The New EU Cultural Goods Import Law – Politics over Pragmatism?

The ownership and display of ancient art has become increasingly controversial. Ancient cultural property has since the 1970 UNESCO Convention been the focus of repatriation claims by countries who are or have in the past been victims of looting and smuggling. In recent years however a darker narrative has evolved that there might be a market for looted and illegally exported antiquities – particularly from conflict zones - which is in turn linked to money laundering and terrorist financing. This has coincided with European countries examining their colonial past and questioning the provenance of antiquities which have in the past been considered to be in legitimate circulation or on display. All of these aspects of cultural property are the subject of vigorous debate. Critics point out, for instance, that there is little data or concrete evidence to support the proposition that there is a thriving illicit trade in illegally exported artworks or indeed that any such trade has a link with money laundering and terrorist finance[1]. And while public and political opinion on the subject or repatriation has appeared in recent years to move in favour of claimant countries, the law in most art market countries does not support repatriation claimants. Such claims, when tested in court, are frequently extinguished by limitation periods, by subsequent good faith transactions, by evidential requirements, by the fact that in many cases the artwork was lawfully acquired in the first place and by the fact that most countries will, as a matter of principle, not enforce the national export laws of third countries[2]. And the debate over artworks acquired during colonial rule has become a highly charged domestic ideological debate as well as a national and international political issue. Perhaps because of the polarisation of the debate all these very different issues have also tended to be conflated and confused in discussion, leading to understandable uncertainty about what we mean when we talk about “licit” and “illicit cultural property.

It is this very complex debate over antiquities which appears to have been the catalyst for the new cultural goods import law[3] being introduced by the European Union (EU). Rather than getting caught up in ethical or evidential considerations about the circumstances in which the artwork was acquired, the new EU cultural goods import law has tried to swerve around these difficult questions. It has done so first by framing the problem as one of money laundering and terrorist finance rather than ownership. It has then used customs compliance as the benchmark test for defining whether an artwork is licit or illicit. Finally it has applied the new regime to all categories of art which are not or EU origin- not just antiquities.

There are three novel aspects to this law.  First, it seeks to create a barrier to entry into the EU for non-compliant cultural property artworks[4]. Second, it defines compliance by reference to the national customs legislation of the country in which the object was created or from which it was exported. Finally, the law reverses the burden of proof. It is now for the importer to prove legal export rather than the country of origin to prove non-compliance.

 

The new legislation seeks to do this by (i) establishing a general principle denying entry into the EU of any artworks removed from the territory of the country where the artwork was exported in breach of the laws and regulations of that country – regardless of when that happened. (ii) for archaeological objects over 250 years old, requiring importers to provide evidence of legal export from the country of origin and (iii) for non-archaeological artworks over 200 years old with a value over 18,000 Euros, requiring a declaration attesting to lawful exportation, which could also require supporting documentation by the importer.

 

The evidential rules are slightly less onerous for artworks if the importer is able to provide evidence that the artwork was taken out of its country of origin before 24 April 1972. In such cases the importer need only provide documentation proving that the object was legally exported from the last country it resided in for more than five years or - in the case of artworks in category (iii) - make an importer statement declaring that these conditions have been met. 

 

To ensure that the law does not prevent the return or re-import of cultural property of EU origin these requirements will not apply to the re-importation of cultural property which originated in the EU or which, regardless of origin, was previously exported from the EU and is now being returned.

 

Finally, the legislation allows the authorities to reject an import application where they believe that the country where the artwork was created is asserting a claim to the artwork (presumably even where the importer has provided the necessary evidence of legal export).

 

Whether or not one agrees with the diagnosis or the prescription there are likely to be some major practical challenges and unintended consequences with this approach.

1.    Will it stop trafficking of cultural property?

 

The stated objective of the legislation is to fight money laundering and terrorist finance by stopping the illicit trafficking of cultural property. This law has chosen to achieve this by preventing works which cannot be proved to satisfy certain stringent tests from entering the EU. One of the obvious difficulties with this strategy is that it functions only to hinder attempts to traffic illicit artworks (and licit artworks which cannot be proved to be licit) into the EU.  In this way the best-case scenario is that trafficking activities will simply be diverted to elsewhere in the world by this law, not stopped.  

 

But even the best-case scenario may prove optimistic. The nature of trafficking is that it involves smuggling – in other words taking objects across borders without declaring them. While the legitimate art market will likely shoulder these new administrative burdens and do whatever possible to comply with the new requirements, traffickers will be unaffected as they will continue to ignore the law, smuggling artworks across borders. There is a risk that the more difficult it is to import an object legitimately the greater the incentive to resort to smuggling and the greater the rewards for doing so. If that happens trafficking activities will be neither stopped nor diverted - and may even increase.

 

It is also questionable whether compliance or non-compliance with local administrative customs rules is the correct test for determining whether an artwork  is being used for money laundering, terrorist financing or other serious crimes. It is certainly the case that a breach of customs law may be associated with other criminal behaviour, but it is a distinct and separate offence from the theft, money laundering and terrorist financing which the law is seeking to hinder. That may not matter in practice if it proves to prevent money laundering and terrorist financing but using customs law compliance as the central test also risks tainting every artwork without export papers as being looted, a money laundering risk and potential income for terrorists.

