2018 was the European Year of Cultural Heritage, during which the EU pledged to take action to stem the illicit trafficking of cultural goods both within and outside of the EU. This led the European Commission to propose a new EU Regulation designed to prevent the importation into the EU of cultural goods illicitly exported from their country of origin. The Regulation was originally due to be adopted by the end of 2018 but following the significant and numerous amendments and comments received from stakeholders and Member States, the timetable was delayed. On 7 November 2018, the EU Council adopted a new text and on 11 December 2018, a provisional interinstitutional agreement was reached. The Council will now aim to reach agreement with the European Parliament on the final text.
Save for the regulations adopted following the UN Security Council Resolutions to prevent illicit imports of cultural goods from Iraq and Syria, there is no uniform legislation on the control of imports of cultural property into the EU. The proposed EU Import Regulation seeks to introduce a common licensing system whereby a broad range of cultural objects will require an EU import licence to enter a Member State from outside the EU.
Whilst it is difficult to disagree with the main objective of the Regulation, which is to ‘ensure the effective protection against the loss of cultural goods, the preservation of humanity’s cultural heritage and the prevention of terrorist financing through the selling of looted cultural heritage to buyers in the Union’, the Regulation is fundamentally flawed. The main reasons are:
- One of the stated objectives of the Regulation is to ‘prohibit the entry of the customs territory of the Union of cultural goods unlawfully exported from third countries’ (Recital 2). The fact that an item of cultural property was unlawfully exported does not mean that it was looted. Whilst illegal export of privately owned items during conflict or natural disaster may have an equally detrimental effect as looting, being the loss of cultural heritage, outside of such circumstances these are different concepts that should not be confused. If cultural property is looted, it is likely to have been illegally exported, however, many items of cultural property have been illegally exported yet their provenance and ownership are perfectly legitimate, and they have not been looted. Their illegality may simply be a matter of a failure by the legal owner to obtain the correct paperwork. Therefore, outside of conflict or situations of natural disaster when cultural property is most at risk, to equate looting and illegal export is simply wrong. Furthermore, many countries around the world have adopted confiscatory export control laws that are not compatible with European human rights, in particular the right of ownership and enjoyment of private property. Finally, save for in exceptional circumstances such as conflict or natural disaster, in the absence of reciprocity, why should the EU assist foreign countries in recovering cultural property illegally exported but legitimately owned, if that property was not looted? Does China or Mexico decline to allow the import into their country of cultural property illegally exported from, say, Italy or Greece?
- The Regulation uses the categories of cultural property set out in the UNIDROIT 1995 Convention combined with a 250 year threshold. These categories catch a broad range of cultural property, rather than focusing on cultural objects known to be at risk of looting and/or illegal traffic;
- The importation into the EU of a vast array of cultural goods will be subject to the production of documentation that, in many cases, will not be available to the importer, effectively preventing many cultural goods from entering the EU, irrespective of their legitimate ownership or provenance. This, in turn, will negatively affect the study, collecting and trading of art within the EU;
- Import controls introduced by the Regulation will be open to abuse by traffickers;
- The Regulation assumes a significant investment in creating and maintaining a database of cultural property covered by the Regulation, and on training Customs officers. This raises a question of proportionality: is this significant investment proportionate to achieving the objective of the Regulation? Should the focus not be on those objects most at risk to ensure the Regulation is proportionate (and effective) in achieving its objective?
In this blog, we comment on the proposed Regulation as adopted by the EU Council and sent to the European Parliament, highlighting the changes that have been made to the original draft that Constantine Cannon LLP and other stakeholders requested, and the issues that remain in the current draft.
Article 3 of the Regulation sets the scene: ‘the introduction of cultural goods listed in Part A of the Annex which were removed from the territory of the country where they were created or discovered in breach of its laws and regulations is prohibited’. The list of cultural goods in Part A is very broad. It includes works of fine art, antiques and collectible items.
If the item was removed unlawfully from the territory of the country where it was created or discovered, it will be prohibited to import it into the EU. Given that items created or discovered in EU countries fall outside the scope of the Regulation, those collecting or handling the following collecting categories are most likely to be affected by the Regulation: ancient art (including from countries in the Eastern and Southern Mediterranean basin, Persia, India, South and Central America), Asian art, tribal art, carpets and textiles, Oceanic and Eskimo art, Islamic art and Pre-Columbian art.
