Summarize this content to 2000 words in 6 paragraphs in Arabic Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Prominent art-market players including the White Cube gallery, which represents Tracey Emin and Damien Hirst, have been fined by the UK tax authority for failing to comply with money-laundering rules.White Cube Ukraine Appeal, which the gallery set up to handle proceeds from artworks sold to support people affected by the war in Ukraine, was fined £1,350 in 2024 for “failing to apply for registration at the required time”, according to data from HM Revenue & Customs. The gallery said the failure to register was due to an “administrative error resulting in a small fine which we dealt with immediately”. Neither Emin nor Hirst is said to have done anything wrong.The fines imposed by HMRC are small: the tax authority has issued 147 against different businesses totalling £740,000 for failing to register since 2022, with the highest fines less than £25,000. But a string of respected London galleries, including Arcadia Missa, Tiwani Contemporary and Carl Kostyál, which is based on Savile Row in Mayfair, have been hit with penalties as HMRC focuses on those in the sector failing to comply with money-laundering regulations. Several art advisers have also been fined, including Helen Macintyre, who has advised the Qatari royal family and attributed the failure to an “oversight”.Carl Kostyál and Arcadia Missa did not respond to requests for comment; Tiwani Contemporary said that it had missed the deadline to register because of a flood at its previous premises and was now compliant.Businesses selling more than €10,000 of art in one transaction have had to register as art-market participants with HMRC since 2021, as part of a push to ensure they could identify the people they were dealing with, in a market where anonymity and confidentiality are often prized.Rena Neville, head of the art division at consultancy FCS Compliance, said the money-laundering regulations introduced in 2021 had led to “a dramatic improvement” in art-market participants obtaining more accurate information about who they were dealing with.The fines for failing to comply with money-laundering rules come as the industry prepares for new sanctions compliance obligations, which come with much tougher penalties. From May, art-market participants will have to report any assets they hold for customers they “know or have reasonable cause to suspect” are on UK sanctions lists to the Office of Financial Sanctions Implementation “as soon as practicable”.Failure to report that you hold a sanctioned person’s assets or that you suspect you have dealt with a sanctioned person can lead to up to six months in jail. Breaching financial sanctions carries a sentence of up to seven years.The nature of the art market makes it particularly exposed to risks relating to sanctions, according to HMRC, because of the lack of regulation and ease with which artworks can be moved across borders.“High value dealers”, including those who deal in luxury cars, wine and precious metals, will also become subject to sanctions obligations from May.HMRC said it was “here to support businesses to protect themselves from criminals who would exploit their services. That includes taking action against the minority who fail to fulfil their legal obligations under the Money Laundering Regulations.”
