Buying and selling high-value assets such as antiques, fine art, watches, jewellery and clocks is attractive for criminals because such transactions can avoid interaction with the financial sector.
In particular, criminals may buy such goods anonymously for cash (that is, physical currency) and this type of assets may be easily hidden and/or can be transferred to third parties with limited documentation.
Valuable assets such as these generally hold or improve their value if resold at a later date.
The Money Laundering and Terrorist Financing (ML/TF) risks associated with antique and fine art dealers include:
- Significant or frequent use of cash to purchase valuable commodities and assets, which can then be resold to disguise the origin of illicit funds;
- Criminals may also use cash to buy high-value goods such as art works, antiques, then travel overseas with them to transfer value while avoiding detection by financial institutions; and
- Organised crime groups may use cash to purchase high-value goods then sell them for cash, so they can disguise the origin of the funds and deposit the money into the financial system without raising red flags.
Antique and fine art dealers must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures as a critical first step in complying with AML/CFT laws.