HomeArt Market4 critical takeaways from the recent OFSI updates that AMPs must be aware of

4 critical takeaways from the recent OFSI updates that AMPs must be aware of

  • February 6, 2025
  • Posted by: FCS Compliance
  • Category: Art Market, News
No Comments

Recent updates from the Office of Financial Sanctions Implementation (OFSI enforces UK financial sanctions, ensuring compliance and issuing penalties for breaches.) introduce stricter obligations for Art Market Participants (AMPs). These have wide ranging implications for the industry and emphasis the need for robust compliance practices. Similar to the UK ML Regulations, the OFSI reporting obligation applies to  purchases, sales or storage of works of art with a total value amount in excess of €10,000 or more in a single or series of linked transactions or storage. Here’s what you need to know;

1. Mandatory Reporting is Non-Negotiable

Under the updated rules, AMPs must report to OFSI as soon as practicable if they know or have reasonable cause to suspect a person:

  • Is a designated person, or
  • Has committed breaches under UK regulations. 

2. Why It Matters: Non-Compliance Carries Severe Penalties

Failing to report can result in severe penalties, including heavy fines or even imprisonment. OFSI has strengthened its enforcement powers, with penalties including:

  • Civil fines of up to £1,000,000 or 50% of the transaction value (whichever is greater).
  • Criminal charges with up to seven years’ imprisonment.

Practical Advice: Establish clear reporting procedures and ensure staff understand their obligations. Prompt reporting of suspicious activity may help mitigate penalties.

3. A Key Risk: Hidden Owners

The new regulations stress the importance of adopting a risk-based approach to due diligence. This includes tracing ownership of legal entities. Both human skill and technology tools should be used to uncover beneficial owners.

Beneficial Owners – What to Look For:

  • Does the listed owner hold (directly or indirectly) more than 50% of shares or voting rights?
  • Can they appoint or remove a majority of the board.

Digital Searches may uncover whether the listed owner holds (directly or indirectly) more than 50% of the shares or voting rights in an entity and who has the right to appoint or remove a majority of the board 

Human AML skills may also uncover who has the right to appoint or remove a majority of the board and who is able to direct the entity’s affairs according to their wishes.

Best Practice: Use a combination of human AML expertise and digital screening tools to uncover hidden ownership structures.

4. Stay Ahead – Get Expert Insights

For more detailed guidance, we are hosting a free webinar on 7 March at 12pm (GMT) alongside sanctions specialist, Alexandra Melia, Partner at Steptoe to explore how this change affects AMPs and to answer any questions.  

Final Word: Stay vigilant, stay compliant, stay informed. Reach out to FCS Compliance here.