OFAC Advises Participants in the Art Market to Conduct Risk-Based Due Diligence in order to Prevent Sanctions Evasion | ZFZ Postcard Cases
On October 30th the U.S. Department of the Treasury’s OFAC issued its Advisory and Guidance on Potential Sanctions Risks Arising from Dealings in High-Value Artwork.
The Advisory notes that aspects of the concerned market, including anonymity through use of shell companies, can make it attractive to persons conducting illicit activity. The Advisory reminds the art community that U.S. persons are prohibited from engaging in transactions with persons blocked by OFAC. Market participants who may face exposure to transactions involving blocked persons are encouraged to implement a risk-based compliance program.
A takeaway consideration is that regulators across jurisdictions are taking interest in the high value art sector. Market participants in that space should consider review of their compliance programs.
Read more on the decision here.