eprivateclient and thewealthnet quote Louise Paterson and Samantha Ruston on geopolitics and the art market
min readThe global art market is an important domain for high and ultra-high net worth collectors. Amidst geopolitical turbulence, how might the disruption of trade routes, imposition of sanctions, or reduced cross-border mobility, filter through to the top of the market?
Primarily, geopolitical stress could impact the art market through broader global economic change, such as longer term disruption that might weigh on art transactions. Nonetheless, factors such as changing tariffs can impose additional costs for buyers.
Other potential issues include the disruption of trade routes, which can result in an increased risk of delay or damage during transit, and heightened costs, due to backlogs and rising fuel prices.
Political change, trade wars, and new tax and policy regimes have increasingly tested the strength of existing regulatory frameworks. Global tensions can bring about “rapid policy changes, expansion of sanctions regimes, and trade protectionism,” among other economic impacts.
To prevent any unwanted legal or regulatory action, participants in the art market must continue to ensure compliance with sanctions regimes. This requires adequate screening processes, client and counterpart identity checks, and robust anti-money laundering practices.
Louise Paterson, Senior Associate, and Samantha Ruston, Associate in our Private Client team, comment in eprivateclient and thewealthnet:
Even where existing legal frameworks remain technically stable, geopolitical tensions will still have the power to reshape the commercial and regulatory landscape in which they operate. The involvement of multiple jurisdictions in a transaction – as is common with high value artworks – complicates this process, and this is compounded when any of the jurisdictions involved are exposed to geopolitical risk.
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