ECSH54550 - Factors to consider when dealing with AMPs

There are some factors that need to be considered when dealing with a case involving Art Market Participants (AMPs), that are unique to other sectors supervised by HMRC.

While the factors below should be considered, they should be read in conjunction with the rest of the AMP guidance within this chapter.

 

Exchange Rate

All references to the AMP threshold of 10,000 euros includes the equivalent amount in any currency.

AMPs will need to calculate the sterling equivalent of 10,000 euros using the London closing exchange rate for the euro and GBP for the previous working day before the sale or purchase took place. 

For any transactions conducted in any other currency, AMPs will need to calculate the equivalent of 10,000 euros using the London closing exchange rate for the euro and the other relevant currency for the previous working day. 

EC-S staff carrying out historical transaction testing, may wish to use the monthly exchange rate published by GOV.UK, rather than establish the exchange rate on the day of each sale or purchase. However, if there is a difference of opinion, (for example, if a transaction appears to be in scope but the business hasn’t carried out customer due diligence (CDD)), you will need to take into account how the business calculated the exchange rate on the day. 

Exchange rates for 2024 can be found at HMRC currency exchange monthly rates - GOV.UK (trade-tariff.service.gov.uk) Archived exchange rates for 2023 going backwards can be found at the National Archives [ARCHIVED CONTENT] Exchange rates from HMRC in CSV and XML format - GOV.UK (nationalarchives.gov.uk) 

 

Art Rental 

Any person or business who rents out art, depending on the rental arrangements, could be an AMP. If the rental agreement contained a provision for ownership of the artwork to pass to the customer at the end of a rental term, this would be a relevant transaction.   

 

Joint Ventures  

Joint ventures, where multiple galleries will purchase a work of art jointly, and shared ownership of works of art, are within scope of the The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR2017), if the sale or purchase is over the threshold amount. 

In the case of a joint venture between two AMPs, they will both need to conduct CDD on each other, as this would be a business relationship.

 

Introducers 

Introducers, a person introducing a buyer or seller to a gallery or vice versa, are only within the scope of the MLR2017 if they receive a financial value which directly relates to their active participation in the sale or purchase of a work of art. At this point they would meet the definition of an intermediary.

If they do not receive a fee, and they are not actively involved in the transaction, it is unlikely they are an AMP.

A casual introduction with no fee involved is not within scope.

 

Framers and Shippers 

Framers and shippers are used extensively in the art world, arranging the delivery, framing and installation of works of art on behalf of clients.

Sometimes AMPs will have their own framers and shipper that work directly for them and other times they will use independent companies.

Framers and shippers usually do not buy or sell works of art, so unless they are acting as an intermediary, are unlikely to be an AMP.

 

Interior Designers

Interior designers may fall under the definition of an AMP, if they are purchasing works of art for a client or facilitating a sale/purchase.

 

Museums

Museums may be within scope of the regulations depending on their company structure and activities. Many museums are charities so may fall out of scope - for more information on charities see ECSH42575.