PORTUGAL Law and Practice Contributed by: João Valadas Coriel, Sofia Quental, António Vieira and Inês Grácio, Valadas Coriel & Associados
or negligence, liability may be mitigated or excluded, subject to the specific circumstances of the case. 6.4 Pre-Sale Checks for Auction Houses and Galleries Under Portuguese law, auction houses and galleries must conduct strict checks on authenticity, prove - nance, legal ownership, and compliance with cultural heritage laws and AML regulations, before selling artistic goods. This includes, where relevant, compli - ance with cultural heritage rules, export restrictions, AML obligations and international sanctions regimes. Pre-sale due diligence may also involve verifying the identity and beneficial ownership of sellers and buy - ers, assessing exposure to high-risk or sanctioned jurisdictions, ensuring that no prohibited materials (such as ivory or protected species) are involved and, in the case of digital artworks or NFTs, verifying the scope of underlying intellectual property rights rather than relying solely on blockchain records. Failure to carry out adequate checks may result in seizures, fines, contract disputes and, in certain cir - cumstances, administrative or criminal liability. 6.5 Role and Responsibilities of an Art Adviser Although not explicitly regulated as a distinct profes - sion, art advisers are subject to general contract law, consumer protection rules and professional liability standards under Portuguese law, including duties of care, loyalty and transparency arising from their advi - sory mandate. Their role is to ensure that clients receive accurate information and that transactions comply with legal and regulatory standards, including export restric - tions, sanctions regimes and other sector-specific constraints, encompassing the following responsi - bilities: • conducting due diligence on artworks and related rights, including provenance, authenticity, legal title and compliance with applicable regulatory restric - tions – namely on trade, heritage and cross-border constraints;
• avoiding misrepresentation and conflicts of inter - est, including undisclosed commissions, rebates from galleries or auction houses, non-transparent mark-ups and potential dual representation – and ensuring transparency, particularly where advising non-professional clients; and • complying with AML regulations for high-value sales, where acting as intermediaries within the scope of applicable legislation. 6.6 Anti-Money Laundering Regulations and the Art Market Art market participants in Portugal are subject to AML obligations under applicable EU and national legis - lation, including customer due diligence, beneficial ownership identification, provenance checks and suspicious transaction reporting. While these regu - lations increase transparency and reduce financial crime risks, they also pose significant compliance challenges, particularly for smaller galleries and inde - pendent dealers, for the following reasons: • the verification of provenance can be complex and demanding, including cross-checking cross-border sources and international databases; • the implementation of AML measures can be costly, particularly in relation to internal compliance procedures, software implementation and staff training, and may involve uncertainty when assess - ing beneficial ownership structures or complex transaction flows; • record-keeping and ongoing monitoring obligations may impose a significant administrative burden; and • tension may arise between traditional expectations of confidentiality in the art market and mandatory reporting obligations. Additional risk factors include transactions involving high-risk or sanctioned jurisdictions, designated per - sons or entities, complex ownership structures, frag - mented payments designed to avoid reporting thresh - olds, and the increasing use of crypto-assets and blockchain-based transactions. Art market operators must also consider applicable international sanctions regimes, including potential asset-freezing measures and related reporting obligations.
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