Money Laundering, NFTs and artists selling their own work.

NEW WEBPAGE: Money Laundering and the Art Market

Back in April 2021, I wrote about how I needed to update my Art Business Info for Artists website for new law, rules and regulations for the Art Business and Artists.
For example:

• completely new law and regulations relating to Money Laundering in the Art Market

• updates for existing law and regulation eg international trade and shipping for post Brexit ramifications (some is done - but this is still a work in progress as things work their way through - I'm waiting for the resolution of the Irish angle)

I started my Money Laundering Page - but it soon became clear that there were going to be a lot more developments so I held off from Publishing.

A number of other industry sectors, such as banking, have long been the subject of an anti-money laundering regulatory framework. The reason for now extending that framework to the art market is a concern that the art market could be used by criminals to launder the proceeds of crime such as drug trafficking, modern slavery, tax evasion, corruption or theft.

Today I published the new page - in part in response to an artist friend who wrote to me about the nuisance (scam) communications relating to NFTs - to which my response was "they're scams - it's all about money laundering!" 

However to write about the NFTs I needed to provide some context in terms of the MEGA changes in law and regulations which MUST now be complied with by a variety of those who are active players in the art market - so I can highlight how most NFTs approaches to artists are linked to money laundering. 

It's all about a very welcome exemption from the Regulations for artists trading their own art.

NEW: Money Laundering & the Art Market

So this is my new page: Money Laundering & the Art Market: Anti Money Laundering (AML): Law, Regulations and Practice

Plus here's the main reason why I held off.......

• The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 took effect on 10th January 2020. This introduced the notion of the Art Market Participant who must comply with the regulations
• The 2019 Regulations indicate that the definition of Art Market Participants (AMPs) is as follows

  “a firm or sole practitioner who by way of business trades in, or acts as an intermediary in the sale or purchase of, works of art and the value of the transaction, or a series of linked transactions, amounts to 10,000 euros or more”

• In 2022, the Money Laundering Regulations related to the draft legislation recorded the fact artists are not included as AMPs 

The changes introduced mean that from 10 January 2020, AMPs as defined in the MLRs (which excludes artists selling their own work (my underlining) – see paragraph 19 below) must: 

• Register with HMRC before they carry on with their business, where this involves a transaction of 10,000 euros or more, or a series of linked transactions of 10,000 euros or more 
• Carry out a written risk assessment of the extent to which they are exposed to money laundering 
• Maintain a written prescribed range of policies, controls and procedures 
• Carry out CDD measures on customers before they conclude a transaction 
• Appoint a nominated officer 
• Train staff appropriately 
• Report suspicious transactions to the authorities 
• Keep appropriate records of CDD and of transaction

• Last month (6th February 2023), the British Art Market Federation's Guidance on Anti Money Laundering for Art Market Participants - approved by HMRC - was published and is the current up to date summary of how the law now works for different organisations and people participating in the art market and selling art.

This is the relevant link to the supporting HMRC Page Guidance - Money laundering supervision for art market participants

This is the new guidance on artists in relation to AMPs ( my bold )

19. Artists selling their own work, whether as an individual/sole practitioner or through a business they own, are not within the scope of the MLRs, and so are not required to register as an AMP. This extends to sales of an artist’s own work through their business, which only sells their work (but not for sales of other artists’ work if also sold through their business). Similarly, sales out of an artist’s estate, or sales of an artist’s work by someone employed by the artist, or the artist’s business, to sell the artist’s work, are not within scope of the MLRs.

How this affects artists and NFTs

The major change affecting artists is that artists are now NOT identified as "art market participants" (AMPs - who must register and comply with all the legislation) any more IF they are only selling their own art.

It's odd how artists are now being bombarded - mainly via Instagram - with requests to make their artwork available for NFTs.

Hence, given they are excluded from the monitoring requirements, artists are now prime targets for those wanting to launder money.

So if you are one of those being bombarded with NFT requests:

• just be aware, and stay away from unconventional sales of unconventional art commodities if you want to play it safe and avoid being involved with money laundering.
• make NFT a term which means that a message cannot be sent to you
• ALWAYS check that you know who you are dealing with - particularly if the transaction is international.

NOTE: I've still to do a detailed note and update about NFTs for the Money Laundering page.

New rules and regulations for Art Business - and Artists

I'm trying to catch up on the amount of change in law and regulations impacting on both artists, art organisations and the art market in the last 18 months.

I'm creating new resource pages for:

• international shipping 
• rules of origin
• export licences
• money laundering regulations for art market participants where a transaction (or series of transactions with the same buyer) exceeds £10,000

Import and export of artwork etc

Since 1st January 2021, 

• I've had LOTS of detailed queries about HOW to import / export art without falling foul of the new regulations
• there has been huge traffic to my Art Business Info for Artists in relation to international shipping and the import or export of art (and other created artworks and/or art material)

As at the beginning of January, there wasn't much to go on in terms of what people needed to do post Brexit - so I held off making changes until the situation improved.

I'm now very slowly slogging my way through the HUGE amount of new documentation from HMRC and various government departments which relates to the import / export of art and art materials post 1st January 2021 i.e. post the UK leaving the EU.

My brain hurts! 

View of the new page on Rules of Origin on At Business Info for Artists

To date:

• I've got one new page up - on "Rules of Origin" 
• in the SHIP ART section of Art Business Info for Artists
• it's a dedicated page under International Art Shipping: How to ship / export art
  to other countries
• I'm working on Export Licences - and when these are required - which will hopefully publish this week.
• these are required in relation to specific types of art over a specific valuation

I've still got to get my head around the Northern Ireland question and the border in the Irish Sea....