The importation of works of fine art, antiques and collectible items into the EU will require an EU import licence if they are deemed high risk (archaeology, items removed from monuments and sites and manuscripts and incunabula – Part B of the Annex) and they are at least 250 years old. In the case of manuscripts and incunabula only, the importer requires an import licence if their market value is €10,000 or more.
If the item is not deemed high risk (Part C of the Annex), a declaration by the importer that the item was not unlawfully removed will suffice.
The Earlier Draft Regulation
The earlier draft of the Regulation relied heavily on the implementation of the 1970 UNESCO Convention, which was a fundamental flaw. To be imported into the EU, an item would either have needed an export licence from the country of origin, or if it was being exported from another country and that country had ratified the UNESCO Convention, the importer would have needed to demonstrate that export from that country was lawful. Given that 137 countries have ratified the UNESCO Convention, it was highly likely that the latter option would have been used in most cases. This approach was flawed for several reasons:
- Implementation measures and dates vary greatly between countries that ratified the UNESCO Convention;
- Countries that recently ratified the UNESCO Convention would be targeted by traffickers because traffickers would be more likely to obtain a valid paper trail in those countries; and
- It is often difficult to determine the country of origin.
The current draft of the Regulation has addressed some of the concerns raised by stakeholders, including Constantine Cannon LLP. Some notable and welcome changes to the Regulation are:
- The Regulation does not apply to cultural goods which were either created or discovered in the customs territory of the European Union;
- The difficulty over establishing a country of origin has been addressed and there are now alternatives in cases where the country in which the item was created or discovered cannot reasonably be determined;
- The application of the UNESCO Convention has been streamlined to address the problem that implementation measures and dates vary so greatly between ratifying states;
- There is now an exemption for items that are imported for the purpose of study, conservation or exhibition at a museum provided that such items are kept under temporary admission;
- Items which are imported for safeguarding purposes (such as to prevent their destruction or damage during conflict) are exempt;
- Items kept under temporary admission for display at art fairs are exempt provided that if sold within the EU, an import certificate is provided (if the property is listed in Part B) before the item can be removed from temporary admission into free circulation;
- Items being imported but stored in a freeport facility will require an import licence; and
- It is open to the importer to show that an export licence was not required at the time of export.
The Current Draft Regulation
Cultural goods covered by the Regulation
The Regulation (Article 3(1) and Parts A, B and C) covers all categories of fine art, antiques and collectibles more than 250 years old. Except for the product of archaeological excavations or discoveries on land or underwater, and elements of artistic or historical monuments or archaeological sites, there is also a financial threshold of €10,000 below which they can continue to be freely imported into the EU.
There is a serious risk of undermining the stated objective of the Regulation by seeking to catch cultural property that is not at risk of illicit traffic and leaving out cultural property at risk that is less than 250 years old from regions such as West Africa. The Regulation could have targeted cultural property effectively at risk, for example property listed by ICOM as being at risk of looting and illegal traffic. ICOM’s ‘Red Lists’ present the cultural objects most vulnerable to illicit traffic. ICOM has been publishing Red Lists since the year 2000, with the scientific collaboration of national and international experts, to cover the most vulnerable areas of the world in terms of illicit trafficking of cultural objects. They include Iraq, Cambodia, Yemen and China. These are objects in need of enhanced protection. Some of the objects listed in the Red Lists are less than 250 years old. Many objects caught by the Regulation that are more than 250 years old are not being illicitly trafficked.
Documentation not available in practice
A key provision of the Regulation is Article 4.2: the application for an EU import licence ‘shall be accompanied by any supporting documents and information providing evidence that the cultural goods in question have been exported from the country where they were created or discovered in accordance with its laws and regulations or providing evidence of the absence of such laws and regulations at the time they were taken out of its territory’.
Only in exceptional cases will the exporter from the source country on the one hand, and the importer of the cultural goods into the Union on the other, be the same party. In general, the exporter from the source country and the importer in the EU will be links in a (long) chain of possessors. Say the item was exported from Peru in 1985. The exporter sold it to John in Switzerland who sold it to Jack who exported it to the US. Sue inherited it from Jack, then sold it at auction to Sam. Sam has possessed the item in the US since 2015 and wants to import it into the EU after the Regulation comes into force. He will not be able to do so because he cannot produce the 1985 export licence from Peru. Yet when he bought the item at auction, he was under no legal obligation to obtain a copy of the Peruvian export licence. Nor would Sue or the auction house that sold it to him have had a copy. Thus, the Regulation requires importers to produce a document that they were not required to obtain when they acquired possession of the object, had no means of obtaining it in this example and had no legitimate expectation of ever having to produce it. Yet under the Regulation, in the absence of the document, Sam suffers a prejudice, i.e. the inability to import the item in the EU. It goes without saying that the fact that the document is not available does not mean that the item was unlawfully exported from Peru. There is also no suggestion that Sam is not the rightful owner of the item. The Regulation simply restrict its movement because the export licence cannot be produced.
