Market Belgium

Money-laundering rules mean more work for dealers

Brussels wants to lower amount of cash businesses can accept without asking questions

Proposed changes to money-laundering legislation could mean that more galleries will need to register as “high-value dealers” and comply with stricter guidelines when accepting cash from buyers.

At the moment, galleries and auction houses must register as high-value dealers if they accept cash transactions of €15,000 or more. In a report published in April on the application of the anti-money-laundering directive, the European Commission recommended lowering the threshold, but did not suggest a sum.

“Lowering the threshold will not make life more difficult for money launderers,” says Pierre Valentin, who specialises in art law at the legal firm Withers. “It will, however, make business more difficult for the art trade. It is the smaller dealers in antiques and lower-end fine art who accept cash: and they’re the ones suffering most in this economic climate.”

The report says that clearer guidelines should be drawn up on procedures for checking buyers and companies. These could include verifying the buyer’s identity—for example, by checking passports and utility bills—but it also suggests that the art trade takes a more proactive approach and asks more questions about the nature of businesses. The trade should have policies to “prevent the business being used for money laundering or terrorist financing”.

These measures, however, are likely to add pressure to smaller businesses. “[The processes] are particularly onerous if you routinely deal with foreign companies, trusts and other entities… most people do not walk around with their passport and an original utility bill,” Valentin says.

The art trade is growing increasingly aware of its obligations under this directive. Even higher-end traders who are unlikely to accept large amounts of cash, like Christie’s, have set up compliance teams. But with sales of art potentially part of the money-laundering process, and given the serious implications (including imprisonment) of failing to comply, there are concerns that the art trade is not fully up to speed.

The European Commission is asking for comments on its suggestions, which also include questions as to whether tax avoidance should be made a specific criminal offence. It plans to bring forward a proposal for a fourth anti-money-laundering directive in the autumn.

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28 Sep 12
15:46 CET


Yes definitely its more work and you did brilliant job to post this information through blog, so thanks for sharing it.

14 Aug 12
14:49 CET


May be Lowering the threshold will not make life more difficult for money launderers but it would be the first step against money launders.

13 Jul 12
2:20 CET


So cash is no longer money - eh! What next - slavery to banksters?

25 Jun 12
22:32 CET


Governments have become to big, unwieldy and by that definition, self serving. They'll interfere with all kinds of businesses making it more difficult and expensive to trade in order to get their cut. It is self defeating as shoos business away and they end up less well off. But politicians try their hand more at politicking that well thought out policy!

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