Irish art dealers and galleries have been warned to take measures against criminals buying expensive artwork to launder the proceeds of crime.
The development comes as the Department of Justice takes steps under new laws to intensify regulatory inspections of art traders and intermediaries, many of whom have not previously been subject to official supervision.
The clampdown follows the introduction of rules to guard against organised crime groups and drug cartels using high-value art purchases to launder money. The rules also aim to curb any terrorist financing via the art market.
The department has put 234 businesses trading in art on a database for monitoring compliance among dealers and intermediaries. Officials inspected 10 businesses late last year, and a further 20 are planned for this year.
“I am sure the businesses subject to this new inspection regime will be in compliance with our new regulations, but we must always be alive to potential threats and avenues which could be used for money laundering and the financing of terrorism,” said Minister for Justice Helen McEntee.
“I have no doubt that all these businesses will work with my department to ensure we have a robust supervisory regime in place.”
The move reflects international efforts to close off avenues for criminal and terror groups to use the fine art market to shelter illicit funds and bring tainted money into the legitimate economy via the acquisition and resale of artwork.
Law enforcement agencies around the world have long had concerns that loose regulation of the sector – as well as its traditions of secrecy and anonymity – present considerable opportunities to launder illicit cash.
Gardaí, justice and Revenue officials told art dealers in a recent webinar that they fall within a “new category of designated person” required to take measures to ensure their business is not used for money laundering.
The rules apply to traders and intermediaries, including galleries and auction houses, who sell artwork for at least €10,000 in one transaction or a series of deals that appear to be linked.
The department's anti-money laundering and compliance unit has been made responsible for supervising art trade outside of auctions with a value of €10,000. The Property Services Regulatory Authority supervised auctions prior to the laws coming into force last year and will continue to do so.
Traders in art are required to retain all records on the history of services provided to each customer and transactions with them, and to report any suspicious transactions to the Garda and Revenue.