Art law: Restrictions on the export of cultural property and artwork November 2017

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1 Art law: Restrictions on the export of cultural property and artwork November 2017 A report by the IBA Art, Cultural Institutions and Heritage Law Committee

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3 Acknowledgement I would like to extend my sincere thanks to the authors for helping me to realise this amazing project. I owe a debt of gratitude to all of you who managed to devise contributions of highest scientific quality on relatively short notice. As time has gradually become the most valuable resource in our fastpaced world, especially for a group of individuals as busy and successful as you are, I highly treasure your contributions. Holding the final result in my hands for the first time, I feel the hard work has paid off. We have created a thorough compilation of information that provided the legislators cooperation should stand the test of time, and serve not only as valuable resource for the practitioner but also as a starting point for scholarly debate on this issue. Without you, this project would not have been possible. Gratefully yours, Peter M Polak Report editor and Chair of the IBA Art, Cultural Institutions and Heritage Law Committee NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 1

4 Table of contents Argentina 5 Australia 9 Austria 18 Belgium 23 Canada 31 Germany 40 Ireland 46 Italy 56 Malta 67 Mexico 76 The Netherlands 83 Russia 90 Spain 100 Sweden 107 Switzerland 120 United States Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017

5 List of Acronyms 1997 Act National Cultural Institutions Act, 1997 (Ireland) ACCC AMLA B2B BR BSA CCPERB CDIU CHC CISG CITES CPAC CPEIA CPIA CPTA DMSG EEA FAMO FL FR FTZs GER HEA HER INAH INBA Australian Competition and Consumer Commission (Australia) Anti-Money Laundering Act (Switzerland) Business-to-business (Sweden) Potential decree ( ordonnance ) of the Brussels Region (Belgium) Bank Secrecy Act or Currency and Foreign Transactions Reporting Act of 1970 (USA) Canadian Cultural Property Export Review Board (Canada) Centrala Dienst In-en Uitvoer (The Netherlands) Cultural Heritage Code (Italy) United Nations Convention on Contracts for the International Sale of Goods Convention on International Trade in Endangered Species of Wild Fauna and Flora (The Netherlands, Switzerland) Cultural Property Advisory Committee (US) Cultural Property Export and Import Act (Canada) Convention on Cultural Property Implementation Act (US) Cultural Property Transfer Act (Switzerland) Denkmalschutzgesetz (Austria) European Economic Area Federal Antiquities and Monument s Office (Austria) The Decree of the Flemish Community of 24 January 2003 (Belgium) The Decree of the French Community of 11 July 2002 (Belgium) Foreign Trade Zones (US) Decree of the German-Speaking Community (Belgium) Historic Environment Act (Sweden) Historic Environment Regulation (Sweden) National Institute of Anthropology and History (Mexico) National Institute of Fine Arts (Mexico) INTERPOL The International Criminal Police Organisation NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 3

6 KGRG KGSG MCLA MiBACT Kulturgüeterrüeckgabegesetz (Austria) Kulturgüeterschutzgesetz (Germany) Money Laundering Control Act of 1986 (US) Ministry of Cultural Property (Italy) PMCH Act Protection of Movable Cultural Heritage Act 1986 (Australia) PPSA PPSR SUE TAR UCC Personal Property Securities Act 2009 (Australia) Personal Securities Register (Australia) Sistema informativo degli Uffici Esportazione (Italy) Tribunale Amministrativo Regionale (Italy) Uniform Commercial Code (US) UNESCO United Nations Educational, Scientific and Cultural Organization UNIDROIT The International Institute for the Unification of Private Law USSR Wwft The Union of Soviet Socialist Republics (Russia) Anti-Money Laundering and Anti-Terrorist Financing Act (The Netherlands) 4 Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017

