The rules bind dealers, intermediaries and freeports. A private seller is outside them, but the criminal law binds everyone.

People often confuse two separate things. One is a set of duties that applies to a business because of the work it does. The other is a criminal law that applies to anyone who handles the proceeds of crime. Only the first has a money threshold, and only the first requires registration.

Published by ArtisDomus, written by Polina Surina.

The difference decides who asks whom for a passport. It also decides what happens when a sale is below the threshold: the criminal law still applies.

The rules are the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, S.I. 2017/692. Most of them apply to “relevant persons”: those listed in regulation 8(2), acting in the course of a business they carry on in the United Kingdom (reg. 8(1)). Art market participants were added to that list with effect from 10 January 2020 (reg. 8(2)(i)).

Regulation 14(1)(d) defines an art market participant in two limbs. The first is a firm or sole practitioner who, by way of business, trades in works of art or acts as an intermediary in their sale or purchase. The value of the transaction, or of a series of linked transactions, must be £10,000 or more. The second is the operator of a freeport, when it or any other firm or sole practitioner stores works of art there by way of business. The value of the works stored for one person, or a series of linked persons, must be £10,000 or more.

Three phrases carry the test: “firm or sole practitioner”, “by way of business”, and “trades in, or acts as an intermediary in the sale or purchase of”. Each one leaves out a private seller. An owner selling a picture from their own wall meets none of them. Regulation 14 does not reach them, whatever the value.

A “work of art” takes its meaning from VAT law. It is anything that counts as a work of art for section 21(5)(a) of the Value Added Tax Act 1994, applying section 21(6) to (6B) of that Act (reg. 14(1)(f)). Since 1 September 2022, artists selling their own work have been left out (reg. 14(3)). That applies to a work created by, or attributable to, the sole practitioner or a member of the firm. Such a sale does not make them an art market participant under paragraph (1)(d)(i).

The threshold changed currency in 2026, so every account written before then gives it in euro. The Money Laundering and Terrorist Financing (Amendment) Regulations 2026, S.I. 2026/621, were made on 9 June 2026. Regulation 9 replaced “10,000 euros” with “£10,000” everywhere it appears in regulation 14. The change took effect on 30 June 2026. Regulation 3 of the same instrument switched the currency conversion rule in regulation 3(2) from euro to sterling.

Art market participants are supervised by HM Revenue and Customs, the tax authority (reg. 7(1)(c)(viii) and reg. 3(1)). There is no professional body option.

A registering authority may keep a register of art market participants (reg. 55(3)(h)). Regulation 56(6), in force from 6 October 2020, makes registration a condition of trading. An art market participant had to apply for registration before 10 June 2021. From 10 June 2021, it must not carry on the business or profession unless it is on the register, or has applied and is awaiting a decision.

This rule bans trading until the business is registered or has applied. It is more than a filing duty with a penalty attached. A dealer who trades without having registered or applied is in breach of the ban itself.

Customer due diligence is required in four cases (reg. 27(1)). A relevant person establishes a business relationship. It carries out an occasional transaction that is a transfer of funds over £800. It suspects money laundering or terrorist financing. Or it doubts whether documents or information it obtained earlier are true or adequate.

Regulation 27(7C)(a) adds a trigger for the art market. An art market participant must also carry out due diligence when it carries out, or acts in, an occasional transaction in a work of art worth £10,000 or more. This applies whether the deal is done in one operation or in several that appear to be linked. Regulation 27(7C)(b) does the same for storage in a freeport.

The words about linked operations catch people out. Three payments of £4,000 for one object are one transaction of £12,000 if they appear to be linked. The test is how they appear, whatever they were called.

Compare the general rule in regulation 27(2). A relevant person owes due diligence on an occasional transaction of £12,000 or more. That rule covers every relevant person except art market participants, high value dealers, letting agents and casinos. So the art market threshold is the lower of the two.

The measures themselves are in regulation 28(2). Identify the customer. Verify the customer’s identity. Assess, and where appropriate obtain information on, the purpose and intended nature of the business relationship or occasional transaction.

For a company or other body corporate, regulation 28(3) adds more. The relevant person needs its name, its company or other registration number, and the address of its registered office. If its principal place of business is different, it needs that too. It must also take reasonable measures to establish and verify three things. They are the law the company is subject to, its constitution, and the full names of its directors and the senior persons responsible for its operations. The beneficial owner must be identified, with reasonable measures taken to verify who that is (reg. 28(4)).

Regulation 31(1) sets out what must happen when the measures cannot be applied, and there is no discretion. The relevant person must not carry out any transaction through a bank account with or on behalf of the customer. It must not start a business relationship or carry out a transaction with the customer by any means other than a bank account. It must end any existing business relationship. And it must consider whether a disclosure is required under Part 7 of the Proceeds of Crime Act 2002.

Regulation (EU) 2024/1624 of the European Parliament and of the Council of 31 May 2024 replaces the directives with a single text that applies directly in every Member State. It applies from 10 July 2027. For football agents and professional football clubs, it applies from 10 July 2029.

