Here is the complete summary:
What Is This Document?
This guidance is produced by the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, the authority for the implementation of financial sanctions in the UK. It provides financial sanctions guidance for entities and individuals that operate in the sale or trade of high value goods, especially those trading internationally with regions that may be subject to UK financial sanctions restrictions.
In short: if your business buys, sells, stores, insures, or transports high-value goods — art, luxury cars, precious metals, jewellery, fine wine — this document sets out your legal obligations under UK financial sanctions law.
Who Does This Apply To?
High Value Dealers (HVDs)
A “high value dealer” is defined as a firm or sole trader that by way of business trades in goods (including an auctioneer dealing in goods), when the trader makes or receives, in respect of any transaction, a payment or payments in cash of at least £10,000 in total, whether the transaction is executed in a single operation or in several operations which appear to be linked. This refers to physical cash only and does not include bank transfers or digital payments.
Art Market Participants (AMPs)
An art market participant is defined as a firm or sole practitioner who is registered or required to register with HMRC as an art market participant under the Money Laundering Regulations. Their obligations apply when they trade in or act as an intermediary in art sales of £10,000 or more, or store works of art worth £10,000 or more for a single person.
Both categories were added to the list of “relevant firms” subject to financial sanctions reporting requirements from 14 May 2025.
Why Does This Sector Get Special Attention?
The UK is a major international hub for the trade of high value goods, including art, antiques, luxury cars, precious metals and gemstones, and for investment in wines and whiskies. In 2023, global art sales were USD $65 billion and the UK had the third largest share at USD $11.05 billion, accounting for 17% of the world market.
This scale, combined with the sector’s characteristics — high-value, portable, often privately traded — makes it attractive to sanctioned individuals seeking to move or hide wealth.
How Sanctioned Persons Try to Exploit This Sector
The guidance identifies several red flags to be aware of:
Shell companies and intermediaries. Intermediaries and shell companies are often used to source, buy, or sell high value goods, and any associated payments. Such anonymity and obfuscation has been used to conceal the involvement of a designated person in a transaction.
Asset movement. The movement of assets, including the sale of high value assets that were previously associated with a designated person, by family members or otherwise on their behalf, where funds are then disbursed offshore through secrecy jurisdictions, is an indicator suspected of being used to evade sanctions.
Unclear payment sources. It may be indicative of sanctions evasion if there is a lack of clarity on the source of payment or funds, a concealment of the ultimate beneficial owner of the goods, transactions being made through offshore accounts, or a change in payment arrangements.
Difficulty tracing goods. It is commonplace for goods to move between jurisdictions, making such movements less noteworthy when being done for the purposes of sanctions evasion — precious metals and stones in particular are very durable and effectively untraceable.
Digital assets. Cryptocurrencies and NFTs may be used by designated persons in an effort to circumvent restrictions applied through financial sanctions. Those using, trading in and dealing with cryptocurrencies or NFTs are also subject to these regulations and must apply due diligence.
What Are Your Main Obligations?
1. Due Diligence
The onus is on you to ensure that you have put in place sufficient measures to ensure you do not breach financial sanctions. Enhanced due diligence checks on your customers and payment chains may be needed.
Practically, this means routinely checking the UK Sanctions List — not just when you start a new client relationship, but at every significant stage of a transaction, since the list is updated continuously.
2. Reporting to OFSI
Reporting obligations apply to relevant firms who are required to inform OFSI as soon as practicable if they know or have reasonable cause to suspect a person is a designated person or has committed a breach. When reporting to OFSI you must include the information or other matter on which the knowledge or suspicion is based, and any information you hold about the person by which they can be identified.
If the suspect person is actually your customer, you must also report how much in funds or assets you are holding for them.
3. Freeze and Stop
If you discover a client or counterparty is sanctioned, you must immediately stop dealing with them, freeze any assets you hold on their behalf, and notify OFSI.
4. Ownership and Control
An asset freeze and/or some financial services restrictions may apply to entities or individuals which are owned, held or controlled, directly or indirectly, by a designated person. Those entities or individuals may not be designated in their own right, so their names may not appear on the sanctions list. However, those entities and individuals are also subject to financial sanctions.
The ownership threshold that triggers this is more than 50% of shares or voting rights, or effective control of the entity.
What Are the Penalties for Getting This Wrong?
The consequences are serious. OFSI has powers to impose monetary penalties of up to £1 million or 50% of the total value of the breach, whichever is higher. Breaches of financial sanctions are also a serious criminal offence, punishable by up to 7 years imprisonment on conviction on indictment, and up to 12 months on summary conviction in England and Wales.
Failure to comply with reporting obligations is itself an offence. A person who commits this offence is liable on summary conviction to imprisonment for a term not exceeding 6 months, or a fine, or both.
The guidance includes a real-world case study: an investigation that concluded in 2023 found that around £1 million of artwork belonging to a US-sanctioned terrorist financier was being stored in warehouses in the UK. The artwork was seized and later forfeited by law enforcement under the Proceeds of Crime Act, and a man was arrested on suspicion of terrorist financing.
Financial vs. Trade Sanctions — An Important Distinction
OFSI deals with financial sanctions and the Department for Business and Trade (DBT) deals with trade sanctions. These different types of sanctions have differing processes, for instance in licensing activity. It is therefore important to consider the relevance of both financial and trade sanctions to your business.
In practice: OFSI handles the “who” (frozen assets of designated persons), while DBT/OTSI handles the “what” (restricted goods and services). A business in the high-value goods sector may need licences from both.
⚠️ What Changed in the May 12, 2026 Update
The guidance was updated on May 12, 2026 — the day before the Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026 came into force — to reflect one substantive legal change:
The reporting threshold currency switched from euros to pounds sterling.
Previously, the definitions of “high value dealer” and “art market participant” referenced a threshold of €10,000. Across all UK sanctions regulations, the definitions of high value dealers and art market participants within the relevant firms regulations are being updated so that monetary thresholds are expressed in pounds sterling (£) rather than euros (€). In particular, the €10,000 threshold is being replaced with a £10,000 threshold.
The guidance now reflects this: the £10,000 figure appears throughout sections 2.1 and 2.2 in place of the old euro amount.
This aligns sanctions reporting obligations with upcoming changes to the UK’s money laundering regulations, so firms are not reporting in two different currencies. The Explanatory Memorandum describes this as a technical alignment measure rather than a change in policy, though the practical sterling equivalent of the old euro threshold will vary with exchange rates.
Practical effect for businesses: If your compliance systems and internal policies referenced €10,000 as the trigger for cash-transaction reporting (HVDs) or art transaction/storage reporting (AMPs), they should now reference £10,000.
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