7 Argentina Juan Javier Negri Negri & Pueyrredon Abogados, Buenos Aires A. Protection of cultural property 1. What are the key characteristics of your country s regulations on cultural heritage and national patrimony? Argentina is a federal country, so there are three levels of legislation: federal, provincial and municipal. Federal law is strictly enforced, but controls are more relaxed at provincial and municipal levels, especially regarding sites and buildings protection. 2. Under your national law, which criteria must be met in order to classify goods as cultural property? Under the Cultural Heritage Act (Law enacted in 1999), cultural goods are those objects, living things or sites that constitute the expression or evidence of human creation and the evolution of nature and have exceptional archaeological, historical, artistic, scientific or technical value. There is a further definition of historical and artistic cultural property comprising: all human or joint natural and human works of irreplaceable nature, whose peculiarity, unity, rarity and/or antiquity confers upon them an exceptional national or universal value from a historical, ethnological or anthropological point of view, as well as architectonical works, sculptures, paintings and those having archaeological nature. In addition to cultural property, under the statute creating the National Commission on Historical Monuments, Sites and Assets (Law 27103, enacted in 2014, amending a prior statute originally enacted in 1940), certain goods may be declared of national interest if they have historical or artistic value. 3. What are the legal consequences arising from classifying a good as cultural property? Does the classification of a private asset as cultural property affect the right of ownership? If a particular good is classified as cultural property under the 1999 statute, it will only be subject to classification, with no further consequences. If an asset is declared to be a protected asset under the 2017 statute, any transaction affecting it or its export will require the prior intervention and authorisation of the Ministry of Culture. In the case the intervention imposes limitations on property rights, the owner must be indemnified. 4. Which authorities in your country define cultural property and who advises these authorities? The authority defining which assets are to be considered of national interest is the Ministry of Culture through the National Commission on Historical Monuments, Sites and Assets. NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 5

8 5. Did your country ratify the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property, and, regarding the illegal export of cultural objects and artwork: what are the main characteristics of the national implementation? Yes. Argentina ratified the convention with no reservations or changes pursuant to Law (1972). 6. Did your country ratify the 1995 UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects, and, regarding the illegal export of cultural objects and artwork: what are the main characteristics of the national implementation? Yes. Argentina ratified the convention with no reservations or changes pursuant to Law (2000). 7. Did your country ratify any other international conventions or bilateral agreements relating to the export of cultural objects? Yes. Argentina has ratified in 2002 the 1976 El Salvador Convention on the Protection of the Archaeological, Historic and Artistic Heritage (the El Salvador Convention ). B. Restrictions on the export of cultural property and artwork 1. What are your country s export restrictions regarding cultural property and artwork? 1.1 Under which conditions is export permission granted? Export permission is granted to works by living or deceased artists (if, in the latter case, no more than 50 years have run after the death), except if the work has been declared to be part of the national cultural heritage of Argentina. 1.2 Which authority grants such export permission and who advises this authority? The National Board of Cultural Assets and Sites. 1.3 What does the proceeding look like, who are the parties to the proceeding and what is the duration of the proceeding? Proceedings are swift and normally permission is granted in 24 hours. 1.4 Are there any monetary thresholds (de minimis)? No. 1.5 Does the circumstance of the artist still being alive or the time of creation of the artwork matter? Yes. The work by living artists, in practice, finds no restrictions. Works of artists dead for over 50 years find more difficulties. 6 Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017

9 2. Is the State obliged to buy out the artwork for which an export permission was denied? No. The owner must file a lawsuit with such purpose. 3. Are there any exceptions to these regulations (eg, temporary export for exhibitions, conservation or private reasons of the owner)? Yes, on a case-by-case basis. C. Consequences in case of violation of export restrictions; restitution and repatriation of illegally exported cultural property 1. What are the legal consequences in case of breach of export restrictions? The exporter may face criminal charges. 2. Give a description of the regulations and practices in your country relating to the restitution and repatriation of illegally exported cultural property There are many precedents in which the State has seized and later returned to the country of origin artworks illegally entered into Argentina. There are no precedents in which Argentina has claimed back artworks illegally exported from Argentina. 3. Under which conditions does your country assist foreign countries seeking repatriation of cultural property/artwork? Under the El Salvador Convention (see answer to question A.7) all countries party to the convention must take all legal steps to ensure that no export or import restrictions of artworks are violated. In case legal actions are required, the country whose assistance has been requested must file the legal action itself. 4. Does a buyer enjoy protection against restitution claims for violation of foreign export restrictions? Normally not; however, the buyer could allege and evidence good faith. 5. Which regulations exist for the protection of the purchaser against title claims? None. To the extent artworks constitute mobile property, possession equals title, unless strong evidence can be provided that the buyer knew or had reason to know that the artwork was illegally transferred. 6. Does a lender from abroad enjoy protection against seizure of items on loan to local exhibitors if the good fails to have proper export licence? If the export licence is defective, the foreign lender may face severe difficulties to obtain protection. 7. What regulations exist concerning the import of cultural property that may have been exported illegally from its country of origin or that is the subject of claims? Argentine statutes providing tax exemptions to the import or export of artworks specifically indicate that the benefits are granted to their bona fide holders. Thus, it can be reasonably held that good faith evidenced locally would prevail over a foreign claim of an illegal export. NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 7

