ECSH54575 - Works of Art

Works of Art

Regulation 14(1)(f) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) gives us the definition of a work of art for the purposes of AML supervision. The definition is taken from the Value Added Tax Act 1994 (“VATA”):

14(1)(f)“work of art” means anything which, in accordance with section 21(6) to (6B) of the Value Added Tax Act 1994 (value of imported goods), is a work of art for the purposes of section 21(5)(a) of that Act.

The definition of “work of art” in 21(6)(a) VATA is summarised in sub-section 6 as:

  • a painting, drawing, collage, decorative plaque, or similar picture
  • an original engraving, lithograph, or other print
  • an original sculpture or statuary
  • a sculpture cast
  • a tapestry or other hanging
  • a ceramic
  • an enamel on copper, or
  • a photograph

but not:

  • a technical drawing, map, or plan
  • “any picture comprised in a manufactured article that has been hand-decorated”, or
  • scenery (including backcloths).

As can be seen, there are some limitations to what works of art are included in the scope of the MLR 2017. It is important for staff to be aware of what is in or out of scope.

 

Limited Editions

There are some restrictions within Section 21(6B) of the VATA for works of art that are limited editions, specifically for sculpture casts, tapestries and hangings, enamels on copper and photographs.

In the case of sculpture casts, the edition is limited so that the number produced from the same mould does not exceed eight.

In the case of tapestries and hangings, the edition is limited so that the number produced from the same design does not exceed eight.

In the case of enamels on copper:

  • The edition is limited so that the number produced from the same design does not exceed eight.
  • Each of the enamels in the edition must be numbered and signed.

In the case of photographs:

  • The edition is limited so that the number produced from the same exposure does not exceed thirty; and
  • Each of the prints in the edition must be numbered and signed.

If the editions for these specific categories of works of art exceed the allowed number of editions, they are not deemed to be works of art for the MLR 2017.


Antiquities

An antiquity is an object obtained from archaeological excavations or dismembered elements of archaeological discoveries, historical monuments, or archaeological sites. This broad working definition includes objects that are more than one hundred years old. Some examples of antiquities may include statues, inscriptions, coins, and engraved seals.

If an object could be described as both a work of art and an antiquity, the work of art definition applies, and the transaction would be within scope of the MLR 2017 (assuming it exceeds the relevant threshold).

For example, an Ancient Greek sculpture could be described as both a work of art and an antiquity, as it meets the definition contained within S.21(6) and S.21(5)(b) VATA. This would be in scope of the MLR 2017.

More information on the money laundering risk that the art and antiquities market pose can be found in a report published by the Financial Action Task Force (FATF).

 

Digital Art

Digital art, such as digital paintings, drawings, collages, decorative plaques or similar pictures fall within scope of the MLR 2017 by virtue of being “executed by hand” under Section 21(6)(a) if it is produced by an artist using digital tools such as styli, pens and brushes, however the exact method of production may be difficult to establish with any certainty.

AI generated artwork is not currently within scope of the MLR 2017. 

 

NFTs

Non-Fungible Tokens (NFTs) are unique digital tokens that can represent a unique item such as art. In some cases, NFTs have been made purely for the purpose of money laundering, however, they are not currently within scope of the MLR 2017. 

If you are unsure of whether an item falls within the definition of a work of art and therefore whether it is in or out of scope for the purposes of MLR 2017, you should initially consult with the technical specialists. 

 

Giclée prints

Giclée is a French term meaning “to spray”, referring to how an inkjet printer works and how giclee prints are usually produced. These large format inkjet printers use small spraying devices that can both match colour and apply ink precisely, giving artists a high-quality print of their original art.

These prints are not covered by the VATA definition of work of art, as that definition only includes prints that are produced from plates executed without using any mechanical or photomechanical process.