As an art dealer, you are prohibited from carrying out any transaction with any person or entity on the national asset freeze register. As its name suggests, the purpose of the asset freeze procedure is to prevent the provision of financial resources to a person under international sanctions. The issue of asset freezing must therefore be an integral part of your risk analysis process.
Over the past year, the national asset freeze register has been steadily expanding, with the addition of the names of Russian oligarchs and companies linked to them. As a result, we need to be even more cautious. The risk analysis required of art market professionals includes consultation of this register.
Let's clarify this often misunderstood concept. The French asset freeze list integrates the UN and European Union lists. Its main purpose is to identify individuals who have been designated as being involved in the financing of terrorism. Historically, these designations targeted Al Qaeda or the Taliban in Afghanistan. Russia's attack on Ukraine led to the adoption of 10 sanction packages in 12 months; to ensure their immediate effectiveness, France chose to use this asset freeze mechanism. In this case, the decision to freeze assets is also accompanied by an embargo on a list of products including “luxury goods” over 300 euros, which includes works of art, and the exclusion of Russian banks from the swift network, the international bank messaging system.
If you're a regular reader, you'll already know that a vigilance protocol must be put in place whenever a customer purchases one or more works of art for more than 10,000 euros. However, the asset freeze must be consulted for every transaction, regardless of the amount, from as little as €1. The LCB-FT imposes a systematic control of the assets freeze on all your customers.
Generally speaking, we look for the seller or the buyer on the assets freeze list. If the sale is made through an intermediary, you will need to check that the intermediary's name does not appear on the asset freeze list.
You can freely consult the asset freeze register, as it is public and available on the French government website. You can do this by filtering the results displayed (by Id, Regime, Name, First name, Type of nature). To help you in this process, Eunomart has developed an automatic search function for your customers. After identifying your customer (surname, first name, date of birth, country of tax residence, etc.), the software is able to determine whether or not you are dealing with a person listed in the register.
The penalties for non-compliance with the asset freeze are severe and cumulative:
- 5 years' imprisonment ,
- confiscation of the corpus delicti, the means of transport used, the goods and assets which are the direct or indirect product of the offence and,
- a fine equal to at least the amount and at most twice the sum involved in the offence.