10 D. Due diligence obligations 1. What general due diligence is required from the seller/buyer of artwork if the artwork is intended to be exported? The seller or buyer should require from the counterparty appropriate evidence that the artwork was declared for Argentine tax purposes plus a detailed invoice or receipt from the seller. 2. Are there any anti-money laundering regulations applicable in the art trade and at art auctions? Yes. Art dealers and auctioneers must provide information to the relevant authorities from time to time. 8 Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017

11 Australia Janet Whiting Gilbert & Tobin, Melbourne A. Protection of cultural property 1. What are the key characteristics of your country s regulations on cultural heritage and national patrimony? Australia protects its cultural heritage through the Protection of Movable Cultural Heritage Act 1986 (Cth) (the PMCH Act). The PMCH Act controls the import and export of significant pieces of Australia s moveable cultural heritage. The PMCH Act covers very limited works in specific categories (full details in question A.2 below). Legitimate trade in other cultural property is not affected by the PMCH Act, which also enables the export of cultural property whose loss would not prove detrimental to Australian cultural heritage. Indigenous artworks and artefacts of cultural significance to Australia s Aboriginal and Torres Strait Islander peoples are further protected by the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth). This Act enables the Australian government to respond to requests from indigenous or Torres Strait Islander persons to protect areas and objects of cultural importance in the form of a declaration. 2. Under your national law, which criteria must be met in order to classify goods as cultural property? Australian protected objects are items of movable cultural heritage that fall within the categories specified in the National Cultural Heritage Control List (the Control List ) which is set out in Schedule 1 to the Protection of Movable Cultural Heritage Regulations 1987 (Cth). The Control List is divided into nine sections, each of which covers a particular type of cultural object and describes the criteria that an object must meet in order to be classified as an Australian protected object. The following types of objects may be considered Australian protected objects: objects of Australian Aboriginal and Torres Strait Islander heritage; archaeological objects; natural science objects; objects of applied science or technology; objects of fine or decorative art; objects of documentary heritage; numismatic objects; philatelic objects; and objects of historical significance. NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 9

12 3. What are the legal consequences arising from classifying a good as cultural property? Does the classification of a private asset as cultural property affect the right of ownership? Once a good has been classified as an Australian protected object, the PMCH Act places legal restrictions on the export of that object. Class A objects cannot be exported and Class B objects may only be exported under permit. A person seeking to export a Class B object must apply to the Minister for a permit, and the object cannot be exported otherwise than in accordance with the permit. If a private asset is classified as an Australian protected object, the purchaser s rights are affected in that they cannot export the item without a permit. 4. Which authorities in your country define cultural property and who advises these authorities? The Minister for the Department of Communications and the Arts (the Minister ) determines which objects ought to be considered Australian protected objects. The National Cultural Heritage Committee (the Committee ) furnishes advice to the Minister in relation to objects that should be included in, or removed from, the Control List. Further, the Committee maintains a register of expert examiners, to whom they refer matters for advice. 5. Did your country ratify the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property, and what are the main features of the national implementation? Australia is a party to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. The PMCH Act is the national implementing legislation of Australia s obligations under this Convention. The unique feature of this implementing legislation is its focus on indigenous artworks and cultural artefacts. 6. Did your country ratify the 1995 UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects, and what are the main features of the national implementation? Australia is not a party to the 1995 UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects. 7. Did your country ratify any other international conventions or bilateral agreements relating to the export of cultural objects? Australia has been a party to the United Nations 2005 Convention on the Protection and Promotion of the Diversity of Cultural Expressions since 18 September This Convention is an international treaty that outlines protective measures for cultural goods, services and activities and the importance of access to a rich diversity of cultural expressions from around the world. 10 Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017

13 B. Restrictions on the export of cultural property and artwork 1. What are your country s export restrictions regarding cultural property and artwork? Australia s export restrictions divide Australian protected objects into two export classes: Class A outlines objects that cannot be exported and includes objects such as: Victoria Cross medals awarded to Australian service personnel; any piece of the suit of metal armour worn by Ned Kelly at the siege of Glenrowan; and Aboriginal and Torres Strait Islander sacred and secret ritual objects, rock art and dendroglyphs (carved trees). Class B outlines objects that can be exported if granted a permit under the PMCH Act. This includes objects such as: fossils and meteorites; heritage machinery; tools and weapons; archaeological objects relating to Australian history; objects of documentary heritage of significance to Australia; certain numismatic and philatelic objects; and fine and decorative art. To obtain a Class B permit, a request is made to the Minister. Collecting institutions can apply for a general permit to temporarily export any Class B object from their collections. The Committee considers each export permit application before it is read by the Minister. 1.1 Under which conditions is export permission granted? A person may apply to the Minister for a permit to export a Class B object. The Minister may grant or refuse a permit, subject to any such conditions as the Minister sees fit. Once granted, holders of permits may apply to the Minister to have conditions of the permit varied or revoked. 1.2 Which authority grants such export permission and who advises this authority? The Minister grants export permission of Class B objects. The Minister is advised by the Committee and their register of expert examiners. 1.3 What does the proceeding look like, who are the parties to the proceeding and what is the duration of the proceeding? To obtain a permit to export a protected object, an application is made to the Minister. The Minister shall refer the application to the Committee, who in turn refer the NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 11

