- US based dealers that are selling or buying in the UK must register with HMRC for anti-money laundering purposes.
- This is done using the non-established taxpayers (“NETP”) VAT registration process and then applying as an Art Market Participant (“AMP”) with the HMRC:
Due Diligence Requirements
- The AMP is required to carry out customer due diligence on the person or entity who is paying the AMP:
- Example 1: AMP2 is selling to Intermediary on behalf of Buyer, Buyer is paying Intermediary, Intermediary is paying AMP2
- Intermediary conducts know your client search on Buyer
- AMP2 conducts know your client search on Intermediary
- Example 2: AMP2 is selling to AMP1 on behalf of Buyer, Buyer transfers funds directly to AMP2
- AMP2 conducts know your client search on Buyer
- Intermediaries are defined as: someone who, by way of business, actively transacts in the sale or purchase of works of art on behalf of a seller or buyer under whose authority they act.
- This could be an agent or an art dealer, which could include an art gallery, or auction house;
- an interior designer and;
- online sales platforms transacting with UK residents who receive a commission.
- Customer Due Diligence measures must take place before establishing a business relationship or before the transfer of title.
- In order to catch and prevent impersonation, it is highly recommended the party conducting the know you client search verifies the buyer’s identity via a video call when transacting over the phone or online.
- Data can only be used for purposes of preventing money laundering ONLY, must be protected, and held in compliance with UK and EU data privacy laws.