU and US sanction lists for cross-border deals will be required.
AMPs and HVDs will also be required to file any Suspicious Activity Reports (“SARs”) to the UK Financial Intelligence Unit at the National Crime Agency within 24 hours. Simultaneously, firms should notify OFSI when the suspicion involves a potential sanctions breach. When making a report to OFSI, firms must disclose all supporting evidence for their suspicion, including the basis for their knowledge and any identifying details of the suspected designated person. Comprehensive guidance on reporting requirements can be found in Section 5 of OFSI’s General Guidance.
What are the penalties for non-compliance?
Failure to comply with reporting requirements is considered a serious criminal offence. Breaches can be punishable by up to 7 years imprisonment on indictment and up to 12 years imprisonment on summary conviction. In addition, OFSI has powers under the Policing and Crime Act 2017 to impose monetary penalties of up to £1 million or 50% of the total value of the breach, whichever is higher, for breaches of financial sanctions.
Why do these New Rules matter?
The updates reflect the UK’s commitment to aligning with global sanctions enforcement, particularly targeting high-value art and antiquities trades used by sanctioned individuals to conceal assets.
Recent cases—such as the seizure of a £38 million Picasso linked to a sanctioned oligarch—highlight regulators’ focus on the art market. Businesses that fail to adapt risk severe financial and reputational damage.
What steps can AMPs and HVDs take?
AMPs and HVDs should take steps now to ensure their risk assessment processes are updated and enhanced to ensure compliance with the New Rules. Some steps include:
Updating compliance policies, terms and conditions and privacy notices to ensure procedures reflect the New Rules, including the new £10,000 threshold and 24-hour SARs rule.
Enhancing due diligence checks on customers/clients and payment chains.
Communicating sanctions policy to counterparties, partners, subsidiaries and affiliates.
Conducting an audit of past transactions from 2020 to date to identify any gaps in KYC checks or sanctions screening.
Regularly verifying the sanctions lists in the UK and any other relevant jurisdictions.
Conducting staff training with a focus on highlighting red flags (e.g., the use of shell companies, rapid resales or opaque payment structures) and communicating new reporting obligations.
How can Dragon Argent help?
Here at Dragon Argent, our Art Law specialists can help you navigate these new financial sanctions. We can assist you by:
✔ Drafting compliant policies tailored to the New Rules.
✔ Conducting risk assessments of existing transactions.
✔ Drafting or updating internal policies, terms and conditions, privacy polices and notices.
Seeking early legal advice empowers your business to navigate these changes with confidence, ensuring seamless compliance while protecting your commercial interests.
¹ An AMP is defined as a firm or sole practitioner who is registered or required to be registered with HMRC as an AMP under regulations 56(5) and (6) of the Money Laundering Regulations.
² A HVD is a business or sole trader that trades in goods and receives or makes cash payments of €10,000 or more (or equivalent).
This article is for general information only and does not constitute legal advice. Regulatory updates are ongoing—please consult our team for case-specific guidance.
Speak to one of our Art Law solicitors today ↓
Written by:
Head of Litigation, IP & Art Law
Trainee Solicitor
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