1. Purpose and Scope

 

This Anti-Money Laundering (AML) Policy sets out the procedures and controls to prevent and detect money laundering activities during the sale of high-value art. This policy applies to all employees, agents, consultants, and other representatives involved in transactions relating to the purchase or sale of high-value artwork through ArtULTRA.

 

2. Definition of Money Laundering

 

Money laundering is the process of disguising the origins of illegally obtained money, typically through complex transactions or by integrating illicit funds with legitimate financial transactions. This process is a criminal act and poses legal, financial, and reputational risks to businesses involved in high-value art transactions.

 

3. Legal Framework

 

This policy is in compliance with relevant anti-money laundering laws and regulations, including:

   - The USA PATRIOT Act (for U.S.-based companies)

   - The European Union’s Fifth Anti-Money Laundering Directive (AMLD5)

   - The UK Money Laundering, Terrorist Financing and Transfer of Funds Regulations

   - Any other relevant international or local AML laws applicable to ArtULTRA.

 

4. Risk Assessment

 

High-value art transactions are recognized as potential vehicles for money laundering. As an Art Market Participant, ArtULTRA undertakes regular risk assessments to identify and evaluate the money laundering risks associated with the sale of high-value art and implements proportionate controls and procedures.

 

5. Customer Due Diligence (CDD)

 

ArtULTRA will implement mandatory Customer Due Diligence for all transactions above €10,000 in value on a single transaction or linked transactions, or when there is a suspicion of illicit activity, regardless of the transaction amount. The CDD process includes:

 

• Identifying and Verifying the Customer: 

  • Obtaining and verifying personal identification (passport, national ID) and contact information of the buyer or their representative.

  • If the buyer is a corporation or trust, verifying who are its beneficial owners and sources of funds.

 

• Understanding the Purpose of the Transaction: 

  • Identifying the customer’s purpose in purchasing the artwork and confirming that it aligns with typical patterns for similar clients.

  

• Source of Funds Verification: 

  • Confirming that the funds used to purchase the art come from legitimate sources by obtaining evidence of income or financial history, particularly for transactions above €10,000;

 

Enhanced Due Diligence (EDD):

For high-risk transactions or when dealing with politically exposed persons (PEPs), ArtULTRA will conduct EDD, which includes deeper investigation into the customer’s financial background, business activities, and verifying relationships with involved parties.

 

6. Record Keeping

 

All records obtained through the CDD process, transaction details, and supporting documentation will be retained for a minimum of five years from the transaction date or longer if required by applicable laws. This includes:

 

• Customer identification documents

• Transaction records (amount, method of payment, dates)

• Communications and correspondence related to the transaction

 

7. Monitoring and Reporting

 

Transaction Monitoring: 

ArtULTRA will continuously monitor transactions to detect unusual or suspicious activity, including payment anomalies, rapid resale requests, or requests for third-party payment arrangements.

 

Suspicious Activity Reporting: 

ArtULTRA will report any transaction or attempted transaction that raises suspicion of money laundering to its Money Laundering Reporting Officer (MLRO) without delay.

 

The MLRO will assess the report and, if warranted, file a Suspicious Activity Report (SAR) with the appropriate regulatory authorities.

 

8. Payment Controls

 

Prohibited Cash Transactions: 

ArtULTRA will not accept cash payments for high-value art transactions over €10,000.

  

Third-Party Payments: 

Payments from third-party accounts or unrelated sources are discouraged and may only be accepted following enhanced due diligence.

  

Cryptocurrency: 

ArtULTRA does not accept cryptocurrency payments.

 

9. Politically Exposed Persons (PEPs)

 

Transactions involving PEPs pose higher money laundering risks. If a PEP or their family/close associates are involved in a transaction, Enhanced Due Diligence procedures will be implemented (as per clause 5 above)  to verify the legitimacy of the funds and ensure transparency in the transaction.

 

10. Employee Training

 

All employees and representatives involved in high-value art transactions will undergo annual AML training. This training includes:

 

• Understanding money laundering risks specific to art transactions

• Customer Due Diligence and Enhanced Due Diligence procedures

• Identifying and reporting suspicious activity

• Record-keeping requirements

 

11. Internal Controls and Audits

 

ArtULTRA will conduct regular internal audits to assess the effectiveness of its AML procedures and to ensure compliance with the AML policy. Audits will review transaction records, CDD files, SARs, and adherence to risk assessment measures.

 

12. Consequences of Non-Compliance

 

Failure to comply with this AML policy may result in disciplinary action, including termination of employment. Non-compliance may also lead to criminal prosecution under applicable AML laws and severe penalties for the company and individuals involved.

 

13. Policy Review and Updates

 

This policy will be reviewed annually or as required by changes in laws and regulations to ensure its continued effectiveness and relevance. The MLRO is responsible for recommending any updates to this policy for approval by ArtULTRA’s CEO.

 

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This policy has been reviewed and approved by:

 

CEO/Owner: Alice Black

Money Laundering Reporting Officer (MLRO): Alice Black

Date: 14 November 2024

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