Mandatory Money Laundering Regulations for all Art Market Participants

ALERT!!! Plus I know I need to create a NEW page related to Money Laundering Regulations for Artists (and Art Galleries etc.) in the MONEY section. 

This WILL impact on more than a few artists, selling exhibitions, art societies and art galleries because

• The art market is a known target for money laundering and is officially regarded by HMRC as "high risk"
• The EU Fifth Anti-Money Laundering Directive (5AMLD) was enacted into UK law with effect from 10 January 2020 and anti money laundering compliance has NOT BEEN OPTIONAL since 10th of January 2020
• The new regulations require a LOT of information to be collected and formally recorded and retained in relation to purchasers of artwork valued (as one lot or an accumulation) above the equivalent of £10,000

To be exempt, an artist (or art organisation) must be 

Not trading in or acting as an intermediary involving a “work of art” in a single transaction, or a series of linked transactions of £10,000 or more.

So basically, every time you price and deal in an artwork above £10,000 you (or your agent) 

• MUST register to comply with the Regulations and 
• MUST maintain all appropriate records - which will be open to inspection by those monitoring compliance (think VAT records!)

Art Market Participants (AMPs) which includes any person or organisation dealing in art - have until 10th June 2021 to register to comply with the Money Laundering Regulations (i.e. it was deferred because of the Covid-19 pandemic).

See for example The Art Newspaper's article (updated in March 2021) The art market is 'high risk' for money laundering, so ignore new regulations at your peril

More on this when my new page is published in the near future.

The pages improve with age!

As always with these sort of initiatives my first published page is the best I can do at the time. HOWEVER they always improve over time as:

• I find more information 
• fill the gaps in advice
• make the entire page more related to the art business - while at the same time providing the context for "what an artist needs to know" (or art gallery or art collector!)

Trump increased the trade tariff for Prints by 25%

I had an interesting enquiry on my art business news blog - which struck me as potentially relevant to a lot of people. Or at least those producing prints.....

Here's the question

can I please ask whether you are currently aware of the latest situation regarding the recently imposed 25% US import tax on printed works from the EC, including on lithographs and photographs?

I work with the photographer [name] and we have contacted several sources regarding this, including our own government, and none have been able to confirm whether this tax still applies now that the UK has left the EC.

We would therefore very much appreciate your understanding of the situation.

Bottom line it appears that prints and postcards will now attract 25% import tax when imported into the USA.  Making them 25% more expensive.

I won't go into the whys and wherefores bit it appears that this is a retaliatory trade tariff strike by Trump who is annoyed that the EU subsidised the airbus and undermined the competition from whatever aircraft the US was producing. Which is ironic given that airlines have grounded so many planes recently and many people are completely rethinking the wisdom of air travel in relation to the planet.

Anyway....

I started to look into this and found various articles with some alarming headlines and content

• 'A giant wall': art world feels the pinch of Trump’s 25% import duty on printed works | The Art Newspaper
• New U.S. Tariffs Could Hit Some Prints, Photographs from Germany, United Kingdom | Art News

A decision in a 15-year trade dispute between the United States and the European Union about the manufacturing of airplanes could result in a price hike for American buyers of certain types of photographs and prints.

Starting October 18, the U.S. will impose a 25 percent import duty on all of the following coming in from the U.K. and Germany: printed books, brochures, leaflets, printed matter in single sheets, lithographs on paper or paperboard created in the last 20 years, and pictures, designs, and photographs printed in the last 20 years. Such import costs could potentially be passed along to buyers. (Art News)

Now the trade tariff applies to the EU (as I understand it) but the UK has left the EU - so does it apply to UK prints, photos?

Moreover should it apply to UK prints and photos made in the last 20 years?

I wasn't entirely certain about this - primarily because the website of the US Office of the United States Trade Representative is opaque beyond a joke and how anybody makes any sense of anything is beyond me. Any official publications seem to delight in saying what they mean in plain English as opposed to tortuous legalese (which has its place - but as the only explanation is a complete nonsense!)

However I'm an ex-government bod used to inspecting, auditing and digging around in official documents to work out what's going on and it would appear that there is indeed a very real issue of substance.....

....and maybe a way out!

I'm reproducing below extracts from the documents I finally tracked down. (Thank goodness for press releases! 2019-10-02 U.S. Wins $7.5 Billion Award in Airbus Subsidies Case)

The penalty paragraph relating to lithographs and prints

This identifies very clearly that the UK is in the frame for penalties relating to certain products including various printed items.

extract of Federal Register / Vol. 84, No. 196 / Wednesday, October 9, 2019 / Notices 54249 
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket No. USTR–2019–0003]
Notice of Determination and Action Pursuant to Section 301:
Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute

Harmonized Tariff Schedule of the United States (2020) Revision 15 re. trade tariff 4911

This is the document which explains the additional penalty being imposed by the US in relation to the enforcement of WTO right relating to the large Civil Aircraft Dispute.

Basically they are seeking a VERY long list of PENALTY trade tariffs to make-up for the damages they have been awarded amounting to $7.5 billion.

Brexit #2: The Pre-Election Update

The government has revved up all its advice pages on Brexit on the GOV.UK website ready for going into "purdah" when Parliament rises tomorrow, prior to the General Election on 2012.

This post is about the latest updates issues prior to the change in what can and cannot be done or said. It's especially relevant to

• all those who trade outside the UK
• all those who are not living in their country of birth.

You can also read my first post Brexit #1: Do or Die? About which one might comment that Boris is not dead in a ditch somehere

Image by Tumisu from Pixabay

What is "purdah" in an election context in the UK?

