What is AML and KYC, and what does it have to do with buying art?

AML (anti-money laundering) and KYC (know your client) requirements are common for regulated industries. They are now being extended by governments to the art world, starting with the EU directive 5AMLD, which the UK government has been one of the first to adopt. This means art sellers in the UK are now required by law to conduct AML (verification of source of funds/wealth and KYC (identity) checks on their buyers (from any country) for all sales over €10,000. We expect a version of these requirements to be legislated in the US in the near term.

The British Art Market Federation has published this guide for Art Market Participants, effectively the art industry ‘bible’ approved by HM Treasury & HMRC.