14 application to one or more expert examiners. The expert examiners then submit a written report on the application to the Committee, who forward the report to the Minister, together with any recommendations made by the Committee. The Minister may refuse to grant a permit where they deem it as an object of such importance to Australia that its loss would significantly diminish the cultural heritage of Australia. If the Minister refuses to grant a Class B permit, the Minister must give the applicant notice in writing of the refusal, setting out reasons for the refusal, within 14 days of the decision being made. If an individual is dissatisfied by the decision of the Minister, application may be made to the Administrative Appeals Tribunal for a review of the decision. 1.4 Are there any monetary thresholds (de minimis)? There are no monetary thresholds for the exportation of Australian protected objects; every Class B object may only be exported under permit. 1.5 Does the circumstance of the artist still being alive or the time of creation of the artwork matter? The PMCH Act does not detail the living status of an artist or the time of creation of artwork as circumstances the Minister, Committee and expert examiners must consider when making a determination on a Class B permit. However, they are required to consider whether the object is of significant importance to Australia s cultural heritage for ethnological, archaeological, historical, literary, artistic, scientific or technological reasons. These reasons may necessarily include whether the artist behind the artwork is alive, or the creation date of the art. 2. Is the State obliged to buy out the artwork for which an export permission was denied? The PMCH Act does not oblige the State to buy out artwork for which an export permission was denied. An individual may challenge the decision of the Minister in the Administrative Appeals Tribunal. However, if that fails, they are still bound not to export the object. In these circumstances, an alternative course of action would be to try and sell the object to an Australian institution or Australian collector. 3. Are there any exceptions to these regulations (eg, temporary export for exhibitions, conservation or private reasons of the owner)? A principal collecting institution defined in the PMCH Act as a public art gallery, public museum, public library or public archives established under a law of the Commonwealth, a State or a territory, may apply to the Minister for a Class B permit. However, there is no request obliging the Minister to grant the permit in favour of a principal collecting institution. Where a person intends to export an Australian object for temporary purposes, the person may apply to the Minister for a certificate authorising the exportation of that object. The Minister 12 Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017

15 has discretion to grant or refuse the certificate. However, upon refusal, the Minister shall serve the applicant with reasons for the refusal. 4. Does your country dispose of any free ports and, if so, how are they arranged? Australia does not have any designated free ports or free economic zones. C. Consequences in case of violation of export restrictions; restitution and repatriation of illegally exported cultural property 1. What are the legal consequences in case of breach of export restrictions? Under the PMCH Act, a breach of export restrictions is an indictable offence. An individual may be fined up to AUS$9,000 or alternatively sentenced to a period of imprisonment not exceeding two years. A corporation may be fined up to AUS$36, Give a description of the regulations and practices in your country relating to the restitution and repatriation of illegally exported cultural property Over the past 20 years, museums across Australia have become increasingly active in repatriation, especially with regard to indigenous art. There is an official Australian Government indigenous repatriation policy, which seeks to set up procedures for repatriation of exported indigenous art. A notable example was in 2011 when the Natural History Museum in London returned the remains of 138 Torres Strait Islanders to their place of origin. 3. Under which conditions does your country assist foreign countries seeking repatriation of cultural property/artwork? Under the PMCH Act, foreign governments have the right to make a request to the Australian government to find, seize and return looted property that is a protected object of that nation. However, this only applies to goods that arrived in Australia after 1 July 1987 (when the PMCH Act commenced). When the request is made by the foreign government, Australian authorities do not have regard to current ownership of the cultural object. Australia also has standing agreements with certain countries to seize certain prohibited objects illegally imported into Australia. For example, it is illegal to import Chinese cultural relics created prior to AD 1911 or Egyptian antiquities belonging to the Egyptian government. 4. Does a buyer enjoy protection against restitution claims for violation of foreign export restrictions? For repatriation of cultural objects, the PMCH Act only applies when nations (not individuals) request the object from the Australian government. As Australia is not a signatory to the 1995 UNIDROIT Convention, buyer protection from individuals is dependent on Australian property law. The bona fide purchaser rule (as discussed below) will apply. NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 13

