Art world alert: NCA zones in on storage providers for enabling crime and sanctions evasion | Fieldfisher
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Art world alert: NCA zones in on storage providers for enabling crime and sanctions evasion

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United Kingdom

The National Crime Agency (NCA) has published an amber alert directed at specialist art shippers, auction houses and art storage companies, including freeports. It also applies to those involved in the storage of art including insurers, brokers, accountants, lenders and lawyers.

The alert can be found here

The key points are:

  • Certain collectors are avoiding sanctions and financial restrictions by storing and selling art without proper checks by those storing the art. The NCA is investigating storage facility providers and whether they have the ability to identify change in client status and suspicious activity relating to financial sanctions, money laundering, tax evasion, cultural property trafficking, or other criminality.
  • It is important that those entities providing storage facilities are able to demonstrate that they conduct regular and thorough due diligence checks from the onboarding process until the works are transferred and that such checks show any change to their client’s circumstances that may affect their risk rating. Failure to fulfil proper reporting obligations may result in potential criminal offences such as enabling sanctions breaches, money laundering, court restrictions breaches or storing prohibited property and voiding of insurance cover.
  • It is extremely important that up to date policies are in place and an entity can show that checks are properly carried out.

Key identifiers include the following:

  • Attempts to transfer art or cultural property to close associates or intermediaries;
  • Attempts to sell art or cultural property quickly, especially to another jurisdiction (but the work itself may stay in situ); or
  • Use of complex trust and/or company structures to help conceal the true identity of the ultimate beneficial owner.

The NCA alert is perhaps unsurprising given the recent update in Private Eye that Freeports in the UK are no longer subject to audits by HMRC or Border Force, as originally proposed in 2021 and any checks are left to freeport governing bodies.

If you are looking for peace of mind, our team of specialists on economic sanctions, anti-money laundering and cultural property is available to audit your policies and practices for compliance with rules identified in this amber alert. 

To find out how we can help, please contact members of the Art Law team.

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