An interview with Klaus Hillmann, Director of Tandem Lagerhaus und Kraftverkehr Kunst GmbH, about EU Regulation 2019/880 (hereinafter: Import Regulation) and Commission Implementing Regulation 2021/1079 (hereinafter: Implementing Regulation) on the Import of Cultural Goods, by Katharina Garbers-von Boehm and Anne-Sophie Nardon.
International exhibitions and the trade in artworks necessitate their import and export to various countries and trade zones. The Import Regulation, as well as the new Implementing Regulation, aim at protecting cultural heritage by combatting the illicit trade in cultural goods. Its side effect: A lot of bureaucracy.
In his June 2024 blogpost “Politics over Pragmatism”, Martin Wilson outlined the mechanics of the Import Regulation, which, in a nutshell, provides for an entry barrier for cultural goods of non-EU origin if their legal export from their country of origin cannot be proven by the importer.
One of the most important features of the Import Regulation is the development of a centralised electronic system (the ‘ICG system’), for the storage and exchange of information between Member State authorities in charge of implementing the Regulation, and the online accomplishment of formalities by operators, namely the online submission of applications for import licences to the Member State’s competent authorities and the issue of those licences, and the submission of importer statements by operators to EU customs. The ICG system is to become operational by 28 June 2025 at the latest.
For the purpose of the Import Regulation, the Implementing Regulation provides for detailed arrangements for certain exceptions to import document requirements; the issue, validity and use of import licences and the drawing up and use of importer statements; and the deployment, operation and maintenance of the ICG system.
The first to deal with frontline import formalities will be specialized fine art shippers such as Klaus Hillmann. Klaus Hillmann kindly agreed to assess the challenges and implications that may arise from the Implementing Regulation from a shipper’s practical perspective.
As the director of Tandem, he provides special warehousing and international logistic services for fine art, while actively participating in several national and international boards and working groups on cultural property matters. He combines his practical skills as a shipper and always has his finger on the pulse of legal developments regarding import and export.
Klaus Hillmann has worked with clients in complying with the new requirements of the Import Regulation, and was so kind to provide answers to our questions:
It is better to adapt to and engage in this process of negotiation than to insist on rules that can ultimately be implemented differently in each member state.
Mr. Hillmann, the import regime of cultural property into the EU is a moving target. In addition to EU Regulation 2019/880, now Implementing Regulation 2021/1079 has to be taken into account. Is this an additional hurdle?
It is true that customs regulations in the context of cultural property are always evolving. It is important to note that after each reform, the Customs Code has been re-established through many individual decisions, appeals and court rulings. It will never be a fixed, reliable set of rules. The EU is a living organism of 27 states and thousands of individual interests that are constantly being renegotiated.
It is better to adapt to and engage in this process of negotiation than to insist on rules that can ultimately be implemented differently in each member state.
This is why I was always willing to get involved in the legislative process. My experiences with getting involved in the legislative process of the German Cultural Property Protection Act and the transposition of the European VAT Directive into German law were very positive. We freight forwarders were asked for our opinion and our objections and suggestions were taken into account.
To come back to your question: It is true that the Implementing Regulation with its “ICG System” requires some additional bureaucracy, but also provides for instructions.
Who is eligible to apply for an import licence under Article 4 of the Import Regulation, or submit an importer statement pursuant to Article 5? May others apply instead of the owner?
Article 4 of the Implementing Regulation states that “the holder” is the applicant. In my view, this means that only the (natural or legal) person who has the cultural object to be imported in its possession can apply for an import licence and submit an importer statement. Otherwise, the importer will not be able to provide the necessary information and evidence. Since these extend into the past, information from previous owners or changing owners may also be necessary, but the current holder is the key figure who submits the application to import the goods. Whether this has to be done personally or through authorised agents, will remain unclear, and in practice, we will have to play trial and error. The regulation remains unclear, and German customs have not yet responded to my inquiry on this.
Also, the template for the import licence (Annex II of the Implementing Regulation) still has to be implemented by the Member States in their own versions.[1] Therefore, according to the current state of knowledge, reference can only be made to previous practice and our experience regarding export licences: Looking at the export licence procedure, yes, the applicant of the licence may indeed differ from the person making the customs declaration. This is regularly the case. A transaction that requires the export or import of a cultural good regularly involves many different parties, e.g., a buyer, a consignor, a commission agent and a shipper. They each share available information and split bureaucratic efforts.
Must the applicant be established within the EU, or can non-EU residents apply?
The Import and Implementing Regulations do not provide any explicit information on this. But in practice, only applicants resident in the respective Member State can make a customs declaration within that same Member State. This applies in particular to applicants being shippers who have a German customs number and have also deposited the corresponding guarantees with local customs. In fact, this often also applies to the applicant in the import licence procedure.