For those who have never worked for the government (unlike me) "purdah is a technical (and quite possibly an inappropriate) term to refer to the constraints on government activity during the period of time between

• the dissolution of the governing administration and 
• the swearing in of the new government.

This time around, this will cover an approx. six week period from 6th November to 12th December 2019. 

There are restrictions on what a government can do during this period and very tight restrictions on all publicity. see 

• Parliament.uk | Pre-election period (Purdah)
• Institute of Government | 'Purdah': restrictions on government activity during an election campaign
• Local Government Association | A short guide to publicity during the pre-election period, known as 'purdah'.

Receive Brexit Updates 

You can sign up for updates on Brexit.

Which is how come I got an email from the HMRC part of the GOV. UK website 4 hours ago to say this

The UK government has agreed an extension to the Brexit deadline until 31 Ja‌nu‌ar‌y 2020. 

HMRC will continue to help businesses prepare for Brexit in all scenarios, including the possibility of the UK leaving the EU without a deal on 31 Ja‌nu‌ar‌y 2020.

• Many of the steps that you have already taken to get your business ready for Brexit will still be useful preparation for the UK leaving the EU, with or without a deal:
• if you have received an EORI number starting with GB, please retain this number, your EORI number will remain valid for use in trade with businesses based in the EU if the UK leaves the EU without a deal – your EORI number can be used now to trade with businesses based outside of the EU
• if you are an importer and have registered for Transitional Simplified Procedures (TSP), you should retain your letter of approval – it will remain valid if the UK leaves the EU without a deal
• if you received a letter from HMRC telling you that you’ve automatically been registered for TSP, we will be writing to you again soon to authorise you to use it to import TSP standard goods from the EU if the UK leaves without a deal – please retain these letters and your TSP number.

To find out more about the steps you need to take to get ready for Brexit, go to GOV.UK.

Then on the official Brexit Page https://www.gov.uk/brexit it says this

Preparing your business for Brexit

Check how to get your business ready for a no deal Brexit.

• For example, you must take action if you export goods to the EU or transport goods out of the UK by road.
• Also check what you must do if you 
• import goods from the EU 
• or sell services to the EU.
• There are different rules for moving goods between Ireland and Northern Ireland.

Visiting the EU

To visit Europe after Brexit there are things you need to do before you travel.

• For example, you will need to check your passport, get travel insurance which covers healthcare, and get the right driving documents.
• Visit Europe after Brexit

Living and working in the EU

• Living and working in an EU country after Brexit depends on the rules in that country.
• You may need to register or apply for residency. 
• You should check that you’re covered for healthcare. 
• You may also need to exchange your UK driving licence for a licence issued by the EU country where you live. 
•   Check what you must do in the country where you live 

Staying in the UK if you’re an EU citizen 

• Check if you need to apply to the settlement scheme if you or your family are from the EU, or from Switzerland, Norway, Iceland or Liechtenstein. 
• Check what you need to do to stay in the UK

Brexit: check what you need to do if there is no deal

• Brexit: check what you need to do if there is no deal

I still need to get my head around all this - but thought I'd get the summary drawn to your attention....

.....while you think all you need to do in the next couple of months is christmas shopping and sending off the artwork ordered from your website!

Brexit #1: Do or Die?

I'm going to start writing periodic posts which either provide:

• pointers on things to think about re. Brexit
• feedback on what seems to be happening / changing (or not) post 31 October - should that be the eventual "do or die" date!

This is prompted by the fact I wrote

• detailed commentaries on the art economy back in 2008 - and periodically thereafter - as went into recession post the banking crisis and the subsequent impact on the wider economy and people's lives.
• a post commenting on a question about Brexit last week in the Facebook Art Fair Buddies Group

This was the gist of the question. There's a bit more to it - but in essence this is the conundrum many people are facing

Does anyone have any ideas of how a No Deal Brexit is likely to affect us as artists and crafters who make a living selling to the public?

Here's what I had to say - revised for the opportunity to format on Blogger - and the opportunity to add in more reflections.

Posts will either be on this blog and/or on my Art Business Info. News Blog - which you can subscribe to. Probably bigger ones on this one - and smaller updates on the other blog.

DO OR DIE?

The emphasis is emphatically

• NOT going to be on the politics 
• it'll be about 
• how to meet the challenge of Brexit for your art business and 
• how to share what works and 
• how to solve problems.

Comments will remain switched off on this blog - however Facebook posts linking to posts about Brexit do provide an opportunity for practical comments ONLY (political comments will be deleted).

What it's like in the art market during a recession

photograph of a hurricane - lots of turbulence in the atmosphere and scope to blow people and structures off their feet

I wrote quite a bit about the art economy during the recession following 2008.

BASIC FACTS are that

1. Uncertainty causes people to tighten their metaphorical money belts - and they put buying discretionary goods like art on pause. It lasted a long time.  We've seen some evidence of that already.
2. Those who are well off are mostly unaffected and continue to buy - at Christies and Sothebys - as before. Hence if you are pitching at the wealthy you probably have less to worry about.
3. If a lot of people lose their jobs then there's a very big dip in disposable income and buying art and galleries start closing, often with little notice (and a lot did, mainly because they weren't run very well as businesses and hadn't made adjustments for a recession). 
• My guess would be that the less well run art fairs will go under fast - so I'd exercise caution over bookings and deposits - and 
• Check the status of 
• organisations running art fairs and/or 
• any other organisation you place big money orders with and 
• the track record of the people involved 
• (the official information available in relation to Companies is a wonderful thing! You can look at the people involved with specific companies and see how many directorships they have for previously dissolved companies)
4. Many artists started to focus more on making more affordable art for those who were prepared to risk spending on discretionary non-essential items
5. Artists with no business plans nor understanding of how their cash flows work typically end up having have to take other jobs (if they don't have one already) - IF they can get one - because they're in the same boat as everybody else looking to get income from employment
6. The climb back to 'business as usual' can be long and slow if it's a deep recession.
7. Artists who got burned learn to make sure that 
• they have enough to keep going when sales are lean - and 
• when to make essential changes to how they do business

and 

If you're a tiny business without an adequate cash reserve then whatever the state of the economy it always pays to have some steady bread and butter income which pays the bills coming in. Brexit has got nothing to do with it.