Article 4.2 goes on to say that:
‘However, in cases where:
(a) the country where the cultural goods were created or discovered cannot be reliably determined or
(b) the cultural goods left the country where they were created or discovered before 24 April 1972, or,
(c) the country where the cultural good was created or discovered is not a State Party to the 1970 UNESCO Convention,
the application may be accompanied instead by any supporting documents and information providing evidence that the cultural goods in question have been exported in accordance with the laws and regulations of the last country where they were located for a period of more than 5 years and for purposes other than temporary use, transit, export or transhipment’.
These exceptions will not help Sam. If, however, Sam can show that the item in question was exported from Peru in, say, 1970, he could show that the item was lawfully exported from the US, assuming that the item had been in the US for more than 5 years. If not, he would have to show that the item had been in Switzerland for more than 5 years, and that it was exported lawfully from Switzerland. Sam may find it difficult if not impossible to adduce that latter evidence and may need to wait 5 years before he can rely on the exemptions.
The unfairness of the Regulation would be limited if it were possible for the importer to obtain a copy of the export licence from the source country. In practice, this is not possible. Source countries will not provide information on whether an export licence was granted for a specific cultural object, let alone a copy of the licence. Another way to alleviate the unfairness of the Regulation would be to limit the obligation to produce documentation to situations in which the item was exported from the source country after the Regulation comes into force, or, say, in the 5 years preceding the entry into force of the Regulation. A limitation in time going back 47 years (1972) means that in practice, the Regulation imposes a requirement on the importer that, in many cases, is impossible to fulfil.
Further, it is not reasonable to expect the source country, the exporter from that country or any possessor of the cultural object in the chain since the export to retain a copy of the export licence. Whilst in the last 10 years, it has become good practice to retain the export licence, more often than not, the export licence is obtained and retained by the shipper, and after the local regulatory document retention period expires, it is often destroyed.
The importer statement – a half-way house open to abuse
For cultural property deemed less high risk (Article 5.2 and Part C of the Annex), the importer will be asked to give an ‘importer statement’ consisting of ‘a declaration signed by the holder of the goods that the goods have been exported from the country where they were created or discovered in accordance with its laws and regulations or in the absence of such laws and regulations at the time they were taken out of its territory’.
The same alternative rule as in Article 4.2 applies where: (a) the country where the cultural goods were created or discovered cannot be reliably determined or (b) the cultural goods left the country where they were created or discovered before 24 April 1972, or, (c) the country where the cultural good was created or discovered is not a State Party to the 1970 UNESCO Convention. In those cases, the declaration may be that the cultural goods in question have been exported in accordance with the laws and regulations of the last country where they were located for a period of more than 5 years.
Article 10 requires Member States to introduce penalties for making false statements or submitting false information. Whilst the making of a false declaration is unlikely to perturb traffickers in looted cultural property, what evidence will honest possessors of cultural property need in order to make an ‘importer statement’ without exposing themselves to the risk of criminal prosecution? More often than not, they will not know when and in what circumstances the item left the country where it was created or discovered, and if they have not held the item for at least 5 years, they may not know when and in what circumstances the item left the last country where it was located for a period of more than 5 years. Certain assumptions can be made but how safe will it be to make a statement if you do not know?
Articles 4.2 and 5.2 raise further issues:
Date of export:
A major difficulty is establishing the date of export from the source country. There may be documentary evidence available indicating the year or period during which the cultural object was probably exported from the source country. However, in most cases, there will be no evidence pointing to the date of export. It may be possible to establish that the export from the source country occurred ‘prior to [year]’, for example if the object was sold in a market country in a given year. However, export prior to, say, 1985, is hardly helpful if one is looking to establish when exactly a cultural object was exported from the source country. It may have been exported before 1985 but was it before or after 1972?
