OFSI Warns of Sanctions Risks in Art & Luxury Sectors in Latest Threat Assessment

The Office of Financial Sanctions Implementation (OFSI) has today published its Art Market Participants and High Value Dealers Threat Assessment Report, warning that designated persons (DPs) continue to exploit the UK’s art and luxury goods sectors to evade sanctions. This marks the fourth in a series of sector-specific reports issued by OFSI and arrives shortly after AMPs and HVDs were formally brought within the scope of financial sanctions legislation on 14 May 2025.

The report highlights how high value goods (HVGs) such as fine art, luxury watches, antiques, jewellery, and vintage wine remain attractive stores of value for DPs, particularly those subject to UK sanctions regimes relating to Russia, global corruption, and terrorism. Many of these individuals, OFSI notes, maintain “historical footprints” in the UK, along with assets that are at risk of being traded or concealed without the necessary licence.

Key Findings

The report makes two critical judgements:

1. It is highly likely that high value goods owned by sanctioned individuals in the UK have not yet been reported to OFSI.

2. It is likely that Russian DPs and their enablers have breached asset freeze prohibitions by transacting in HVGs.

   
   

OFSI draws attention to the role of professional and non-professional enablers, including family members and associates, in helping sanctioned individuals hide or move assets. Red flags include unusual payment arrangements (especially involving cryptoassets), complex ownership structures, and rushed transactions involving undervalued or overvalued goods.

Compliance Expectations

The inclusion of AMPs and HVDs as “relevant firms” under the Sanctions and Anti-Money Laundering Act means they must now:

• Report suspected sanctions breaches or designated persons to OFSI;

• Freeze any assets they identify as linked to sanctioned individuals;

• Fulfil additional obligations if covered under anti-money laundering (AML) regulations.

  
  

Failure to report breaches can result in fines of up to £1 million or 50% of the asset value, and/or up to six months’ imprisonment.

Real-World Case Studies of Sanctions Evasion

Two case studies featured in the report bring these risks into sharp focus. One recounts the conviction of a UK art dealer for failing to disclose dealings with an individual later sanctioned for terrorist financing. The other presents a fictional but plausible example involving a high-value wine transaction linked to a Russian DP, where evasive behaviour and lack of provenance triggered a report to OFSI and a Suspicious Activity Report (SAR).

OFSI’s Call to Action

With London a major hub for the global trade in HVGs, OFSI urges firms to strengthen due diligence, register on the National Crime Agency’s SAR portal, and stay alert to geopolitical changes that may affect sanctions regimes. Notably, between April 2023 and March 2024, AMPs and HVDs accounted for just 0.07% of all SARs filed, a figure OFSI deems “significantly lower than anticipated”.

Resources & Guidance

OFSI has issued detailed sector guidance alongside this threat assessment, including:

• Financial sanctions guidance for AMPs and HVDs.

• Links to AML supervisory guidance from HMRC.

• International recommendations from the Financial Action Task Force (FATF) on art and antiquities trade risks.

Read the full report here.