the art industry was doing with regard to AML policy.[1] Looking forward, he noted that Phillips was working on incremental steps towards a better policy-based on some of the same obligations imposed on banks regarding enhanced customer due diligence.[2] He said he believes this will lead to increased transparency from clients.[3] As such, Phillips' General Counsel stated he believed clients will not be surprised when Phillips begins asking for additional due diligence information, including ultimate beneficial owner information.[4]
Anti-Money Laundering, Sanctions & Counter-terrorism Financing Policy. Phillips' General Counsel also explained to the Subcommittee that in late 2018, Phillips was preparing to update its AML policy.[5] The current policy was issued on November 6, 2018 and included instructions on: Money Laundering; Sanctions; Due Diligence Process; Frequently Asked Questions; and Client Identification Checklist and Screening Requirements.[6] Counsel for Phillips stated "the issuance of the policy was then followed by mandatory training in all sale sites in 2018 for all staff."[7] Phillips' counsel continued:
Phillips currently screens all sellers and buyers—whether existing or new against sanctions databases. In addition, [art] agents are required to identify their principal and provide Phillips with KYC documentation in relation to themselves and their principal. Phillips insists upon ultimate beneficial ownership (UBO) information for all companies and does not rely upon third parties to carry out KYC—it is all handled in house. Phillips does not pay out to sellers and does not issue invoices to buyers without having full KYC documentation.[8]
4. Bonhams
Summary Controls & Procedures Manual. In April 2018, Bonhams U.S. issued its Bonhams U.S. Group Summary Controls & Procedures Manual (the "2018 Bonhams Manual") to ensure "that Bonhams and our stakeholders reduce the risk of fraudulent transactions and are compliant with all appropriate regulatory and taxation requirements."[9] The 2018 Bonhams Manual explained that the company would employ "a risk-based approach to AML [that] involves assigning differentcategories of risk (e.g. low, medium, high) to various types of client [s]. We have
- ↑ Id.
- ↑ Id.
- ↑ Id.
- ↑ Id.
- ↑ Id.
- ↑ Draft Phillips Anti-money Laundering, Sanctions & Counter-terrorism Financing Policy provided to the Subcommittee; Email from Counsel for Phillips to Subcommittee staff (Mar. 19, 2020).
- ↑ Email from Counsel for Phillips to Subcommittee staff (Mar. 19, 2020).
- ↑ Id.
- ↑ BON004674-4700.
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