By Legal Futures Associate dospay
Why are luxury traders under increasing regulatory scrutiny?
Historically, anti-money laundering (AML) regulations have concentrated on cash-heavy industries. However, as financial criminals evolve, regulatory focus has widened to include high-value transactions conducted through bank transfers or digital means. This shift directly affects high-value dealers—businesses trading in luxury goods such as art, antiques, furnishings, and jewellery—who often facilitate large, discreet transactions for a discerning clientele.
These dealers are now at heightened risk of inadvertently enabling money laundering, particularly in transactions where customer identity checks and funds provenance are not rigorously verified. The UK government has responded with intensified oversight, mandating new obligations even where no cash changes hands. For those dealing in high-value goods, understanding and adapting to these regulatory shifts is no longer optional—it is essential for business integrity and operational continuity.
What is a High-Value Dealer under UK law?
A High-Value Dealer (HVD) is formally defined as any business that accepts or makes cash payments of €10,000 (approximately £8,500) or more in exchange for goods.
Traditionally, this category only encompassed businesses handling large sums in physical currency. Under existing legislation, such dealers are required to register with HM Revenue & Customs (HMRC), perform customer due diligence, and maintain comprehensive transaction records.
However, the landscape is changing. Regulatory authorities now recognise that significant financial risk exists even in cashless transactions. Consequently, there is growing momentum to expand the definition of HVDs to include businesses regularly facilitating high-value purchases, regardless of payment method.
This includes art dealers, interior designers and furniture suppliers, luxury jewellery/watch sellers, and even fashion retail at the higher end.
This shift towards a value-based model means that digital payments, bank transfers, and escrow arrangements may now trigger AML obligations that had previously reserved for cash deals.
What regulatory changes should luxury dealers be aware of?
Value over payment method
The pivotal change in AML enforcement is the emphasis on transaction value rather than form of payment. Businesses involved in goods transactions over €10,000 must now assess whether they are inadvertently falling within regulatory scope, even if they do not handle cash directly.
For luxury dealers, this means a client purchasing an artwork or bespoke furnishing via bank transfer could still necessitate identity verification, source-of-funds enquiries, and transaction monitoring. For interior designers carrying out FF&E procurement, that sanction and transaction monitoring is an ongoing obligation throughout the life of the procurement project.
Art Market Participants and cross-sector exposure
Since January 2020, UK AML regulations have formally included Art Market Participants (AMPs)—entities involved in transactions over €10,000 in artworks, regardless of payment method. While this directly applies to art dealers, it also affects any luxury trader who sources or brokers high-value art or antiques on behalf of clients, such as interior consultants or design-led retailers.
If your client’s business includes or overlaps with AMP activity, compliance obligations such as enhanced due diligence and HMRC registration may already apply.
Sanctions compliance from May 2025
From May 2025, businesses involved in any high-value transaction above €10,000—whether directly or through third parties—will be required to actively screen customers against UK and international sanctions lists. Where a match is suspected, there will be a statutory obligation to report it to the Office of Financial Sanctions Implementation (‘OFSI’).
This move is a direct response to increased geopolitical instability and high-profile misuse of the luxury goods market by sanctioned individuals. It adds another layer of operational risk for luxury dealers*, who must now navigate not only AML but sanctions compliance with equal vigilance.
* See also the recent fine issued to a luxury property management company for breaches of sanctions.
How can dealers stay compliant without internalising excessive burden?
For many luxury dealers, particularly smaller or boutique operations, the resource cost of implementing a full AML compliance framework in-house can be prohibitive. Conducting client due diligence, maintaining compliance logs, and managing sanctions screening requires specialist knowledge, administrative discipline, and ongoing regulatory awareness.
One practical solution is to use third-party managed procurement accounts, such as those offered by dospay. These accounts allow dealers to outsource key compliance obligations—such as client onboarding, identity verification, and transaction risk assessments—while maintaining control over the commercial aspects of the transaction.
By routing high-value payments through a secure, regulated procurement account, dealers benefit from built-in compliance protections without disrupting their core client relationships. This approach also offers clear audit trails and simplified reporting, ensuring full alignment with current and emerging AML expectations.
Why proactive compliance is a strategic asset
The evolving regulatory framework is not merely a legal hurdle—it is an opportunity for high-value dealers to demonstrate integrity, reliability, and professionalism. Clients, especially in the luxury segment, increasingly value discretion, transparency, and ethical standards. Businesses that proactively comply with AML obligations position themselves as trusted market participants—able to serve high-net-worth clients without risk of regulatory disruption.
Ignoring these obligations, by contrast, exposes a business to significant penalties, reputational harm, and potential criminal liability. Given the pace of regulatory evolution, especially in light of global events and intensified enforcement, luxury dealers must act now to assess their exposure and implement proportionate compliance strategies.
Conclusion
The era of associating AML regulation exclusively with cash is over. High-value dealers operating in the luxury goods space must now contend with a broader compliance landscape that encompasses all significant transactions, regardless of how money is transferred. With sanctions screening on the horizon and expanding definitions of regulated activity, the cost of inaction is rising.
Whether through in-house controls or third-party solutions like dospay’s managed procurement accounts, dealers must take steps to embed compliance into their transaction processes. Doing so not only satisfies regulatory demands—it preserves the trust, discretion, and reputational value that underpin success in the luxury marketplace.
For more information, see https://www.dospay.co.uk/topic/understanding-uk-money-laundering-regulations-for-luxury-interior-designers, which applies generally to all high-value dealers but is expressed particularly through the lens of interior designers.
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