2.    Will it result in repatriation of cultural property?

While not the stated purpose of the legislation, many countries will welcome the legislation on the basis that it may assist them in identifying, claiming and recovering cultural property. Indeed, this may well have been one of the factors which has encouraged legislators to use export compliance as the test of whether an artwork is licit or not. Countries seeking repatriation of cultural property have long argued in favour of laws which automatically give rise to restitution obligations where the owner cannot prove that the object has a valid export licence from the country of origin. This law comes close to doing that. The ability of a country of origin to prevent the grant of an import licence being granted by simply asserting a claim to an artwork will encourage repatriation claims and greatly strengthen the claimant’s negotiating hand. It is a device likely to be used by claimant countries where, because the law or evidence is not favourable to a claim, the claimant relies instead upon historical and moral arguments in favour of repatriation. But in reality the effect is more likely to be that artworks, rather than being restituted, will be stuck in customs limbo where such claims are made. And the possibility – however remote - of a claim of this kind will deter not just traffickers but anyone considering importing artworks into the EU. 

3.    How will it affect the legitimate market?

Ironically, it is possible – and indeed likely -  that this legislation will have a far greater impact upon the legitimate market than the illicit market.

 

As we have seen, the legislation assumes, as a starting point, that if an object left a country legitimately it will have been accompanied by an export licence and that a record will exist somewhere of the licence being granted. In practice that is rarely the case – and usually for good reason.  Many artworks left their countries of origin legally long before export licensing and laws protecting buried antiquities were put in place. Export laws and licensing systems have also developed over time, often being added to or amended along the way. These laws were also not always uniformly enforced at national level. And even if an artwork left a country with permission the licence will have served its purpose once the border was crossed so would often be lost or disposed of. It should also be remembered that provenance has only recently become an important consideration for buyers and sellers. Works were routinely traded, gifted or inherited in the past without mention or documentation relating to their ownership or travel history. We may find that surprising and questionable by today’s standards but the point is that the practical effect of that lack of curiosity about provenance in the past is that provenance records for licit artworks were not made and/or have not been kept.  Provenance and export records for many artworks are therefore usually, for perfectly legitimate reasons, incomplete or non-existent. That may not be a desirable state of affairs but it is a reality which appears to have been ignored by the legislator and will make it difficult and, in a very significant number cases, impossible for importers of perfectly licit artworks to provide the evidence necessary to comply with the law.

 

Making a declaration under the new regulations is also not without risk as it is expected that declarations which are later, when new evidence comes to light, found to be false will be treated as a criminal offence. Because the compliance threshold has been set so high, and because the consequences of getting it wrong or being accused of getting it wrong are so serious, the danger is that legitimate cultural objects which might otherwise have been sold in the EU will instead be traded and collected in the thriving art markets outside the EU where these rules – and the attendant risks to the importer - do not apply.

 

While the burden of compliance will be very high for those seeking to import artworks in the EU, the greatest burden will fall upon EU countries themselves, who will need, by a deadline of 28 June 2025, to establish an IT system capable of scrutinising the history of the huge number of artworks entering the EU and sharing information about the applications and outcomes throughout the EU customs network. The plan is to do this electronically, but this will be a mammoth task.  Customs officials and other enforcement personnel are also unlikely to have the specialized knowledge required to accurately assess the documentation and provenance of cultural goods. They will need to become specialists in the export laws – past and present - of countries all over the world. They will also need to be specialists in artworks and art history.  And because it is likely that they will be none of these things they will probably err on the side of caution – refusing applications for which the paperwork is not familiar or not obviously complete.  This is likely to result in delays, inconsistent enforcement and unjustified refusals. This added complexity will cause significant delays in the import process – a fact implicitly recognised by the legislation allowing the authorities up to 90 days from submission of the application to make a decision. This complexity and delay – as well as the likely inconsistency of decisions - will likely be a strong disincentive to import art of any kind or origin into the EU. This will lead to fewer imports into the EU of art and fewer EU buyers of art in countries outside the EU . By making it harder to import cultural property, the EU will then risk becoming culturally isolated.

 

Any measure which actually prevents money laundering is to be applauded. The danger here though is that the legislation may in practice do nothing to prevent money laundering but instead provide a strong incentive for owners of legitimate artworks to avoid Europe.

Martin Wilson is Chief Legal Officer at Phillips Auctioneers and author of Art Law and the Business of Art

[1] RAND Corporation publication, Tracking and Disrupting the Illicit Antiquities Trade with Open Source Data.

[2] See for instance the judgment in the Stargazer Case Republic of Turkey v Christies Inc and Others

[3] Regulation 2019/880 17 April 2019

[4]The United Kingdom is not within the EU and has chosen not to apply the requirements  of the EU import law to imports of artworks into the United Kingdom.  However the law will apply to artworks shipped from the UK into the EU.