AMLD5 / AMLD6
European Union Anti-Money Laundering Directives 5 and 6 that expand scope to “persons trading in works of art” and strengthen criminal liability for money laundering offences.
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Glossary of Art-Market Compliance and Payments Terms
Definitions for key compliance, payments, and identity terms used across Proofenance resources and documentation.
AML retention
The requirement under MLR 2017, AMLD5/AMLD6, and similar regimes to keep CDD and transaction records for a set period (e.g. five years) after the end of the relationship or transaction.
Art Market Participant (AMP)
UK term under MLR 2017 for businesses trading or storing art at/above EUR 10,000; supervised by HMRC.
Beneficial Owner
The natural person(s) who ultimately owns or controls a customer or on whose behalf a transaction is conducted.
BEC (Business email compromise)
Fraud where attackers compromise or spoof email to divert payments or obtain sensitive data; a frequent risk in art-market settlements and payment instructions.
CDD (Customer Due Diligence)
Identification and verification of customers and beneficial owners with risk assessment of purpose and intended nature of the relationship.
Consignment
An arrangement where an owner (consignor) delivers artwork to a dealer or auction house to sell on their behalf; the dealer or auction house holds the work until sale or return.
Consignor
The owner who delivers artwork to a dealer or auction house for sale under a consignment arrangement.
Counterparty
The other party to a transaction (e.g. buyer, seller, payee, consignee); identity and role should be verified as part of KYC and payment controls.
Curatorial provenance
The history of an artwork’s ownership, exhibition, and attribution as established by art-historical research, experts, and catalogues raisonnés. Distinct from financial provenance; Proofenance resources do not provide or attest to curatorial provenance.
EDD (Enhanced Due Diligence)
Additional checks for higher-risk customers, geographies, products, or transactions, often requiring senior approval and source-of-funds/wealth verification.
Financial provenance
Documentation that ties an artwork to verified payment and identity records (who paid, when, and how), supporting ownership evidence and audit. Distinct from curatorial provenance.
FATF
Financial Action Task Force; publishes typologies and standards for AML/CFT, including studies on art and antiquities markets.
FinCEN CDD Rule
U.S. rule requiring covered financial institutions to collect beneficial ownership and control information; informs prospective U.S. art-market requirements.
Freeport
A secure storage facility, often in a special customs or tax zone, where high-value goods (including art) can be stored with deferred or reduced tax and customs exposure; cited in FATF and sanctions typologies as sometimes used to obscure movement or ownership of goods.
GDPR-safe redaction
Redacting personal data in documents so that shared copies comply with data minimisation and storage limitation under GDPR while retaining non-personal information needed for audit or proof.
High-risk jurisdiction
A country or territory identified by FATF or national authorities as having weak AML/CFT controls or elevated risk, warranting EDD.
KYC (Know Your Customer)
The process of identifying and verifying the identity of customers and, where relevant, beneficial owners, as required under AML regulations; often used alongside CDD.
Linked Transactions
Multiple payments or deals that are connected (e.g., same buyer/beneficial owner, common address or agent) and must be aggregated for threshold calculations.
MLR 2017
UK Money Laundering Regulations 2017 setting AML obligations for AMPs and art storage operators.
PEP (Politically Exposed Person)
Individuals with prominent public functions, plus family members and close associates; subject to EDD and ongoing monitoring.
Red flag
A sign or pattern that may indicate money laundering, sanctions evasion, fraud, or other illicit activity and that warrants further investigation or escalation.
Sanctions
Government or multilateral measures (e.g. asset freezes, trade restrictions) against designated persons or jurisdictions; art-market participants must screen and block sanctioned parties.
SAR (Suspicious Activity Report)
Report filed with a financial intelligence unit (e.g., UK NCA, U.S. FinCEN) when there is knowledge or suspicion of money laundering, terrorist financing, or sanctions evasion.
Source of funds / source of wealth
Evidence or explanation of where money used in a transaction came from (source of funds) or how a customer accumulated their assets (source of wealth); often required under EDD for higher-risk customers.
Structuring
Splitting transactions or payments to evade reporting or threshold-based controls.
Typology
In AML and sanctions, a pattern or method of illicit activity (e.g. use of freeports to obscure movement); regulators publish typologies to help firms spot red flags.
U.S. AML Act 2020
U.S. legislation expanding AML expectations, directing FinCEN to regulate antiquities and consider broader art-market coverage.