There are any number of things which can happen which can cause problems - and some people have no inkling just how big some problems can be and you still get by.....somehow....
Speaks the woman who well remembers paying 18% mortgage interest rate at the start of her mortgage! (my comment on the thread about why a lot of the challenges are not dissimilar to other challenges we confront and survive)

What will it be like after Brexit?

Here are some more thoughts and reflections about what makes a difference when the going gets tough.

RECOMMENDED: There is no F in Art

Imagine you came across a book which says all the things about contemporary art that you think - but only occasionally say 'out loud'.

Imagine a book about 'art' which really makes you think about what's art and what's not.

Who says it's art and should we believe them?

You'd want to read it - or at the very least look at the juxtaposition of pictures and quotations and statements of facts about the current art market.

It's not often I come across small books which make you think about art - and the art world. This is one of them

I was sent a copy of There is No F in Art by its author Eli Castelli and found it both provoking and and enjoyable.

The book is a bit like a rather clever picture book which highlights the juxtaposition of words - often quotations - with images images of artwork and some clever graphics.

In essence it really highlights how much the importance and value of art very often lies 

• NOT in the art itself or the artist 
• but rather in the words written about it - often written by people other than the artist!

These are my comments to the author.

You love words don't you? I keep wondering what your background is - and it has to involve words....

It's thought provoking. I think the bits which hit home clearest for me was how the art is often in the words of those labelling or marketing the art and the value is often attributed by the words rather than created by the artist i.e. who makes the art - the artist or the wordsmith or marketeer.

I kept getting a sense I'd heard some things said before - but that made sense when I got to the bibliography at the back and might possibly be to do with my own reading on similar subjects.

Nevertheless it's a much more accessible way of making the essential points.

I've maintained for a very long time that Damien Hirst's real talent lies in marketing!

It turns out I was right and the author's background involved marketing and the music business in the past.

It takes a marketing person to spot what's product and what's marketing - and where the value lies!

I feel conceptual ‘art' relies on 'art speak’ to justify it as a genre, as most of it fails to speak for itself - Eli Castelli

About the book - There is no F in Art

RECOMMENDED: This is a small book which identifies what you really need to know about contemporary art and the art market.

I very definitely RECOMMEND this book

• to art students 
• to those wanting to get involved in the contemporary art market - as either an artist or art collector 
• to all those who want to write about art - mainly so they stop sounding like pretentious [expletive (plural) deleted].

The book covers:

• What is Art
• Who says it's art and should we believe them?
• Isn't Charles Saatchi the Artist?
• Is Conceptual Art a Con?
• The Art of Marketing Art to the Art Market?
• Is the Best Art the Most Expensive?
• Tate Modern - Scared Institution or Sunday Playground? 
• The Next ...Ism

Title: There is no F in Art
Author: Eli Castelli (it's a pseudonym. This and the name of the publishers is why I said yes when asked did I want to review it)

Thanks for the swift reply Katherine. You are only the second person to notice the "juxtaposition" of Eli Broad and Leo Castelli

Publisher: Sven Dali Press - note the puns continue!
Pages: 112 pages
Paperback / Product Dimensions: 17.7 x 1.3 x 12.1 cm
Price (new) £7.99
You can find it

• on Amazon UK (associate) 
• on Amazon.com (associate)
• in Foyles and Waterstones and most leading/good sellers of art books.

About the author

My background is Marketing and when Saatchi first put a Shark on display in Boundary Rd, I said to my aspiring artists friends "this feels more like my world than yours!" I was at the Tate Modern in February 2018, looking to impress my visiting niece with some of the finest art and it felt more like a playground (adult sized swings & giant disco ball) than a sacred museum (attached). I was further 'uninspired' when we moved onto the Conceptual art room & more so, when the room guide told me the Curators wrote the wall descriptions.

I contacted Saatchi, Tate Modern curators and read several books by Sarah Thornton, Grayson Perry, Don Thompson, Georgina Adam, Sotheby's Philip Hook and watched endless interviews with Rauschenberg, Koons, Poons, Hirst, Gagosian, Richter, Murakami, Emin, Robert Hughes, Jerry Saltz... I also saw and thoroughly enjoyed the Swedish film, The Square.

When the book was printed The Price Of Everything came out soon after. There's a lot of common ground, purely by coincidence.

Art students are my main customers so far, an MA from St Martins saying "it's a beginners guide to the art market."

My aim was to stimulate some sort of conversation, the way art does and should in my opinion. I also tried to create a mirror effect within the book's layout & design and added art history references for people to discover & question for themselves.

Website: www.SvenDaliPress.com

Instagram: @NoFinART

Facebook: www.facebook.com/NoFinART

Twitter: https://twitter.com/NoFinART1

Velvet Buzzsaw - a gorefest satire of the art world

There aren't many films about the art world - but I watched the latest one at the weekend. Velvet Buzzsaw is an art world satire - or A slasher satire of art criticism - as one described it - which moves from the conspicuous consumption and unintelligible artspeak of art fairs, galleries, dealers and critics into the realms of slapstick horror and gore - and debuted on Netflix this month

I'm just going to take some selective comments from various reviews to give you an idea whether or not to start trying to find it on Netflix!

