The European Commission will soon downgrade the risk of money laundering and terrorist financing in the art market, despite having previously recommended new guidelines and specialist police units designed to tackle the “high” risk issue.
According to the minutes of an expert subgroup meeting on dialogue with the art market, first reported by the Financial Times, the threat level will be reduced from “high” to “moderate” in the EU body’s forthcoming Supranational Risk Assessment (SNRA) on money laundering and terrorist financing, slated to fall before the end of 2026.
The risk level is being downgraded on the recommendation of the commission’s financial markets directorate, which cited “limited evidence” linking art theft to money laundering or terrorist financing.
However, according to the minutes, the commission acknowledged the sector’s continued vulnerability to both crimes, because of both its opacity and the prevalence of intermediaries and cross-border trade. The market will still need regulatory oversight under the new “moderate” threat level.
Compliance is key
The EU-wide reassessment brings the commission’s risk level in line with France’s national assessment, which rated the risk in the art sector as “moderate” in 2023.
Jonathan Pergay, the legal and tax affairs officer for the French trade body Comité Professionnel des Galeries d’Art (CPGA), welcomed the European Commission’s decision. However, he said his organisation will continue emphasising to its 300 member galleries that their existing compliance obligations remain unchanged by the decision.
“Compliance is part of what makes galleries trusted intermediaries,” Pergay said. “For a long time, galleries have been portrayed as a particularly risky channel, without the data to support that view. A risk level based on facts rather than perceptions is good news for the trade.”
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The decision by the EU bloc also mirrors the UK’s 2025 National Risk Assessment, which downgraded art market participants from “high” to “medium” risk for money laundering, while the risk for terrorist financing remained at the previous “low” grade. This move also represented a significant shift in approach compared with a prior 2020 report, which noted that the art market was attractive for money laundering owing to “the ability to conceal the beneficial owners and final destination of art”.
Market-watchers credit the downgrade in risk to the introduction of more regulatory oversight and reporting. According to the UK government, 1,337 art market participants are now registered for HMRC supervision, despite the fact that many in the trade still find the administrative burden on small businesses to be excessive.
Banking may become easier
Susan J Mumford, chief executive and co-founder of UK anti-money laundering compliance platform ArtAML, told Ocula that the decision reflected an improved understanding of the risk in the sector since it came under regulation. She called the UK’s 2025 downgrade “a recalibration”, rather than a sign the art market had become “less attractive to money-launderers”.
Mumford emphasised that the legal obligations for the trade remain unchanged, reflecting the continued exposure in the trade’s “weak business-wide risk assessments, anti-money laundering policies that don’t reflect day-to-day practice and low suspicious activity reporting”.
One practical benefit of the downgraded risk status, which may hold true for the EU changes also, is that banking may now get easier for art businesses.
Under the “high” rating, banks subjected art businesses to repeated anti-money laundering reviews and some declined them as customers altogether. A “medium” rating, said Mumford, alongside evidence of compliance, “may start to ease that reluctance”.
The EU art market was first regulated in 2020, following the Fifth Anti-Money Laundering Directive, which obliged EU countries to require that art market participants perform customer due diligence on all transactions totalling more than €10,000.
In response to 2022’s SNRA, the EU’s Anti-Money Laundering Regulation, adopted in 2024, broadened the scope of entities subject to anti-money laundering and counter-terrorist financing rules to include dealers in “cultural goods”, and capped large cash payments at €10,000. The new regulation will come into force in mid-2027.