16 5. Which regulations exist for the protection of the buyer against title claims, in general? Before 2012, the general rule was that a buyer who purchased personal property in good faith and paid a price equivalent to the reasonable value of the property was known as a bona fide purchaser for value without notice and had good title to that piece of property regardless of the prior interests of other persons. Purchasing in good faith simply meant that the buyer believed that the seller had an unencumbered title to that piece of property and did not have any notice that the seller s title was restricted in any way. In January 2012, the Personal Property Securities Act 2009 (Cth) (PPSA) created the Personal Property Securities Register (PPSR), a single national register of security interests over personal property where a party can register their security interest in a piece of personal property, including artwork. Security interest is broadly defined and includes anything that, in substance, secures payment or performance of obligations (that is, traditional securities such as charges or mortgage and other security arrangements such as retention of title claims). It also covers short term leases and bailment. The PPSA alters the general rule of title by giving priority to certain security interests that are registered on the PPSR. The bona fide purchaser will not lose title in the following circumstances: if the artwork was purchased in the ordinary course of the business of the seller (that is, from a gallery or auction room); if the artwork was purchased in any circumstances for less than AUS$5k and the artwork will be used predominantly for personal, domestic or household purposes. In both of these circumstances the bona fide purchaser takes the goods free of any security interest. If the above two exceptions do not apply, the buyer s entitlement to the artwork will be overridden by any third party security interest registered on the PPSR. 6. Are there any regulations, such as anti-seizure guarantees, in favour of lenders from abroad regarding the return of their items on loan to local exhibitors? Currently, there is no over-arching regime of anti-seizure guarantees ensuring the safe return of objects on loan to local institutions. However, the Australian government, state museums and galleries have provided guarantees or letters of comfort to international lending owners exhibiting in Australia where items of great value or significance have been provided (for example, the Musee d Orsay loaned Portrait of the Artist s Mother, also known as Whistler s Mother, to the National Gallery of Victoria in 2016). Usually, the lending owners and local institutions enter into contractual arrangements requiring the local institution to take all necessary measures to protect objects from being the subject of claims by third parties. The Protection of Cultural Objects on Loan Act 2013 (Cth) encourages international loans for temporary public exhibition in Australia by limiting the circumstances in which lenders, exhibiting institutions, exhibition facilitators and people working for them can lose 14 Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017

17 ownership, physical possession, custody or control of objects while they are in Australia. This protection is often referred to as immunity from seizure and suit. Under this Act, most types of legal action, including seizure and suit (legal proceedings brought to a court of law) and the enforcement of judgments and orders are prevented. Eligible Australian borrowing institutions can apply for approval under the Protection of Cultural Objects on Loan Scheme (the Scheme ). Approval of Australian borrowing institutions lasts for up to five years. Once an institution is approved, objects that are imported by the institution for temporary public exhibition in Australia from a lender who is not ordinarily resident in Australia will be automatically protected. Approved institutions must ensure that the conditions of the Scheme, including due diligence, consultation and publication standards, are satisfied for these loans. These requirements are outlined in the Protection of Cultural Objects on Loan Regulation 2014 (Cth). Protection for an object lasts for up to two years from the date objects are imported into Australia. The Scheme protects cultural material of any type, with minimal exceptions. One of the exclusions is Australian cultural heritage material identified as Australian Protected Objects Class A under the PMCH Act. As noted at question B.1 above, Class A objects cannot be exported. 7. What regulations exist concerning the import of cultural property that may have been exported illegally from its country of origin or that is the subject of claims? Where a foreign government makes a request to return looted property, Australian authorities do not have regard to the current ownership of the cultural object. Furthermore, Australia s primary institutions employ due diligence on imported artwork to ensure proper import procedures are followed. Museums Australia is an association that advocates for Australian museums and galleries. Generally, Museums Australia s code of ethics is adopted by public institutions in the gallery, museum and library industries. In its code of ethics it advocates that a museum must not acquire, whether by purchase, gift, bequest or exchange, any object unless it can be proven that the object in question was legally acquired and/or imported into Australia. Where the validity of the object s ownership is in question, the museum can act as a custodian. Loans, gifts and bequests are only to be accepted where they conform to relevant acquisition and exhibition policies. Improperly valued or attributed loans, gifts or bequests are not to be accepted into collections, particularly if tax benefits are involved. Museums Australia has also published policies on the management of indigenous art. These include that consideration is to be given to the views of indigenous communities relating to display, collection, care and return of cultural materials. The policy provides for the repatriation of highly culturally important material from museums to indigenous communities. This material often comprises ancestral remains and secret or sacred material and will have been put into a collection without the permission or knowledge of the owners or custodians, resulting in significant cultural loss to indigenous Australians. NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 15

