The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) recently issued an advisory to inform people of the sanctions risks related to transactions of high-value artwork. Here are the highlights from this advisory.
Transactions in high-value artwork are usually non-transparent and anonymous. Sometimes, dealers may even use shell companies to make such transactions. The confidentiality of high-value artwork transactions can allow blocked persons to conceal their identities and illegal activities from the authorities. Thus, OFAC has reminded all stakeholders of their obligations to comply with sanctions and the penalties for defaulters.
The OFAC advisory reminds all participants in this sector that the “Berman Amendment” to the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) does not mean that all artwork dealings are exempt from OFAC sanctions. Further, OFAC has advised companies to set up a risk-based compliance program to avoid sanctions-related violations. It has also advised art dealers, who may be involved in transactions with blocked persons, to evaluate their risks. Such participants should conduct risk-based due diligence to prevent financial crimes related to high-value artwork.
Source name: US Department of the Treasury