When must the import licence application or importer statement be submitted? Can this be made after the goods enter the EU?
The import licence or the importer statement must be provided to the customs authorities before the good is released for free circulation in the EU or placed under other customs procedures. In the case of placing cultural goods under the free zone regime, the holder of the goods must provide the import licence or the importer statement at the time of presentation of the goods. The application for an import licence must be submitted to the competent authority of the Member State in which the cultural object is imported for the first time and placed at least under temporary or permanent admission. Art. 4 par. 1 Implementing Regulation provides that even before this, the cultural good must be entered into the IT database (ICG System) by way of a “standardised general description”. So, in total at least two steps are necessary: A “general description” entered into the ICG System, an application for an import licence or an importer statement.
Which Member State is responsible for issuing the import licence if goods pass through multiple countries under transit?
The licence must be applied for in the Member State where the goods are to be “imported” for the first time. The Regulation defines "import" as either the release for free circulation in the Union or the placing of the goods under a special customs procedure such as storage in a customs warehouse or free zone, temporary admission, end-use or inward processing. The transit procedure is not considered/defined as "import".
What documents are necessary for the application?
The Implementing Regulation, in its Arts. 8 and 12, lists the supporting documents which are necessary to prove licit provenance. However, according to Art. 8 par. 1 (d) and Art. 12 par. 4, the types of documents listed are not exhaustive. Which documents are regarded as being suitable may vary from case to case and from customs officer to customs officer.
The specific form and required information for the application are further explained in Annex I of the Implementing Regulation.
Annex I provide for a so-called “data dictionary”, which provides specific instructions how to prepare general descriptions, import licences and importer statements. Among other things, the “data dictionary” further specifies which information must be contained in the general description such as the type of cultural good, materials, technique, title, subject, dating, maker, origin, a description, custom value etc…
This information will also be included in the Import Licence if the application is successful.
Is a single licence applicable for multiple cultural objects, such as collections?
In principle, a separate import licence must be applied for each cultural good (Art. 6 par. 2 of the Implementing Regulation). It is up to the competent authority to decide whether a single import licence is sufficient for a consignment consisting of several cultural goods. An exception is provided for coins of the same denomination, in which case no single import licence is required for each coin.
How can a rejected licence be appealed, and where is this documented in the ICG system?
There is the possibility to appeal like for any administrative decision. How this should work via the ICG system is still unclear. As the regulation has not yet been implemented in the Member states, it has not been tested in practice, yet. This particularly applies to the ICG system and the respective software. So far, I can only refer to the legal framework. Pursuant to Art. 24 par. 2 of the Implementing Regulation, “every input, modification and deletion of data shall be recorded together with information giving the reason for and exact time of such processing and identifying the person who carried it out.” According to Art. 6 par. 5. of the Implementing Regulation, “a competent authority may revoke an import authorisation it has issued, if the conditions under which it was granted are no longer met. The administrative decision revoking the import licence, together with a statement of reasons and information on the appeal procedure, shall be communicated to the holder of the import licence via the ICG system. The revocation of an import licence shall trigger an alert in the ICG system to inform the other Member State customs and competent authorities.”
Can cultural goods be confiscated if an import licence is denied?
The Regulation does not cover the confiscation, restitution or return of unlawfully exported cultural goods. This was already clear from a draft of the Regulation from 2016. Generally speaking, in such a case, the competent authority must take the appropriate measures based on relevant EU and national legislation, such as cultural protection law and/or criminal law provisions (e.g., laws against theft, fraud, receiving or selling the proceeds of crime, etc.).
How can cultural property be released from confiscation?
By appealing against the administrative order. On the merits, the appeal will be successful if the importer can prove the legal export from the cultural good’s country of origin.
What is the progress of the ICG system's implementation, and will it be functional by 28 June 2025?
It is still completely unclear whether the requirement that the system will be ready for use as of 28 June 2025 can be met. The actual implementation progress is not known to the public. All sectors which are affected, e.g., the insurance industry, are currently looking at possible implications.
What details are known about the ICG system’s functionality for applications?
The information given in the data dictionary and specifications for the preparation of the general descriptions, the import licences and the importer statements are very interesting to read. The same is true for Annex II (import licence and importer statement templates). Looking at these texts, one can guess what the forms and interfaces will look like.
In Art. 23 of the Implementing Regulation, contingency arrangements are provided for. A writable electronic template must be provided for, even in case the ICG system is down. Other than that, the details of the ICG system and its operational features are up to each Member State and its way of implementing the Regulation.
Can the applications or statements within the meaning of the Regulation be submitted in the ICG system together with the corresponding customs declarations for the desired customs procedure type?
No, the applications are submitted separately as they are addressed to different authorities. The customs authorities have no insight into the ICG system. In addition, the customs declaration requires an import licence, which must be enclosed with the declaration. An application for an import licence is therefore required beforehand. If this has been granted, the authorisation and the customs declaration can also be sent separately - but this is unlikely to be very efficient.