18 D. Due diligence obligations 1. What general due diligence is required from the seller/buyer of artwork? Buyer: Inspection A buyer should undertake careful examination of the work, ensuring that it matches the description provided by the seller. Sellers conditions of sale often incorporate terms which state that the buyer accepts that the work matches the description. A buyer will not ordinarily be entitled to a remedy if he or she had an opportunity to examine the artwork before purchase and did not find noticeable defects. However, a buyer may be entitled to a remedy for defects that could not be detected on close inspection, subject to the provisions of the relevant state or territory Sale of Goods Act or the Australian Consumer Law at a federal level. These laws, generally speaking, imply conditions and warranties into the contract relating to title, authenticity, provenance, merchantable quality, fitness for purpose and compliance with description. The competition regulator in Australia, the Australian Competition and Consumer Commission (ACCC) has published a fact sheet on consumer rights for buyers of indigenous artworks. It contains a practical checklist of questions that should be asked of sellers. In particular, it encourages consumers to probe sellers on the names of artists, language groups, homelands, titles of works, provenance, the details of any story an artwork tells and other cultural information. The buyer needs to be satisfied as to the provenance of the work. Estimated selling range A buyer should not rely on an estimated selling range provided by a seller. It is advisable that a buyer forms an independent view as to an estimated selling range as it may not be possible to subsequently make a claim for false or misleading representations where the estimated selling range provided by a seller is inaccurate. Terms and conditions A buyer should carefully consider all the terms and conditions of sale. For example, auction houses typical conditions of sale include provisions specifying that the legal risk transfers to the buyer from the fall of the auctioneer s hammer, whether or not payment has been made at that point in time. Seller: The seller must undertake thorough research on provenance to ensure that the work is not a fake, forgery or counterfeit purporting to be an original (particularly in the case of works by significant artists). This is essential to avoid the risk of engaging in misleading or deceptive conduct. Galleries and dealers have been found to have engaged in misleading or deceptive conduct for making false representations. 16 Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017

19 Economic copyright rights and an artist s moral rights conferred by way of copyright ownership in a work will be infringed by a person who, in Australia, sells an article if they knew or ought reasonably to have known that the article was an infringing article (or if imported, if it had been made in Australia would be an infringing article), or imports such item for sale. Thus, the seller may wish to satisfy themselves that the work: does not infringe copyright by reproducing a substantial part of another original work; does not infringe the relevant author s moral rights (for instance, by mutilation of the canvas); and that the physical artwork is not stolen property, particularly where there is no contract of sale in writing. For significant transactions, the seller may wish to undertake background research on the buyer to ensure that the buyer will be able to pay the purchase price in full. Further protection can be achieved through a contract of sale which included clauses on warranties and remedies for breach of contract. 2. Are there any special due diligence standards applicable to the trade (eg, dealers, auction houses), that also extend to collectors? The type of due diligence applicable to the trades, set out above, also extend to collectors. 3. Are there any anti-money laundering regulations applicable to (individual) sellers, dealers, auction houses or agents? Australia does not have a regime or regulatory authority targeting money laundering specifically in artworks. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) and Financial Transaction Reports Act 1988 (Cth) provide the foundation for Australia s general regulatory regime for the detection and deterrence of money laundering. The Proceeds of Crime Act 2002 (Cth) allows the Australian government to confiscate assets derived from crime including in circumstances not requiring a conviction of the relevant parties involved. In addition, Australian launched its first Art Crime Consultative Committee in January The committee is a joint venture between the University of Western Sydney and the New South Wales Police Force aimed at enhancing the investigative and crime prevention capabilities of the police in this industry. This is achieved through increased access to art experts, greater training and an increase in cross jurisdictional liaison in the specialised area of art crime. NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 17