The date of export is relevant because export controls for cultural property change over time. Depending on the date of export, different rules will apply. For Sam, it will be particularly difficult. Peru applied a law restricting the export of antiquities in 1958 but this was largely repealed and replaced in 1985 so Sam would need to know the exact date of export to determine whether it was carried out in accordance with national law.
We anticipate that we will now see a revival of the phrase “Private Collection 1970” except that it will now read “Exported prior to 1972”. Will this declaration achieve the objective of the EU to prevent illicit trafficking?
Even if you know precisely when the item was exported from the source country, establishing whether export on that date was lawful or not, and what documentation might have been required, can be very difficult in practice. There are databases of cultural property export laws such as the UNESCO Database of National Cultural Heritage Laws and the IFAR’s database of International Cultural Property Ownership & Export Legislation. These databases rely on each country providing its latest legislation and therefore there is no guarantee that they are up to date or that the legislation will be in a language understood by the importer. Not to mention that they seldom allow the researcher to reconstruct the chronology of national export controls laws. In order to find out if the object was lawfully exported, local specialist lawyers may need to be retained to verify if a licence was required, if so what licence, and if the importer has any documentation, whether the documentation counts as evidence of lawful export. This could turn into an expensive and long factual and legal enquiry for each item of cultural property.
In practice, if one buys a cultural object from an auction house or a dealer, the auction house or dealer will not provide the buyer with a copy of the export licence from the source country which in 99% of cases, the auction house or dealer will not have in its possession. Nor will the auction house or dealer have in its possession a copy of the export licence from the country where the cultural object was last located for a period of more than 5 years.
For these reasons, it will simply not be possible in many cases for the importer into the EU either to produce an export licence from the source country, or to sign the declaration required at Article 5.2. This will result in a large number of cultural objects being refused entry into the EU.
Verification by EU Customs Authority
How will Customs officials in the Member States ascertain whether documents accompanying the application for an import licence are satisfactory evidence of lawful export from the source country? Presumably, this will require that EU Customs officials have access to a database of specimen export licences from all source countries from time to time, from the date when export controls were introduced by the source country. This is a huge endeavour. Who will be in charge of creating and maintaining that database, and who will pay for it?
There will be a language issue. The importer may be required to provide the relevant EU Customs official with a certified translation of the export licence from the source country in the language of the EU country of import, to allow the Customs officer to match the export licence to the goods. This will be an additional cost for the importer and it will delay the importation process.
If at the time of export from the source country, no export licence was required, what evidence if any will the importer be required to produce? Will a declaration by the importer suffice?
Whilst the latest draft of the Regulation addresses some of the fundamental flaws of the earlier draft of the proposed import controls for cultural property, as now drafted, the Regulation will still not prevent a dishonest possessor from importing looted cultural property into the EU, yet the Regulation will disproportionally impede trade with third countries of legitimate cultural goods.
At the very least, the Regulation should be limited to cultural property known to be at risk of looting and illicit trafficking, for example property listed by ICOM in its Red Lists, rather than entire categories of cultural property by reference to genre and age. The Regulation should avoid equating looting and illegal export save in the exceptional circumstances of conflict and natural disaster. To seek to limit the looting of cultural property is a laudable aim. To offer blanket assistance to third countries to enforce their own export control laws that may amount to confiscation or expropriation is not a worthwhile aim, especially in the absence of reciprocity. If import controls are imposed, they should require the production of documents that are obtainable by legitimate owners of cultural property. This means the production of export licences either from the date when the Regulation becomes applicable (probably not before 30 months after the entry into force of the Regulation, Article 16.2), or from a reasonable, earlier date, that may well depend on the source country (e.g. for Iraq, the date of the first UN sanctions resolution). The practicalities and costs of monitoring compliance and enforcing the Regulation should be seriously considered. The cost of putting in place systems in EU countries to give it effect, and the time it will take to do so, may have been underestimated. This cost would be greatly reduced if the Regulation focussed only on the most at risk items. Finally, the Regulation in its current form carries the risk that either the flow of cultural property into the EU will be severely curtailed, thereby diverting the legitimate art trade to more welcoming centres such as the US, Switzerland and the UK (after Brexit), or that national Customs authorities will accept ‘importer statements’ without exercising any control, thereby making a mockery of the laudable primary objective of the Regulation.
Pierre Valentin and Fionnuala Rogers
 Council Regulations (EC) No 1210/2003 and (EU) No 36/2012 respectively