The UK’s National Crime Agency (NCA) has issued an amber alert aimed at mitigating the risk of money laundering within the art storage sector.
The alert emphasizes the threats of sanctions evasion, cultural property trafficking, and money laundering specific to this industry while offering guidance on regulatory compliance and digital best practices.
According to the report, criminals are increasingly infiltrating private art storage facilities to carry out illegal activities. These specialized facilities are often used by collectors and owners to store valuable artworks in a tax-advantaged environment, allowing investments to appreciate in value. This attractiveness makes them prime targets for those seeking tangible assets that can be easily liquidated.
To mask their unlawful activities, criminals often utilize financial services to facilitate the sale, acquisition, or movement of cultural property, creating intermediaries in transactions. As a result, the alert urges companies to implement thorough due diligence measures.
The NCA’s guidance advises security services and storage facility owners to perform due diligence checks and maintain updated customer profiles to ensure compliance with regulations. They also highlighted that criminals frequently shift artworks across jurisdictions to evade financial crime enforcement and to exploit tax benefits.
Martin Cheek, a lawyer and managing director at SmartSearch, commented on the alert, stating, “The NCA’s warning serves as a critical reminder for art storage facilities to remain vigilant against financial criminals. It underscores the necessity for all regulated industries to conduct regular due diligence checks to monitor any changes in a client’s circumstances or those representing them.”
He further emphasized, “Implementing client checks at the onboarding stage, followed by continuous monitoring, is essential to closing the door on criminal activities. Firms should be alert to shifts in client situations, ensuring daily checks against international sanctions. They must also remain cautious of front or shell companies and complex corporate or trust structures that may obscure the identity of the ultimate beneficial owner.”
This alert has been released in collaboration with the Joint Money Laundering Intelligence Taskforce (JMLIT), UK law enforcement agencies, and HM Treasury’s Office of Financial Sanctions Implementation (OFSI).