Anti-Money Laundering for Art Market Participants –top tips when checking identity
Consequently, art dealers and antique traders, as well as any intermediaries such as galleries and auction houses, who accept or make payments of €10,000 or more must carry out customer due diligence (CDD) to ensure they understand who they are dealing with. AMPs can face significant penalties, including fines or even imprisonment, if they are found to be involved in money laundering activities.
To that end, every AMP is now expected to take a thorough, risk-based approach to preventing and detecting money laundering by introducing CDD and record keeping, reporting suspicious activity and registering for regulatory supervision with HMRC.
CDD can take different forms, depending on a customer’s profile, but should enable AMPs to be confident that they know the identity of each customer. At its simplest, CDD involves taking copies of a customer’s identity documents and proof of address and storing them safely. It’s critical, of course, that this process includes a check to verify that the documents are genuine and belong to the holder. As fake identity documents become increasingly sophisticated, this can present a challenge for AMPs. There are, however, some simple steps you can take to reduce the risk of accepting a fraudulent document, including checking key security features, spellings and type fonts and ensuring that you cross-check photographs. I recently put together an article for The Art Newspaper on the topic of how galleries can spot fake ID documents – you can read it here.
In certain circumstances, identity checks will also need to be followed by Enhanced Due Diligence– for example if a customer is flagged as a Politically Exposed Person (PEP) or appears on a sanction list.
Our Know Your Customer check service offers a straightforward way to support CDD, including identity verification, PEPs and Sanction checks and optional facial match and address verification checks. We offer a low minimum order, suitable for checking a few customers or thousands each year and our service which can be accessed from anywhere, 7-days a week. Find out more here.
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