The purpose of the alert is the highlight the sanctions evasion, cultural property trafficking, and money laundering risks to the art storage sector and provide guidance on regulations and digital compliance.

The report details that criminals are finding ways to sneak into privately owned art storage facilities to conduct illicit activity. Specialised art storage facilities are often held by owners or collectors to keep artworks in a tax free, safe space where art investments are able to grow in value over time as price of artworks increase. These spaces are vulnerable targets for criminals seeking capital assets that can be liquidated when needed.

Criminals often conceal illegal movements by using financial services to sell, acquire, or move cultural property in and out of facilities to create an intermediary between transactions. Therefore, the alert warns companies to undertake due diligence enquiries.

The alert provides guidance for security services and how owners should conduct due diligence checks and ensure their storage facilities are up-to-date in their customer profiles and properly regulated. The NCA warned the criminals often move artworks into different jurisdictions to evade financial crime charges and tax benefits.

Martin Cheek, lawyer and managing director of SmartSearch, advised:

“The NCA alert warns artwork storage facilities to guard against financial criminals, It’s a raw reminder to all regulated industries of the risk of financial crime, and the importance of conducting regular due diligence checks to understand any change in a client’s circumstances, or in those of the people they represent.

“Client checks at onboarding followed by continuous monitoring helps seal the door to criminals. Firms should look out for changes in client circumstances, making sure they check against international sanctions on a daily basis. They should also watch out for the use of front or shell companies or complex corporate or trust structures, where the waters are muddied, and it isn’t clear exactly who is the ultimate beneficial owner.”

The alert was issued in conjunction with the Joint Money Laundering Intelligence Taskforce (JMLIT), UK law enforcement, and HM Treasury’s Office of Financial Sanctions Implementation (OFSI).