It's not a film to watch for the actors - although I did think a deadpan John Malkovich in a cameo role hit the nail on the literal (or metaphorical) head.

"This is a slaughterhouse"

I do however recommend you do NOT watch the trailer until you have seen the film

- but if you can't resist, here you are....

Velvet Buzzsaw Reviews

Damien Hirst back from the deep - with an awfully expensive wreck

This is by way of a round-up of all the reviews of the latest Damien Hirst extravaganza with a summary of ratings and comments.

I've tried to sort out who has seen the exhibition as opposed to scanned the press release.

There aren't any images of the exhibition in this blog post because he's licenced all the images to Getty Images (click the link to have a look!) who have a fairly hefty charge for using them.

Synopsis of key points

Exhibition details

Treasures from the Wreck of the Unbelievable
9 April 2017 – 3 December 2017
Solo Exhibition
Venues:

• Palazzo Grassi, Venice, Italy
• Punta della Dogana 

Punta della Dogana, Venice

Key Points

The Exhibition

• Themes of Reality vs Unreality; Fake News; False Facts etc. 
• based on the notion that these are artefacts recovered from the bottom of the sea - from the wreck of an old treasure ship discovered off the coast of East Africa
• uses the methodology of museums to present the exhibits
• a 60ft high headless demon can be found in the courtyard of Palazzo Grassi
• some exhibits are clear spoofs e.g. they include the faces of people such as Pharrell, Kate Moss, Rihanna et al
• the exhibition is on display in two museums in Venice - one is an ex-Palazzo and the other is Venice's old customs building, the Dogana da Mar - which is now an art museum

As always, I've always thought that the theme underpinning much of what Hirst does involves him thumbing his nose at the art establishment.

The Metrics

• the project took 10 years
• comprises a collection of 189 statues 
• created by hundreds of craftspeople employed by Hirst
• cost c.£50 million - according to Hirst

The Art Media

• not everything is bronze or marble - there's also quite a lot is aluminium, polyester and fibreglass 

The Partner

• Hirst's project partner - the man who owns the art galleries - is Francois Pinault
• the fashion billionaire who owns luxury brands (e.g. Gucci, Yves Saint Laurent and Alexander McQueen) and well-known everyday brands (e.g.) Samsonite - and Christies, the Auction House
• the owner of one of the largest collections of contemporary art

Is it for Sale?

• Yes according to the New York Times

“Treasures” cost Mr. Hirst millions of dollars to produce and Mr. Pinault millions to present (exact figures were not disclosed by either man). Collectors who have been offered the works report that prices start around $500,000 apiece rising to upward of $5 million. With Damien Hirst’s market untested on such a grand scale, the question the art world is asking is, will he sink or swim in Venice?

In 2008, Hirst cut out the gallery and went straight to the Sotheby's auction house to sell a complete show Beautiful Inside My Head Forever, - the day before the crash - and made £111m. ($198 million) and created a new record for the sum raised by one artist at auction (unbelievable but true!)

This time around he seems to have created another project but this time a major contemporary art collector who owns the auction house - can collaborate on how it is marketed, presented and presumably sold.

In other words, this is what rich people do for fun....

...and to maintain the value of the art owned by art collectors and previously created by Hirst whose reputation has slipped in previous years.

Think of it as the second coming - or as one wag put it "Elvis returns to Vegas"!

The Reviews

Below are reviews I've read and are worth a read to get a perspective on this art market/museum/exhibition phenomenon.

Five star

• The Guardian | Damien Hirst: Treasures from the Wreck of the Unbelievable review – a titanic return by Jonathan Jones Artist has once again found the underwater grotto in his mind where monsters live, making a fool out of all of us who lost faith

The problem with this one is Jonathan is a fan. He wants to believe in the resurrection of Damien. Read it while tossing salt liberally over your shoulder.

• Evening Standard | Treasures from the Wreck of the Unbelievable, exhibition review: A triumphant return from Damien Hirst  by Mathew Collings Damien Hirst’s triumphant comeback show in Venice is a timely reflection on fakery, belief, truth and absolutes

The show is in fact a fiction about value and meaning, and the role of art as truth.

A blogger who has actually seen it

• Cat Bauer Venice Blog | Unbelievable! Damien Hirst in Venice: Best Seen Through the Eyes of a Child What is most interesting about Treasures from the Wreck of the Unbelievable is that Damien Hirst has hit upon on a creative principle innate to novelists: you can create a fictional story; you can create characters -- you can create an entire world -- and bring that world to life.

This one's interesting because this individual has actually seen it and photographed it - and asked some children what they thought of it!

Trying to remain detached

• The New York Times | Damien Hirst Is Back With an Underwater Fantasy. Will Collectors Care? It’s a giant financial gamble for art’s king of controversy, who is trying for a comeback.

The only review I read which had tested the water re prices and sales (see quote above)

• Artnet News | Damien Hirst’s New Venice Show Is an ‘Unbelievable’ Journey to the Depths of Bling Micky Mouse and ancient goddesses populate the artist's fantastical exhibit.

Worth a read - I think Hettie Judah gets it about right.

• The Financial Times | Damien Hirst in Venice — a fantasy too far? Even by the British artist’s high-glitz standards, his new show is an extravagant affair

Probably the best actual description of the show - with some acute comments.

You begin to realise that the fictional narrative in which we’re engaged — or not — is much like a video game, with pathways endlessly dividing into other story strands.

Not the usual exhibition review

Metro | Freaky, mind-bending photos from Damien Hirst’s ‘Treasures from the Wreck of the Unbelievable’ post-truth exhibition in Venice

This one has some great photos and some snappy comments!

