The UK art and luxury goods markets are now under the microscope of sanctions enforcement and terrorist financing regulations, alongside the professional services that work with them. A new threat assessment from the Office of Financial Sanctions Implementation (OFSI), released in June 2025, lays bare the vulnerabilities of Art Market Participants (AMPs) and High Value Dealers (HVDs) to financial sanctions breaches, money laundering, and terrorist financing. And the risks don’t stop there. Banks, lawyers, and other professional services supporting these clients are increasingly at risk of becoming unwitting enablers or worse, complicit actors.
Art & terror financing: Hezbollah, Iran & the High-Value Market
The intersection of terrorism financing and the art market has emerged as a growing concern for regulators and law enforcement. Recent cases have drawn a direct line between high-value art, Hezbollah-linked individuals, and broader Iranian terror financing networks.
In April 2023, the US Treasury and Department of Justice charged Lebanese-Belgian national Nazem Said Ahmad—a US-designated Hezbollah financier—with orchestrating a global luxury goods and art trafficking operation across Beirut, Dubai, South Africa, Hong Kong, and elsewhere. He used shell companies, aliases, and forged documents to buy, ship, and conceal high‑value artwork and diamonds, effectively laundering terror funds. Ahmad’s wealth was tied to Hezbollah, with US sanctions listing him as a “financier for Hezbollah.”
In May 2025, UK TV art dealer Oghenochuko Ojiri, known for his appearances on Bargain Hunt, was sentenced to two and a half years imprisonment under the Terrorism Act for failing to report sales made to an individual he knew, or had reasonable grounds to suspect, was linked to terrorism. The buyer was the very same Nazem Ahmad, who was also designated by the UK as well as US authorities. Despite widely available information about Ahmad’s terrorist links, Ojiri did not file a Suspicious Activity Report (SAR) or take reasonable compliance action. His conviction is a chilling reminder of the legal consequences of compliance failures in this sector.
Iran’s role in art and terror financing
Iran has long functioned as Hezbollah’s principal backer, providing $700 million–$1 billion annually in financial support, weaponry, and training, making the group an operational proxy.
Iranian state institutions, including the Central Bank and the IRGC-Quds Force, feature prominently in shadow banking systems used to launder money, some of which has been traced to Hezbollah networks engaged in art and luxury goods trade.
Along with the new UK warning, 2022 US Treasury report identified vulnerabilities in the high-value art market, citing the ease of transport, opaque ownership, and shell-entity structures. While direct evidence of terrorist financing was limited, the same mechanisms used for money laundering also enable terror finance.
The sector’s weak spot: High Value Goods and hidden beneficiaries
According to OFSI’s 2025 threat assessment, Art Market Participants (AMPs) and High Value Dealers (HVDs) are involved in the trade of a wide array of luxury goods. This includes artwork, antiques, jewellery, wine, rare cars and fashion, collectively known as High Value Goods (HVGs). These items are highly portable, easily transferred across borders, and often stored or sold through opaque corporate structures. This makes them an ideal asset class for sanctions evaders and money launderers.
Key risks include:
HVGs owned or controlled by designated persons (DPs) under UK sanctions regimes—especially from Russia, Iran, and terrorist-related sanctions lists—are still circulating in the UK market.
Enablers (family members, associates, or professional advisors) acting on behalf of DPs use complex ownership arrangements and offshore entities to conceal provenance and ultimate control.
Sales in cash or via crypto below the EUR 10,000 threshold are used to evade reporting obligations.
OFSI judges it “highly likely” that HVGs held by sanctioned individuals remain unreported and are still actively traded within the UK.
Why banks, lawyers and professional services should be worried
This is not just an issue for art dealers and auction houses. Professional services across banking, law, and logistics are at direct risk:
Banks risk processing transactions involving sanctioned assets disguised as legitimate art sales or shipping arrangements. In such cases, they may face liability for facilitating sanctions evasion or failing to conduct adequate due diligence.
Lawyers assisting with sales, trust arrangements, or ownership transfers of HVGs can become complicit enablers if they fail to identify the involvement of a designated person.
Insurers, accountants, and logistics providers are often used as intermediaries to store, transport or validate assets, creating indirect exposure.
OFSI has already received sanctions breach reports involving HVGs from firms outside the art and luxury goods sectors, including financial and legal institutions. These actors are now in the regulator’s crosshairs.
Compliance expectations have changed
Since 14 May 2025, AMPs and HVDs are legally recognised as “relevant firms” under UK sanctions regulations. This means they now have mandatory obligations to:
- Freeze and report any assets linked to designated persons.
- Submit SARs where money laundering or terrorist financing is suspected.
- Respond to OFSI information requests or risk enforcement action, including fines up to £1 million or 50% of the asset’s value.
Yet OFSI warns that engagement with these obligations has been weak. Between April 2023 and March 2024, AMPs and HVDs submitted just 0.07% of all SARs, raising serious concerns about underreporting.
Common red flags for professionals to watch
Professionals working with AMPs or HVDs should apply enhanced scrutiny when they encounter the following red flags:
- Clients with links to sanctioned jurisdictions or known designated persons
- Transactions involving anonymous buyers, complex ownership structures, or rushed timeframes
- Deals involving under- or over-valued assets, unusual payment arrangements, or intermediary jurisdictions
- Golden passport holders or individuals unwilling to provide full KYC documentation
Key steps for compliance teams
The art and luxury goods sectors are increasingly exploited by criminal networks, corrupt elites, and terrorists looking to move assets covertly. For compliance officers, legal professionals, and financial institutions, the message is clear: due diligence on AMP and HVD clients is a regulatory imperative and a high risk area.
As recent convictions show, failure to act when suspicions arise may no longer be considered mere negligence, it could be criminal. In today’s sanctions environment, ignorance is a liability.
