OFSI has published a new set of threat assessments to help art market participants and high value goods dealers comply with financial sanctions requirements.
The guidance notes that there are numerous designated persons across many sanctions regimes who are high-net-worth individuals with footprints and assets in the UK, who may seek to use these sectors to buy and sell relevant assets – meaning that businesses who deal with them risk breaching sanctions restrictions if they are not alive to the risks and apply for licences where needed.
Alongside other entities within the AML regulated sector, these businesses are additionally subject to OFSI reporting requirements.
On the whole, OFSI says it is highly likely that high value goods owned by designated persons in the UK have not been reported to OFSI and it is likely that Russian designated persons and their enablers have dealt with goods in the UK in breach of asset freezes. It is also concerned that it has received a high number of suspected breach reports about high value goods submitted by other firms, such as financial services providers and legal firms – which it says emphasises that HVG dealers need to ensure they comply with their new reporting obligations now.
The guidance also reminds firms that where they are reporting to OFSI they should also consider whether they need to make a SAR to the NCA – again, it believes the sector is under-reporting based on the number of registrations of firms in the sector on the NCA SAR Portal
Finally, the guidance sets out some examples of what should be clear red flags of potential sanctions (and AML) issues and provides a couple of case studies, including a recent CPS report of an art dealer jailed for failing to report under Terrorism Act obligations his dealings with a suspected terrorist, who was also sanctioned by the US Government.