20 Austria Carl Dominik Niedersüß Fiebinger Polak & Partner, Vienna A. Protection of cultural property 1. What are the key characteristics of your country s regulations on cultural heritage and national patrimony? Austria has a stringent regime of protection of cultural property that stipulates strong incisions to the right of ownership and transfer. Transfer restrictions not only apply upon the export from Austria but even upon a transfer of ownership within the country. Objects protected under cultural property law may not be altered or destroyed by its owner. More importantly, the owner is obliged to conserve the object, to a reasonable extent, and at her or his own expense. In terms of restitution, the Austrian regime has been strongly impacted by European harmonisation (most notably Directive 2014/60/EU) and the 1970 UNESCO Convention, allowing for impartial restitution proceeding before a Civil Law Court. 2. Under your national law, which criteria must be met, in order to classify goods as cultural property? Cultural property may include all man-made objects of artistic, historical or other cultural significance. The broad definition of the term object allows for a fairly wide scope, including among others antiques, paintings, drawings, miniatures, statues, reliefs, coins, excavated objects and musical instruments. Cultural property may also be vested in the arrangement of several objects (eg, a collection), effectively rendering them inseparable. Cultural property is to be protected meaning formally placed under protection by an administrative deed in cases where public interest mandates their conservation. This will typically be the case where the total amount of cultural heritage in Austria would be negatively impacted in terms of quantity, variety or distribution. NB: As will be shown below, limitation of the export of an object may apply based on the nature of the object, even without formal protection having been enacted. A declassification from the status of cultural property or revocation of the protection can be applied for in cases where either the public interest to protect the object has ceased to the extent, that a protection is no longer necessary, or in cases where a scientific re-evaluation of the object has led to the conclusion that its protection is no longer befitting. Needless to say, these cases only rarely occur. 18 Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017

21 3. What are the legal consequences arising from classifying a good as cultural property? Does the classification of a private asset as cultural property affect the right of ownership? Obviously, the right of ownership is affected in a multitude of ways. Most importantly, free transfer of ownership (be it within the Austria s federal borders or be it internationally) is limited and subject to the cultural heritage protection authorities consent. For more information on cross-border restrictions, confer Section B below. Further, the classification as cultural heritage imposes a multitude of duties on the owner most importantly the duty to maintain the object at his or her own expense to a reasonable extent as well as the obligation not to alter or destroy it. The abidance by these rules is safeguarded by strict fines and even stricter rules for criminal prosecution. 4. Which authorities in your country define cultural property and who advises these authorities? Two authorities define cultural property. The Federal Antiquities and Monument s Office ( Bundesdenkmalamt ; hereinafter FAMO) is assigned to protect of cultural property in general, meaning all cultural property that is not being supervised by other agencies that is, all categories besides the ones explicitly assigned to the National Library. The National Library ( Nationalbibliothek ) is the competent authority to supervise the protection of books as well as pictures, motion pictures, video and sound recordings created for the purpose of documentation of public information. On appeal, matters assigned to these two authorities will be decided by Federal Administrative Court ( Bundesverwaltungsgericht ). All the above are consulted by an expert advisory board ( Denkmalbeirat ) established at the Federal Ministry of Education, Arts and Culture, a panel consisting of 60 volunteer experts. The board does not have the power to decide but its recommendations are well reputed and will in general be followed. 5. Did your country ratify the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property, and, regarding the illegal export of cultural objects and artwork: what are the main characteristics of the national implementation? In light of the European Union Commission s recommendations, Austria ratified the 1970 UNESCO convention on 1 July Together with Directive 2014/60/EU, it has been implemented within the framework of the Cultural Heritage Restitution Act (Kulturgüterrückgabegesetz, KGRG). This Act provides for the legal framework to initiate restitution proceedings before a civil court. In such proceedings, the government authorities may participate as observers but are not parties. The KGRG allows for the restitution of cultural property that was illegally exported from its country of origin most notably in breach of the UNESCO Convention or in breach of EU law. This may apply either to objects unlawfully removed from their country of origin or for objects NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 19

22 that were initially lawfully removed but whose permission has later ceased to exist. Unlawfulness must be given at the time of import to Austria. Proceedings are held before a civil court. The owner of the object is entitled to compensation if he or she acted diligently upon acquisition of the object. This will in general be the case if he or she had reason to believe the import was lawful (eg, when acquiring from a trustworthy source) and when he or she inquired available resources/databases of stolen object of the concerned category. Possessors acting in bad faith upon acquisition are also obligated to pay the rightful owner compensation of legal costs. 6. Did your country ratify the 1995 UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects, and, regarding the illegal export of cultural objects and artwork: what are the main characteristics of the national implementation? Austria has not ratified the 1995 UNIDROIT Convention. 7. Did your country ratify any other international conventions or bilateral agreements relating to the export of cultural objects? Most notably, Austria is bound by EU Directive 2014/69/EU on the return of cultural objects unlawfully removed from the territory of a Member State, which has been implemented into national law by the KGRG (see question A. 5 above). B. Restrictions on the export of cultural property and artwork 1. What are your country s export restrictions regarding cultural property and artwork? 1.1 Under which conditions is export permission granted? In general, the export of protected cultural property as well the export of cultural property not yet protected, is subject to permission by the authorities. Concerning the former, export regulations are very stringent and export permissions will only be granted in crucial cases, meaning in cases where the value of the export of the object outweighs the public interest that lead to its protection as cultural property in the first place. Burden of proof lies with the proprietor of the object. Concerning the latter, the competent Ministry regularly publishes a decree of de minimis thresholds, below which a permission is not necessary. Should the authorities conclude that an object not formally protected may not be exported, it is obliged by law to initiate protection proceedings concerning the object. Thus, a request for granting an export permission may lead to unpleasant consequences for the owner of a cultural object. Exceptions to this rule are works of contemporary arts, which may be exported without the need for a permission, unless they have been formally declared public heritage. 1.2 Which authority grants such export permission and who advises this authority? See question A Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017

