UK's new sanctions reporting regime tightens screws on struggling dealers

Starting May 2025, UK art market participants face a new obligation to report clients suspected of sanctions, adding complexity to compliance. The Office of Financial Sanctions Implementation (OFSI) requires immediate reporting when parties are added to sanctions lists, even during ongoing transactions. A recent webinar highlighted widespread confusion over specifics, such as which art objects are covered and historical transactions with sanctioned individuals. This comes amid critiques of government messaging that conflicts with the challenges faced by smaller dealers, who argue for a reassessment of the art market's risk classification.

The upcoming mandatory sanctions reporting for the UK art market poses challenges, as market participants must navigate complex regulations amidst a push for growth from the government.

Participants in recent webinars raised crucial questions about compliance, underscoring the need for clarity in dealing with sanctioned clients and reporting obligations.

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