Now the European Union has adopted new regulations controlling the import of cultural property, what will it mean for the art market?
The author, antiquities art dealer Vincent Geerling, has been the Chairman of the IADAA since 2013
First, it is important to understand why this measure has come in. Initially, what lay behind the European Commission's proposals was the belief that ISIS-looted artefacts from conflict zones were making their way onto the European market to fund terrorism, and this had to be stopped. The Commission ordered two studies to look into the extent of the problem. The second report is yet to come, but the first study by Deloitte, which consulted all 28 EU Members States, found no evidence at all of this happening. Despite this, the Commission, the Council of Ministers and the European Parliament decided to legislate anyway, putting forward new arguments that the proposals would harmonise regulations across the EU and act as preventative measures for the future.
This change in direction is extremely significant because it alters not only the premise for adopting the legislation but also the balance of interests between public security and the international art market. As the EU has consistently promised, any measures adopted should be proportionate and not unduly damage the legitimate market. It may be reasonable to argue that the art market must accept the burden of highly restrictive legislation in order to stop an existing crime wave of terrorism funding, but, equally, measures to mitigate the risk of something that might or might not happen in the future – a lower risk level, in other words – should acknowledge that the balance of interests ought to favour those of the market.
Having scrutinised this process over a long period of time, the International Association of Dealers in Ancient Art (IADAA) and the CINOA (international confederation of art and antiques dealers) argue that while the premise for the measures may have changed, the balance of the proposals has not moved with it, leaving us with regulations that are disproportionate and will, indeed, unduly damage the market. These measures, which will have immediate power of law in all EU Member states (overruling local laws), have been rushed through parliament in an unprecedented way in only one reading. The result is an unworkable, costly, flawed regulation at odds with international law.
In short, once the European Commission has introduced a fully operational, newly built electronic system for administering and recording imports in line with the regulations (expected by 2025 at the latest), cultural property (encompassing art, antiques, antiquities and other artefacts) entering the EU will be subject to a two-tier “licensing” process.
Essentially, items deemed at high risk of having been looted and “funding terrorism” – antiquities and pieces from monuments over 250 years old and originating outside the EU, regardless of their value – will have to pass a test to prove that they have been exported legally. While applying for an “export licence”, importers will have to provide paperwork showing legal exportation from the source country under the laws of that country at the time of export. It should be remembered that this does not just apply to artefacts from ISIS-plagued states like Iraq, Syria and Libya, but also to Asian art, Islamic art and ethnic art of all types, from the Oceanic art of the Pacific to the native tribal art of the Americas and Australia.
For the hundreds of thousands of objects that have been legitimately on the market for decades or even centuries, providing such proof will be impossible because of the amount of time that has passed since the original exportation, the difficulty in identifying when that was, the likelihood that no information exists on what relevant laws applied at the time, and the almost certain lack of paperwork.
Where this is the case, and in the absence of either a valid export licence from the source country or other paperwork establishing legal exportation, the regulations allow for an exemption in two very limited exceptional cases, as long as it can be shown that an item was legally exported from the last country where it had been located for an unbroken period of over five years. The first is where the source country cannot be reliably identified; the second is where it can be shown that the item in question was exported from its source country before 24 April 1972: the date when the UNESCO Convention came into force.
The latter condition ignores the fact that countries adhering to the Convention may have joined years, if not decades, later, and so introduces more restrictive measures than the source countries themselves would ever have agreed to. It is likely that most of these countries are not aware of this EU decision. This alone calls the notion of balance into question.
What this also appears to mean, in effect, is that anything legally exported from source countries after 24 April 1972 would not be recognised as licit in terms of importation to the EU unless actually accompanied by a valid export licence. Take, for example, Egypt, which continued to export artefacts legally until 1983. Under the new regulations, an item legally exported from Egypt in 1978 accompanied by reasonable paperwork proving this, but not an actual export licence, might still be deemed illicit in terms of importation to the EU because this took place after 24 April 1972.
Paragraph 7 of the new regulations makes it clear that the definition of cultural property adopted is based on the 1970 UNESCO Convention and the 1995 UNIDROIT Convention. However, while the UNESCO Convention restricts itself to items “…specifically designated by each State as being of importance”, the terms of the new EU regulations are far broader: “Art. 2: ‘Cultural property’ means any item of importance in terms of archaeology, prehistory, history, literature, art or science, as listed in the Annex”.
This will render the import of many licit items uneconomic, while the extensive customs processing period of several months will also be a problem for dealers attending fairs, and dealers and auctioneers selling on to customers.
For everything else – items deemed less at risk – from paintings and drawings to sculpture, historical items, flora, fauna and so on, importers will need to provide importer statements proving legal exportation from the source country, backed up by appropriate documentation, if the item in question originated outside the EU, is more than 200 years old and valued at more than €18,000. Again, this is likely to have implications for dealers, auctioneers and collectors for the reasons given above.
Importer statements may seem like a softer option, but the risks involved in using them could actually be greater, because declarants have legal responsibility for the statements they issue and the status of the items imported. This means that even when importers act in good faith and provide the relevant paperwork to support a statement, they could still be held liable under the new regulations if it is later discovered that an item was stolen or illegally exported at an earlier time, before it came into their possession. The authorities have made it clear that there will be severe penalties for those who breach the new regulations. These days, retrospective liability of this kind is the curse of the modern legislative process across the board.
What makes this all so unnecessary is that effective restrictions already apply within the EU when it comes to Syria and Iraq*; it would have been much simpler and more cost-effective to extend them to cover Libya, Yemen and any other source countries identified as being at risk, and this would have easily fulfilled the EU’s self-expressed commitment to proportionality regarding the legitimate market.
Even after taking all the above into account, it is not clear how the licensing process will adequately comply with potentially conflicting legislation on consumer privacy and data protection, although counter-terrorism measures tend to outweigh other considerations. Still, importers will be understandably nervous of vague reassurances on this front, so whatever the rules are, they will need to be crystal-clear.
What is obvious is that the paperwork involved is unlikely to be easy or brief. Talk of adopting Object ID – the international standard for identifying items – and adding “appropriate supportive documents and evidence”, including but not limited to export certificates or licences, ownership titles, invoices, sales contracts, insurance documents and transport documents, is just the beginning, as shown by the final amendment for Recital 10 of the rules. Recital 11 refers to a “standardised document” recommended by UNESCO, but does not indicate how long or detailed this might be. Experience tells me that it is unlikely to be either short or clear.
Assuming the system eventually works, one advantage is that a standardised record will be shared electronically between all EU Member States, which may be of help to the market when it comes to moving registered goods again in the future (export licensing).
None of the above even begins to address the additional burden on both the art trade and customs and what this might mean in terms of additional cost, starting with a new and complex electronic system for all Member States.
Taking all this into account, IADAA intends to continue working with stakeholders – including undertaking a legal review of the adopted terms – to ensure that the measures are adapted to a more workable formula prior to enforcement.*Regulations (EC) No. 1210/2003 and (EU) No. 36/2012