On October 30, 2020, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued an advisory on potential sanctions risks arising from dealings in high-value artwork (the “Advisory”). The Advisory follows a July 2020 report from the U.S. Senate Permanent Subcommittee on Investigations detailing how the art industry could be used to evade U.S. sanctions, notably in regard to sanctioned Russian individuals.
The Advisory focuses on the market for high-value artwork and provides guidance on mitigating risks related to transactions involving persons on the OFAC List of Specially Designated Nationals (“SDNs”) and territories subject to comprehensive sanctions (i.e., Crimea, Cuba, Iran, North Korea, Syria).
The Advisory targets art galleries, museums, private art collectors, auction companies, agents, brokers, and other participants in the art market. In describing the vulnerabilities in the market, the Advisory notes that the lack of transparency and high degree of anonymity and confidentiality in the sale and purchase of high-value artworks make the market attractive for illicit actors to obscure their identities and source of funds.
Continue Reading The Joy of Sanctions: OFAC Paints Picture of High-Risk Artworks