Hirst’s latest exhibition makes you question the fakeness and reality of what you’re seeing, and why we go to museums at all.
Here’s the avant-garde artist’s take on cultcha.
The sculptures are spoofs of the kinds of artifacts people will queue for hours to see, from Medusa’s severed stone head…

Daily Mail | Could his £50million fake shipwreck be the downfall of Damien? LIZ JONES gets a sinking feeling at Hirst's 'sea treasures' spectacular

I rather liked this one. It has a strong sense of "the Emperor's New Clothes" about it

It's all very colourful, glitzy and embellished, and everyone is mwah-mwahing and clapping, but would you actually want to wear it?

and

There is an 18m tall statue in one courtyard, a Buddha made from one enormous piece of jade and a silver room, which is when, for me, it all became a bit 'ground-floor of Harrods'.

Previous posts about Damien Hirst 

• Review: Damien Hirst at Tate Modern
• Jeff Koons and Damien Hirst on BBC4
• Plus my review of his paintings is contained in this post

Damien Hirst's paintings are really awful. I've seen better painting and better artwork in a primary school. It really is not worth spending any time on them.

Art Collecting in the Digital Age

I came across a report about a survey of art collectors - Collecting in the Digital Age - done back in 2014 - which I'd not seen before. It's worth highlighting the key messages.

The survey was done by AXA Art who insure art and collectibles

• The survey was done online. 
• 972 people from around the world were asked questions between January 28 to February 25, 2013
• The questions asked were based on several dozen long, face-to-face interviews with collectors.  The purpose was to check out themes raised in the conversations.

It should be noted that the survey was obviously directed at people with serious wealth.  While a third of respondents stayed silent on the size and value of their art collections, of the rest....

only a minority of respondents own small collections with less than 25 objects (15%) or a value of less than 100,000 US $ (22%). 

There again who wouldn't want to know more art collectors who have serious money for art collecting!

Particularly if you've gone professional and are now pricing your art accordingly.

Art collectors: who collects what, how, why and where?

Who is the art collector?

• the typical collector and Internet user is a man
• 80% have a college or university degree,
• 73% of collecting is done by people aged between 40 and 70
• most collecting is done by people with no children at home
• nearly half are self-employed or entrepreneurs
• only 25% are employees

What do people collect?

People like things which hang on walls.

• 89% collect paintings
• 63% collect works on paper (drawings / prints etc)
• 60% collect sculpture
• 49% collect photography

People collect a lot of other things - read the report!

Preference for the type of art collected varies with age

• everybody likes contemporary art
• young people like new art
• older people like more traditional art 

How do people collect?

The survey report came up with a typology of collectors. The described them as follows

• Young collectors: 8% of the collectors in our sample have "just started collecting recently".
• Active collectors: only 45% of respondents state that they "have been collecting continuously and for a while".
• Sporadic collectors: 18% buy collectables "every now and again in phases, with long intervals in between". 1 in 10 collections is worth more than $1m
• Mature collectors: 16% are already beyond the peak of their collecting activities – they "have been collecting for a while, but not as intensively as before"
• Non-collectors: A noteworthy minority, 11% of respondents, say they "would not regard themselves as collectors".

Interesting when asked about their collecting strategies....

• most (65%) said they did it on "gut instinct"
• 30% collect items of high quality

Why do people collect?

Three common reasons were

• "I love to own beautiful things and to surround myself with them" (80%) · 
• "I enjoy occupying myself with art and developing a comprehensive knowledge of art"(79%) 
• "Collecting is a passion of mine" (72%)

Where do people purchase?

Collectors research before they purchase. 77% want to know about one thing - the artist.

(Anybody thinking they need to do a website / social media review of the information the put out in the morning?)

The think the best place for getting the information they want is art fairs.

• 64% use trade fairs, exhibitions, events, presentations 
• 62% find out via galleries
• 58% read printed media, trade journals, newspapers, books 
• 58% like to have discussions with artists 
• 52% use their personal contacts to find out what they need to know
• 51% use the internet - via online media, websites, internet forums, social networks 

The survey then asked "Where and how do you buy your works of art or collectable items?"

• Most (73%) buy via galleries
• However - and very importantly - 63% buy direct from the artist (now you know why galleries don't release details of who buys your art!)
• 59% buy via auctions

For the rest of the places see the chart on the right - or the report.

Interestingly although 95% of art collectors visit art fairs only 39% purchase there.

Plus art advisers are a LOT less important than they may think they are!

Clearly the art fair is the place to meet galleries, find out who does what, see what interests - and find out about the artists!

There is a divergence of opinion about the importance of the internet

• 95% use the internet for communication and researching art they're interested in.
• However:
• only 34% had bought artwork online
• BUT 42% did not contemplate ever using the internet for purchasing art.

Which means that another 24% might do so in future!

All those thinking that serious art collectors do not use the internet need to do a rethink!

Different types of art collectors

The rest of the report - which I recommend you read then focuses on the different types of art collectors

I'd suggest you read these sections in detail to try and understand the sort of people you are dealing with when it comes to art collectors.

These are

• Type I: art aficionados – collecting out of passion - typically people who like contemporary art; like their collection to express their personality and value the social contacts and friendships they get through collecting art. They often have a plan for how to develop their collection.
• Type II: traditionalists – collecting over generations - they collect because their family has always collected - it's what they do!  They also like to own and surround themselves with beautiful things and preserve them for future generations to enjoy them.  Two thirds collect on the basis of gut instinct.
• Type III: investors – collecting for the portfolio - these are people who read auction results and prices paid for an artist the way others would read stock market changes. They collect for investment and enjoy speculating on whether an artist's work is likely to move up or down in value.  Their purchases give them status and express who they are in society.   They are more likely to buy via auctions or on the internet. They are less likely to visit the artist's studio.