Are digital signatures required, and in what format must photographs be uploaded?
The declaration of the applicant stating that all information submitted is correct requires an electronic signature of the holder of the cultural good, see Annex I, I.20. The format of photographs is still unclear; generally, three-dimensional objects must be photographs from all sides; for coins, samples or selections are sufficient.
What proof is needed for determining the category of cultural good under the Regulation?
The Implementing Regulation lists documents that can serve to determine the category of the cultural good. These include documents from customs authorities, insurance policies, wills, expert opinions, museum publications and auction catalogues (see Arts. 8 and 12).
Will fees be applied for licence applications?
The Implementing Regulation only provides that “all costs will be borne by the applicant”, see Art. 6 par. 4 Implementing Regulation. This may also refer to the cost of an expertise or the cost of photographs.
How is proof established for the location of a cultural good over the past five years?
In cases where the country of origin cannot be determined or where the good left its country of origin before 24 April 1972, the country in which the cultural good was located over the past five years is regarded as “country of interest”, and thus what counts is the legal export from such country. Proof of the location of a cultural good may be established by submitting e.g., sales agreements, insurance policies, museum catalogues or other evidence.
Pursuant to par. 2 of Art. 8 of the Implementing Regulation, the documents and other records shall be assessed freely by the competent authority on a case-by-case basis, taking into account the circumstances and the perceived risk of illegal trade.
How long may cultural goods remain temporarily for art fairs?
The favourable exception for art fairs only applies if the fair is a limited-time event, accessible to the public and previously advertised. If so, the cultural good may remain under temporary admission for as long as determined by the customs authorities. The circumstances of the specific case are taken into account, in particular the time-frame of the exhibition or art fair in question, as well as the time necessary to fulfil import requirements. This only applies if the goods are to remain within the customs territory of the EU upon the end of the art fair.
Are past import licences stored in the ICG system for reference?
The treatment of import licences already issued is not covered by the Regulation. In the light of the new Art. 24 par. 2 of the Implementing Regulation, any upcoming entry, modification and deletion of data shall be recorded, stating why, at what time and by whom it was made. However, according to Art. 7 holders of import licences being issued may refer to that licence in any new import application they like to obtain. From this, I conclude that import licences will be stored in the ICG system.
In case of doubts, you should approach customs before starting clearance: The simple question: “I have a problem – can you help me?” is a door opener.
Where can further questions be directed?
It is always good to be in contact with the competent customs office.
I would like to share with you some personal reflections on my own experiences with customs and the conclusions I draw from them. My first encounter with customs was in 1976, fifty years ago. A Cologne gallery had sent me to Paris in a delivery van to bring an exhibition by the Greek artist Costas Tsoclis to Cologne. The works were loaded at an art shipping company on the outskirts of Paris. From there, we had to clear export customs at Place de la République; a French colleague was driving in front of me. You have to remember: in 1976 there was no common market yet, every border crossing required customs clearance. Guarantees had to be provided for a simplified transit document, and customs clearance had to be done by a freight forwarder. My car had to be sealed for transit, which required a certificate for the specific vehicle. Of course, the gallery vehicle did not have a certificate, so I seemed to be lost. To my luck, the French customs officers kindly improvised a closure with strings and two seals. With that, I got through Belgium to Cologne just fine. Once there, I unloaded all the works and put them in the gallery – they obviously couldn't stay in the vehicle on the street overnight.
The next morning, a colleague from the German shipping company came to clear the import. When he saw that I had broken the seals, he was slightly distressed, because of course that was not allowed. Again, I panicked; but a phone call to the customs office resulted in a favourable decision: I got mercy instead of justice because of my inexperience. Somehow everything was settled without any penalties.
This first incident taught me three things that still stand to this day:
- Customs are complicated, and it's easier to make a mistake than you think.
- If a mistake has been made, sincerity and honesty are the best way forward.
- In case of doubts, you should approach customs before starting clearance: The simple question: “I have a problem – can you help me?” is a door opener.
I have adopted this rule as my own and have fared well with it.
Authors:
Dr. Katharina Garbers-von Boehm, Co-founder and Partner at onto partners
Anne-Sophie Nardon, Managing Partner of Borghese Associés
[1] In Annex II, box 18 and box 19 make a distinction between the «holder» and the «owner». Furthermore, the applicant needs to have a OERI identification.Since the table top was created by the renowned French glassmaker Perrot, had been owned by the French king Louis XIV, and had a relatively recent British provenance, it is understandable why the Arts Council did not consider it “closely connected with our history and national life”, and advised to base the temporary export ban on Waverley 2 and 3 [1].
Blogs are written by Art Lawyers Association members and reflect their personal views. They do not represent the views of the Association
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