Everyone agrees that anti-money laundering (AML) and know your client (KYC) regulations are an administrative nightmare, hitting small businesses who do not have the human resources of the bigger firms. One particular bugbear is the potential duplication of all the checks each time an art transaction is envisaged—even before any money has changed hands.
Now a new app, artpass ID, claims that it will simplify all these steps into a single click. Holders of the app will only have to pass identity and KYC checks once, by uploading their details, and then anyone with the app can access their verified identity and qualified KYC status instantly. There, of course, is the rub—because both will have to be members. However, since it is free at this level, the founders hope there will be widespread take up of the project.
Tiered prices
In fact, it is not quite free—the initial basic verifications cost a grand £2.99 per individual and £7.99 for corporate clients, but are reimbursed if artpass ID is used in an art purchase within six months of registration. Apparently, this basic check will ensure that someone is eligible to make transactions, without further verifications.
The next step is a customer due diligence (CDD) report, also free of charge, which the company says meets the requirements of pre-sales AML compliance. Only at the third level, the complete inspection report, does payment kick in, depending on the number of reports. These reports dig deeper into the basic information, looking, for example, at how the KYC information was obtained. Prices here are per number of reports and start at £249.
Former Christie’s compliance head
The app was founded by Dutch financial technology entrepreneurs David Dehaeck and Nathalie Haveman. Dehaeck was also the co-founder of Wunder, a blockchain-based digital art project.
The head of compliance is Rakhi Talwar, a solicitor by training and former global compliance head at Christie’s. She says that the project has been submitted to HMRC, the British tax authority, which, in its usual cautious way, is not prepared to actively endorse any such projects. But, HMRC says it has “no issues with the CDD model,” which is as good as it can get in this fraught area.