The global art market faced a turbulent year in 2024, shaped by a global economic turmoil, rapid technological advancements, and a record number of elections. Legal and regulatory shifts added to challenges facing the sector. But which changes will truly matter? What are their implications for businesses? And perhaps most importantly, what’s next for the industry? 

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HMRC and Anti-Money Laundering (AML) Measures

While Anti-Money Laundering (AML) legislation has been gaining presence in the art market for years, 2024 marked a turning point in its practical implementation. By February, over 1,500 art market participants had registered with HMRC, whilst reports of intensified checks and enforcement actions by HMRC accelerated. 

The sector was keen to demonstrate its commitment to the obligations and drive towards greater transparency, but calls were soon being made (primarily by professional representatives, such as The Society of London Art Dealers) for a reconsideration of the transaction value threshold from £10,000 to £30,000, citing increased administrative burdens on smaller businesses. This call came during a period of heightened financial pressure, driven by soaring interest rates and persistent economic challenges, which also reignited debates over the viability of brick-and-mortar galleries.

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Sanction obligations accelerate

In January, the UK’s National Crime Agency issued a stark warning about sanctions evasion and money laundering risks linked to the art storage sector. Highlighting that high-net-worth individuals (HNWIs) often store art in specialist facilities, the agency expressed concerns that such storage solutions could be exploited by criminals seeking to conceal capital assets. The war in Ukraine continued to keep sanctions in the headlines throughout the year, and this December saw an announcement from the Office of Financial Sanctions Implementation (OFSI, a division of HM Treasury) that it would be extending all financial sanctions to explicitly include the art market [see our Compliance Quick takes for more details]. In addition to heightened due diligence and reporting obligations, the latter is the latest measure contributing to feeling that the sector is under increasing scrutiny from governments internationally. 

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Digital debate

Unprecedented digital innovation continued to reshape the art market in 2024. While the initial hype surrounding NFTs cooled, the unmissable growth of AI’s presence in society continued to prompt dialogue over legal frameworks addressing ownership, copyright, and data implications.

This year saw The European Union’s AI Act [Regulation (EU) 2024/1689] introduced in an attempt to establish consistent frameworks for AI usage, while UNESCO and China have also initiated discussions on regulating AI’s impact on creative industries. Meanwhile, precedents are being set in court rooms across the world, including the August ruling by a U.S. District Judge William Orrick, in August, which agreed that a group of visual artists could pursue claims against Stability AI, MidJourney, and DeviantArt for alleged copyright infringement in the training of their generative models.

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Economic and Environmental Pressures

Political instability added to uncertainty, notably to discussion around tax regimes. France tightened tax incentives for art acquisitions, prompting concern among high-net-worth collectors, while in the UK, rising national insurance rates added to the financial challenges already facing art businesses. Rising expectations on businesses to prioritise sustainability and awareness of carbon offset programs and stricter environmental standards simultaneously focused the industry on its shipping practices, material choices, and energy usage.

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So, what’s next?...

With so many major loose threads trailing out of 2024, it is likely 2025’s outlook will continue to focus on embedding AML into core business operations with heightened efficiency, whilst AI will continue to accelerate multi-lateral governance frameworks around technological advance. 

The introduction of EU Directive 2022/542 early in 2025, will see the application of more VAT regimes across the region, whilst in the UK, expect ongoing calls for a reduction of import VAT to pick up pace.

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To ensure you are meeting your obligations and keeping sales moving, use Arcarta. Book your complimentary consultation today.