23 1.3 What does the proceeding look like, who are the parties to the proceeding and what is the duration of the proceeding? In the first instance, the petitioner requesting permission is the only party before the responsible office. The advisory board will be called upon in a consulting role. On appeal before the Administrative Court, the responsible office is reduced to being a regular party defending its decision. In general, there is no cost compensation in these proceedings. Duration depends on the workload of the office/court, but lies within EU averages. 1.4 Are there any monetary thresholds (de minimis)? See question B Does the circumstance of the artist still being alive or the time of creation of the artwork matter? Yes, section 16 (4) Denkmalschutzgesetz (DMSG) provides for an exception for the export of the work contemporary artists. Works of contemporary artists and works of artists deceased no longer than 20 years ago do not require an export permission, unless they already are under protection. 2. Is the State obliged to buy out the artwork for which an export permission was denied? No. 3. Are there any exceptions to these regulations (eg, temporary export for exhibitions, conservation or private reasons of the owner)? Temporary export may be permitted in return for a security deposit amounting to two times the market value of the object, so long as the return of the object to Austria is not endangered. C. Consequences in case of violation of export restrictions; restitution and repatriation of illegally exported cultural property 1. What are the legal consequences in case of breach of export restrictions? Besides monetary fines, the Austrian legal framework provides for restoring orders. Where cultural property was exported without permission, the authorities may order the exporter to effect appropriate measures to retrieve the object at its own expense. This may include the order to purchase the object. Objects retrieved this way may be reappropriated to the state. 2. Give a description of the regulations and practices in your country relating to the restitution and repatriation of illegally exported cultural property? See question A.5 above for restitution according to the KGRG. Furthermore, the Art Restitution Act (KGRG) provides for a legal regime dedicated to the restitution of Nazi-looted art. NOVEMBER 2017 ART LAW: RESTRICTIONS ON THE EXPORT OF CULTURAL PROPERTY AND ARTWORK 21

24 3. Under which conditions does your country assist foreign countries seeking repatriation of cultural property/artwork? Most notably within the framework of the Internal Market Information System provides for support in the repatriation before the initiation of civil proceedings. As set forth in Directive 2014/69/EU, the central institutions of the Member States concerned are to cooperate in order to ease repatriation. 4. Does a buyer enjoy protection against restitution claims for violation of foreign export restrictions? See question A.5 above for compensation and due diligence. 5. Which regulations exist for the protection of the purchaser against title claims? The civil law title to cultural property is to be treated independently of its cultural property status. In terms of ownership, for the duration of its unlawful removal, the legal fiction applies that the property law statute of the country of origin continues to apply until the object is returned to its country of origin. This is to provide that the unlawful removal cannot serve to improve the removers legal situation (eg, by allowing him to acquire the object through adverse possession). 6. Does a lender from abroad enjoy protection against seizure of items on loan to local exhibitors if the good fails to have proper export licence? The wording of the Law does not provide for exceptions for objects on loan if the removal was unlawful, the restitution regime applies. For further information see question A.5 above. 7. What regulations exist concerning the import of cultural property that may have been exported illegally from its country of origin or that is the subject of claims? See question A.5 above. D. Due diligence obligations 1. What general due diligence is required from the seller/buyer of artwork if the artwork is intended to be exported? As already touched upon in question A.5 above, due diligence requirements depend on the trustworthiness of the sources from which the object was acquired (eg, reputed auction houses versus back-yard sales). Other factors include whether the buyer is a commercial or private entity. Where available, public databases of unlawfully removed objects will have to be interrogated as part of a thorough due diligence process. 2. Are there any anti-money laundering regulations applicable in the art trade and at art auctions? Stringent and fairly complex regulations apply to art dealers and auction houses, who are required to identify the person economically responsible for a purchase above the threshold of 15,000. Duties include the documentation of valid ID, the analysis of corporate structures in order to define the natural person on whose behalf the transfer is being effected, as well as pre-emptive information of tax-authorities. 22 Art law: Restrictions on the export of cultural property and artwork NOVEMBER 2017