Conclusions

For me, the different types of art collectors will remain stable over time. The motivations are similar irrespective of the sector of the art market we are talking about - although I think the Investors are probably more important at the high/expensive end.

My guess is the internet has become much more important since the survey was done.  As I indicated recently in Art Collectors and Instagram, social media has proved invaluable to many collectors for being able to survey what's on offer and just browse.

The imperative for artists is to:

• make sure you present both themselves and your art in the best possible way - on websites and through any social media that they use. (see Marketing and Communication for Artists)
• make sure that art collectors can find out 
• what they want to know from you
• how to buy or commission art from you. (check with independent third parties whether your website makes that easy or difficult).
• make sure that any art gallery that sells your work knows how to promote art and artists on the Internet!

Art Collectors and Instagram

Art collectors love Instagram.

• In terms of posting - it's a place where they can show off their own art collections - but don't need to write anything much beyond a few relevant hashtags
• In terms of browsing - it offers an excellent opportunity to find art they like and art they want to buy.  

Art Collectors on Instagram

Do you know how art collectors use Instagram?

You might find it surprising that according to an Artsy Survey

Over 50% of collectors have purchased works from artists they discovered on Instagram

This relates to a survey done by Artsy about how art collectors use Instagram. It targeted known art collectors - some with collections of 100+ pieces - who were known users of Instagram.

Results were reported in two articles.

How Collectors Use Instagram to Buy Art RECOMMENDED READ

Key findings from the collectors using Instagram who were surveyed are:

• 73% like Instagram as they believe it makes the art market more transparent. Certain galleries have always limited images and the data that collectors have access to and encouraged mystique - and this is blown apart by Instagram!
• 87% check Instagram more than twice a day 
• 55% open the app 5 or more times a day
• more than half (55%) post on Instagram multiple times a week (I'm left wondering whether these are the same people who actively check and buy using Instagram)
• 30% post about works they're thinking of buying
• 64% said the majority of accounts they follow are art-related
• 61% consistently look at an artist’s hashtag
• 51.5% have purchased work from artists they originally discovered through Instagram
• 31% have bought art they originally saw on Instagram. That's a staggeringly high hit rate!

Charts of Artsy Survey Results

7 Ways to Win Over Collectors on Instagram

This article looks at how artists can seek to engage with collectors.

Key points to note are:

• collectors are more likely to follow the individual account of a gallery owner than the generic account of the gallery
• collectors like to search for an artist by hashtag (the survey speculates that some 94% do this at some point). The hashtag has the advantage of bringing together items from different sources - managed and unmanaged!
• collectors need to know the addresses and hashtags that tell them how to find/reach artist and/or gallery
• collectors like a response to their comments
• collectors like browsing in the evening - between 6pm and 11pm
• collectors unfollow those who post too much - or too much of the same thing (it's just plain boring!)
• collectors love the stuff which goes on behind the scenes - so not just the unfinished product but the story of how it came about.

Note: The articles were written by Elena Soboleva (@elenasoboleva) is a contemporary art Specialist at @Artsy.

Who are the art collectors?

You might like to take a look at two posts that Larry's List published towards the end of last year about their perspective  on the Top 50 Art Collectors on Instagram. I'm guessing it's probably due for an update....

• Top 50 Art Collector Instagrams Part I
• Top 50 Art Collector Instagrams Part I

Note: The choice is as per Claire Bouchara - who used to be content manager for the site.

More about artists and Instagram coming up in the near future.....

(Meanwhile I continue with my staycation with himself / getting ready for an art exhibition!)

The Banker's Guide To The Art Market

The Banker's Guide to Art is a documentary to be broadcast by the BBC later this month. The apparent aim is to take a less "reverential" view of the financial realities of art than ever before.

This is how the BBC describes the upcoming programme

Step inside a world of high art, low cunning and prices beyond your wildest imaginings. The Banker's Guide To The Art Market is a revealing, wry and rare look behind doors that are closed to most of us. Propelled by the newly rich of the financial world, London's art market has soared to historic highs.

The film deconstructs this extraordinary phenomenon and looks back over a century of the market’s twists and turns to try to explain it, talking to outspoken collector Jeffrey Archer - 'I couldn’t afford to buy my own pictures’ - maverick dealer Kenny Schacter - 'when money is introduced it brings out the worst in people' - and gallerist Nicholas Logsdail - 'You'll never go wrong, if you buy from a good gallery'. We don’t think you will look at a painting in quite the same way again…

So who are the people taking part and what have they had to say on this topic before now? Turns out they're more interesting than you might think....

Kenny Schacter - art dealer, curator, commentator

Mr Schacter has generated an article in the Telegraph today Art world is 'hotbed' of corruption, collector claims  (hence this blog post) following his appearance at the Hay Festival last week.

A photo posted by Kenny Schachter (@kennyschachter) on Jun 1, 2016 at 12:46am PDT

Schacter has accounts on but doesn't really do Twitter or Facebook - but does use Instagram (see above) so to find out what he thinks you have to follow his articles on Artnet News.

