- October 17, 2022
- Posted by: FCS Compliance
- Category: Blog
Find out more about the AML experts at FCS. In this interview, FCS PR Director, Alison Blease introduces you to Rena Neville…
I’m here today with Rena Neville, who recently joined FCS as a Lead AML Consultant for the newly established FCS Compliance – Art Division. Can we start at the beginning how did it all begin?
My background is in law. I qualified as a lawyer and had the privilege of practising at the law firm, Sullivan & Cromwell, based in New York City’s financial district. My career in the art world began at Sotheby’s where one of my roles was to develop a Global Compliance Department as their first Compliance Director. In fact, I believe I was the first person to have such a role in the wider art market.
That’s quite an accolade to hold. I believe that you had a long-standing career at Sotheby’s?
Yes, I enjoyed a career there spanning 30 years. Although I was there for a long time, it was interesting as my role changed quite a bit over the years. In addition to Global Compliance, I became European General Counsel for Sotheby’s and Global Head of Litigation. I also moved back and forth three times, essentially splitting my time between London and New York.
During my time at Sotheby’s, I also helped set up their global client development, as part of the global business development team. In client development, the focus was on setting up and implementing practices to develop, build and strengthen key client relationships. Business Development gave me an opportunity to experience the art world from an entirely different perspective: that of the specialists and business getters.
Client/ Business Development gave me insights into the true difficulties and challenges facing specialists and business-getters when they serve clients. I quickly realised that specialists’ time with clients was limited and precious; and that they very much wanted to keep to a minimum the sometimes difficult or awkward conversations about such matters as anti-money laundering requirements.
That sounds like the perfect grounding for the work you do now. What happened next?
I left Sotheby’s at the end of 2019 and in January 2020, the art market became subject for the first time to the Money Laundering Regulations implemented in keeping with the EU’s 5th Money Laundering Directive.
It was a happy coincidence that I had years of experience in implementing a global anti-money laundering policy, and I understood the stresses and strains on sales teams operating in the extremely competitive art market. I believed I was in a somewhat unique position to help the art market understand and meet its AML obligations. Thus, I set up my own business – Corinth Consulting Ltd at the end of 2020; and with the help of my excellent colleague Paula Trommel, in 2021, we began providing AML consultancy services for art market participants (AMPs).
And was it around this time that you came across FCS Compliance?
Yes, it was. In 2020, I attended a course led by Jerry Walters (founder of FCS Compliance) and was impressed by him, his background and his understanding of money laundering legislation. I subsequently met other members of the company and thought that their experience, as former law enforcement officers investigating fraud and money laundering, was a perfect complement to my experience in the art market and art law. So, after many conversations, realising our businesses were quite similar but complimentary, I took on the role of Lead Art Market Consultant as FCS formally set up the Art Division.
I’ve always thought the art and property worlds are really similar in many ways.
There are certainly similarities, in terms of both becoming part of the regulated sector fairly recently. However, the property sector became regulated years ahead of the art market, so the property market has had more time to adjust and adapt to these regulations. The art world is at the beginning of this transformation, as it has only been regulated since January 2020 and then suffered through the pandemic and the fallout from Brexit. Inevitably, implementation and operation of art market AML programmes will become slicker and easier, as all the players in the market, both domestic and international, better understand the requirements.
So what do you do on a day-to-day basis and who are your clients?
Our clients cover the whole spectrum, from large, international auction houses and galleries to smaller, regional auction houses and galleries to individual art advisors and consultants.
And on a day-to-day basis, I help people set up their AML programmes – outline the practicalities of what’s needed for them to be compliant and how to implement the programme. In addition, we regularly answer questions coming into us via the FCS Compliance Hotline. Finally, we also do our best to follow the changing landscape of Government Guidance as well as legal development to the sanctions, bans and the ML Regulations. We also follow international developments in the US and EU.
And training?
Yes, lots of training. Training ranges from foundation level to more sophisticated Nominated Officer and Senior Leadership sessions. Amazingly, there are new and different questions and issues that arise in literally each session, which is super. This helps to give us an extremely practical insight to the day-to-day problems facing our clients.
And what’s next for the business?
We are looking to start carrying out client due diligence work (CDD) for AMPs – in the same way that FCS Compliance currently does for the property market. Essentially the same offering but for the art world.
What would you say are the most frequent mistakes that AMPs make when it comes to AML?
I fear the most frequent mistake is treating AML compliance as a box-ticking exercise resolved simply by doing internet searches or relying on a third-party tech tool service provider. Technology is a wonderful, essential tool for any sound AML Programme, but it is just a tool, not a total solution. AMPs must ensure that their staff are sufficiently fluent in the Programme, particularly with Red Flags (such as suspicious questions, hesitant answers, third-party payments, source of fund discrepancies, etc.) to detect and report Red Flags to the Nominated Officer.
And what next for the art world and compliance?
As having parts of the art market in scope of the ML regulations is relatively new, we expect the landscape to continue to evolve in the near term, both in the UK and in the States. The art market itself is changing and presenting new ML risks, for example with the explosion of NFTs, digital art, blockchain and the use of cryptocurrencies. The risks to the art market may result in changes to our regulations.
Another area of continued discussion is around what items are not in scope, but some believe that should be, such as antiquities, decorative arts and luxury items.
It sounds like there is a lot for you to do. You have some help though, don’t you?
Yes, thank goodness, from the start I have worked closely with Paula Trommel, (now a Senior AML Consultant at FCS Compliance – Art Division). Paula previously worked for the Financial Conduct Authority (FCA) where she was responsible for the investigation of financial crimes including money laundering. But she also spent time in the art world working for the Fine Art Group as well as for Christie’s legal department.
A formidable team!
Yes, with Paula’s regulatory experience, the existing FCS Compliance team’s law enforcement experience, and my art market experience, it seems to me that we have a unique combination of skills with which to serve our clients.
Paula and I were fortunate to join forces with FCS Compliance at just the right moment in time. Not only was new UK Government Guidance issued last summer, but HMRC (the art market regulatory authority), has begun carrying out Interventions, or audits, in person and over the phone announced and unannounced. The audit results will be helpful in focusing precisely on what AMP AML obligations mean. Of course, we would be happy to help them through the process.
Thank you Rena – it’s been fascinating.
