OFAC Issues Advisory and Guidance on Use of High-Value Artwork to Circumvent Sanctions

On October 30, 2020, the U.S. Department of the Treasury’s Office of Foreign Assets Control made an advisory to underscore sanctions risks arising from dealings in high-value artwork[1] associated with persons blocked pursuant to OFAC’s authorities, including persons on OFAC’s List of Specialty Designated Nationals and Blocked Persons (SDN List).[2] The OFAC advisory discusses characteristics of the market for high-value artwork that pose sanctions risks. It also alerts art galleries, museums, private art collectors, auction companies, agents, brokers, and other participants in the art market of the need to maintain a risk-based compliance program to mitigate such risks. The advisory highlights the “Berman Amendment” to the International Emergency Economic Powers Act  (IEEPA) and the Trading with the Enemy Act (TWEA) does not categorically exempt all transactions in artwork from OFAC regulation and enforcement.