Here's a selection of his articles:

• Vice in the Art World: Kenny Schachter's Adventures at the London Auctions and FIAC
• Kenny Schachter On What's Really Going on at the Top End of the Art Market
• Kenny Schachter Gives the Dirty Details Behind the Big New York Auctions

So he basically seems to be saying:

• the level of corruption in the art world is directly associated to the level of sums involved
• dealers plant false bidders at auctions to ramp up prices for their clients
• prices announced in public for an artwork boost the reputation of artists - despite the fact the sale might take place privately for a much lower figure
• museums and galleries who know which artists are going to be in future exhibitions can capitalise on that knowledge - since shows will usually enhance the value of such artists

"Any time a lot of money crops up, hideous behaviour follows too"

• art sales are used for money laundering - people buying are not interested in the artwork - they just want to shift ill gotten gains
• as a result banks now look very carefully at deposits and withdrawals related to artwork

I assume the latter is the underlying topic for the BBC documentary given its title.

Jeffrey Archer - art collector

"Dr Syntax at auction" by Thomas Rowlandson - owned and sold by Jeffrey Archer in 2011 
at the Christie's auction: "The Jeffrey Archer Sale: Decades of Collecting"

Jeffrey Archer is of course a well known ex MP, who has a history of scandal and making money. Plus he resided at Her Majesty's pleasure for a while and has a stunning penthouse in between MI6 and the Houses of Parliament which contains his rather good art collection. He's been collecting art for over 40 years.

• He even has part of his website devoted to his art collection!
• Back in June 2011 he raised  £5,111,725 at an auction at Christie's called "The Jeffrey Archer Sale: Decades of Collecting" (click the link to see what he owned and sold). I have to say the catalogue notes make for entertaining reading! (you can see these if you click a picture and then read the notes.
• Here's a copy of the proceeds of auction.
• This is a Telegraph article about Jeffrey Archer on Jeffrey Archer on the world’s best private art galleries

Nicholas Logsdail - art gallerist

Nicholas Logsdail owns the Lisson Gallery (London, Milan, New York).

Lisson Gallery as per their website

Founded in 1967, the Gallery's list stable of artists represented include Ai Weiwei, Sol LeWitt , Richard Long, and Anish Kapoor. He's reputed to

• have been introduced to art by his uncle Roald Dahl
• be the dealer who converted Saatchi to modern art (see Art Sales: dealer who opened Saatchi's eyes)
• one of the movers and makers in the art world (see Movers and makers: the most powerful people in the art world)

Looks to me as if it will be a very interesting programme!

Is there a guide for pricing art for competitions?

I get asked questions about pricing art from time to time. Today I got one about pricing for art competitions.

I've anonymised the question with respect to (1) the person who asked the question and (2) the competition as neither are relevant to the answers.

I am entering some works this year in the [prestigious] competition. I have got the works photographed well (I think) and they fit the bill for being me and maybe a bit different. The three I'm entering form part of a series (there are 2 more but they got rejected by me). My problem is with pricing. I have entered juried competitions in the past and think my pricing has sat well in the range ignoring the unbelievably cheap. However, this is a big one. I couldn't make it to see the exhibition last year so I have no information to go on. I have also not worked at this large a scale for open exhibitions. I think the price I would normally put on them would be too low (I am "up north") and I don't want to look foolish. Are there any guides to help with ballpark figures? How much would you think for a full imperial watercolour?

Thank you btw for such a fantastic website. Long may it continue!

You'll find my take on the answer to this question below.

I invite readers of this blog to add a comment at the end about 

• either their own practices 
• or their perspectives on what is the right approach for pricing for art competitions.

Is there a guide for pricing for competitions?

No - there is no guide for pricing art for art competitions.

In terms of working out what to do about pricing below you can find my personal observations on:

1. a principled approach to pricing art
2. some practical suggestions for working out prices 
3. how to price for an art competition

Images are from various competitions - plus a poll about how much artists know about pricing art!

Sunday Times Watercolour Competition 2015

1.  A principled approach to pricing art

There is one over-riding principle behind pricing art - Be Consistent.

In general, your art should cost the same wherever it is shown whether that is on your website, in a local gallery or in an open competition.  Here's a couple of reasons why:

• Buyers need to have confidence in the value of your work. That means they need to know that 
• the price of the art won't change depending on where you sell it and 
• they are not paying a premium for your work because you happen to be selling it in a prestigious competition.
• Being consistent is also a very important consideration when it comes to galleries. A gallery that might become interested in your work and consider adding you to their roster of gallery artists will very soon have second thoughts if it finds your work is priced differently depending on where you sell it.

If you do price your art differently, you need to make sure that there are other very obvious and evident characteristics which justify such differentiation in pricing. These will probably relate to, for example:

• nature of the art e.g. original rather than reproductions
• size e.g. large rather than small i.e. why dimensions are an important feature of any title credit line
• media used e.g.it's well known that some media (e.g. oil) will command higher prices than others e.g. watercolour for the same quality/size/etc of artwork
• presentation e.g. framed rather than unframed

So in relation to pricing for art competitions my advice would be

• Price to be consistent with SIMILAR examples of your own work shown in different places over time. 
• Do NOT price for a competition per se. Create work which is high quality and worthy of the competition and then price relative to the rest of your work.

One of the walls at the Royal Academy Summer Exhibition 2015

2.  Practical suggestions for working out prices

There is no "quick fix" for working out prices.

Audiences for Art - and how to engage them

Some of you may recall Grayson Perry's Reith lectures where he referenced audiences for the Arts. The one that stuck in my mind was "Fun, Fashion and Friends".

I've now discovered the document from which this came.  It's a report called "Arts audiences: insight". You can download the report for free:

• Arts audiences: insight 2011 [PDF 1.6 MB]
• Arts audiences: insight 2011 [Word 165.5 KB]

According to the Arts Council, it provides

an arts-based segmentation of English adults

Each of the market segments are analysed according to their behavioural habits and interest in the arts.

The market segments are listed below. The links in the titles are to the pages online where you can read more about them