“Obliged entities” are the businesses the regulation binds. They include anyone trading in cultural goods or acting as an intermediary in that trade, including art galleries and auction houses. The value of the transaction or linked transactions must be at least EUR 10 000 or the equivalent in national currency (art. 3(3)(i)). Article 3(3)(j) covers anyone storing, trading or acting as an intermediary in cultural goods and high-value goods in free zones and customs warehouses, at the same figure.

“Cultural goods” means the goods listed in Annex I to Council Regulation (EC) No 116/2009. That Annex has its own conditions. Because of them, a dealer in contemporary work may fall outside Article 3(3)(i) altogether.

Annex IV to Regulation (EU) 2024/1624 lists the high-value goods that make a trader an obliged entity under Article 3(3)(f). Works of art are not on the list. It covers jewellery and gold- or silversmith articles above EUR 10 000, and clocks and watches above EUR 10 000. It also covers motor vehicles above EUR 250 000, and aircraft and watercraft above EUR 7 500 000. So that route does not bring in a dealer in contemporary painting either.

A dealer who is an obliged entity must carry out customer due diligence on an occasional transaction of at least EUR 10 000. This applies in one operation or through linked transactions (art. 19(1)(b)). It must also do so on suspicion, regardless of any derogation, exemption or threshold (art. 19(1)(d)). For an occasional cash transaction of at least EUR 3 000, it must at least identify the customer (art. 19(4)). For the obliged entities in Article 3(3)(e), (f) and (i), the supplier of the goods is a customer as well as the direct customer (art. 19(6)(a)). So the dealer must run due diligence on the person consigning the work as well as on the buyer.

Article 80(1) caps cash. Anyone trading in goods or providing services may accept or make a cash payment only up to EUR 10 000. This applies whether the deal is done in one operation or in several that appear to be linked. Member States may set lower limits. The cap does not apply to payments between private individuals who are not acting in a professional capacity (art. 80(4)(a)).

The Proceeds of Crime Act 2002 creates three main offences, and all three apply to anyone. Section 327(1) covers concealing, disguising, converting or transferring criminal property, or removing it from England and Wales, from Scotland or from Northern Ireland. Section 328(1) covers entering into, or becoming concerned in, certain arrangements. These are arrangements the person knows or suspects make it easier for another person, or someone acting for them, to acquire, keep, use or control criminal property. Section 329(1) covers acquiring, using or possessing criminal property.

Criminal property is property that is, or represents, a person’s benefit from criminal conduct, where the alleged offender knows or suspects that it is (s. 340(3)). It does not matter who carried out the conduct, who benefited, or whether the conduct happened before or after the Act was passed (s. 340(4)).

All three offences have the same way out. No offence is committed if the person makes an authorised disclosure (a report) under section 338 and, where the disclosure comes before the act, has the appropriate consent. The notice period is seven working days, starting with the first working day after the disclosure (s. 335(5)). Consent counts as given if no refusal arrives before it ends (s. 335(3)). If consent is refused, a moratorium period of 31 days runs, starting with the day the refusal is received (s. 335(6)). A court can extend it under section 336A.

Section 330 is a separate duty to report, and it applies only to the regulated sector. Its second condition is that the information behind the knowledge or suspicion reached the person in the course of a business in the regulated sector (s. 330(3)). Schedule 9, paragraph 1(1)(u), puts art market activity in that sector on the same terms as regulation 14. That covers a firm or sole practitioner trading in works of art, or acting as an intermediary in their sale or purchase. The transaction, or a series of linked transactions, must be £10,000 or more. The freeport limb is included too. The sterling figure replaced the euro one on 30 June 2026 (reg. 39(2)(c), S.I. 2026/621).

The two duties differ in what the person must know. Section 330(2) catches someone who had reasonable grounds to know or suspect, whether or not they actually did. The three main offences need actual knowledge or suspicion. A dealer can commit the section 330 offence simply by failing to notice.

The penalties differ too. On conviction on indictment under sections 327, 328 or 329, the maximum is 14 years’ imprisonment, a fine, or both (s. 334(1)). For section 330, the maximum term is five years (s. 334(2)).

If you are selling your own picture, you are not an art market participant. You owe no customer due diligence, and you register with nobody. The gallery or auction house acting for you does owe it, and you are its customer. When it asks for identification and for the source of the work, it is applying regulation 28(2). It says nothing about you personally.

Sections 327 to 329 of the Proceeds of Crime Act 2002 have no threshold. Selling a work for £6,000 when you have suspicions about its ownership is still an offence.

In ArtisDomus’s practice, the consequence is about paperwork. To complete due diligence on a private seller, a dealer needs exactly what an estate is least likely to hold. That means proof of the seller’s identity and address, the chain by which the work was acquired, and the papers from the acquisition itself. Without them, the sale stays legal. It becomes slow, and then it can only go to a narrower set of buyers.

A summary of the law. It is not legal or tax advice.