Do dealers have to disclose details of their clients to other dealers?
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Do dealers have to disclose details of their clients to other dealers?

Money laundering rules and the issue of client details with the Antiques Trade Gazette

November 25th, 2020

The 5th Money Laundering Directive (known as 5MLD) took effect on January 10 this year and requires auction houses, art galleries and dealerships to conduct stricter due diligence on buyers who purchase from them works of art above a threshold of €10,000.

The regulation requires Art Market Participants (AMPs) – anyone trading in or acting as an intermediary in the trade of works of art that sell for above the threshold – to register and a pay a fee with HMRC.

Part of the requirement of the new law relates to the disclosure of client details – something that has concerned many dealers.

Client concerns

Tom Noon, co-founder of Arcarta, a specialist in art market customer due diligence and anti-fraud technology, hopes to explain how dealers can understand this new regulation in relation to disclosing client details to other dealers.

Noon says: “As the new Money Laundering regulations have taken hold this year many art and antiques businesses find themselves faced with a seemingly unworkable problem: disclosing their clients to another gallery, dealer or auction house.

“While the heart of the regulation concerns itself with a call for transparency to reduce illegitimate activity, it is at odds with two fundamentally important characteristics which define the business of dealing in art: discretion and privacy. These two characteristics are oft sought by legitimate buyers and collectors.”

Click below to read the full article.

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