The art market has long been a target for money launderers thanks to a unique combination of factors. High-value artworks can be transported across borders with ease, enabling vast sums of money to move discreetly.
Prices are often highly subjective, giving criminals an opportunity to manipulate valuations, obscure illicit funds and hide identities through private transactions, shell companies and intermediaries, said SmartSearch.
According to the Art Basel and UBS Global Art Market Report 2025, international art sales reached $57.5bn in 2024, illustrating the sheer size and appeal of this sector to criminals operating across global finance.
At its core, art money laundering relies on buying and selling artworks or antiquities, frequently at inflated values, to disguise illegal origins and integrate the money back into the legitimate economy. While this historically centred on fine art purchases, emerging risks are expanding. Non-fungible tokens (NFTs) introduce anonymity, fast transferability and volatile pricing, while cultural objects and archaeological artefacts are increasingly being exploited, especially in regions experiencing political corruption or conflict.
There are several primary reasons the art market is particularly exposed to money laundering. Art is both valuable and portable, which allows the movement of millions in a single transaction. Its subjective pricing makes manipulation straightforward, while private sales and agent-led deals can obscure buyer and seller identities and disguise provenance. For decades, art dealers operated with little oversight, leaving a gap between the art market and the regulation faced by banks and other financial sectors.
Money laundering is also a key financing source for terrorism and organised crime. Research from the Financial Action Task Force (FATF) highlighted that groups including ISIL and Al-Qaeda have profited from looting and trafficking antiquities since 2016, generating income through the sale of cultural heritage items across international networks.
Recent global AML reforms demonstrate the scale of the problem. In Mexico, new anti-money laundering rules introduced in 2012 reportedly led to a 25–30% immediate decline in art sales, indicating the volume of illicit transactions previously occurring. Similar regulation has been introduced across the EU, UK, Canada and US. In the UK, art market participants only became subject to AML rules in 2020 under the Money Laundering Regulations and Fifth Anti-Money Laundering Directive, bringing dealers, galleries and auction houses into compliance frameworks.
However, enforcing AML in the art sector remains difficult. Fakes and forgeries are frequently used to support illicit transactions, regulations differ widely by country, and pricing discrepancies make risk assessments challenging. Anonymous bidding still shields identities, complicating efforts to establish transparency.
To mitigate risk, art dealers must implement core compliance checks, including identity verification, sanctions and PEP screening, source of funds assessments, suspicious activity reporting and ongoing monitoring. Enhanced due diligence is necessary when red flags appear, particularly around complex legal structures or high-value cross-border deals.
Digital compliance platforms are now vital tools for art businesses. SmartSearch offers automated identity verification, biometric checks, UBO screening, sanctions matching, source of funds analysis via open banking, and auditable record keeping with ongoing monitoring. This all-in-one approach simplifies AML obligations while helping art dealers protect their reputation and safeguard the integrity of the global art trade.
Money laundering in the art world is real, significant and increasingly scrutinised by regulators worldwide. As AML rules tighten and criminal methods evolve, technology-driven compliance will be central to reducing risk and supporting transparency in international art commerce.
Copyright © 2025 RegTech Analyst
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