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July 25, 2019updated 06 Aug 2019 4:59pm

Boris Johnson’s ‘do or die’ brexit: what could it mean for the art market?

By Spear's

Boris Johnson’s ‘do or die’ pledge caused worries for the art market in the light of new legislation from the European Union, writes Catherine Pugsley

Whilst Boris Johnson is reported to relax in the evening by creating and painting a ‘Boris Bus’ with his girlfriend, one wonders whether his personal enjoyment of art will be enough to quell the fears of some in the art world that his ‘do or die’ Brexit policy will sound a death knell for the art market in the light of new legislation from the European Union.

On 7 June 2019, the European Parliament adopted the EU Regulation on the introduction and import of cultural goods (the Regulation). The intention behind the Regulation is to ‘preserve humanity’s cultural heritage in particular archaeological objects in countries affected by armed conflict and to prevent terrorist financing through such trafficking’ and originated with the intention to tackle the alternative sources of financing of terrorism, including the looting and smuggling of antiquities.

The Regulation was first tabled in 2016 after the persistent pillaging of artwork and historic artefacts by ISIS, in Syria, to finance their military campaign. Who could ever forget the sickening torture and death in 2015 of Khaled al-Asaad, the revered head of antiquities in the ancient Syrian city of Palmyra.  He, with Qassem Abdullah Yehya, protected the UNESCO heritage site and evacuated much of the art work in the city museum in an attempt to save that cultural heritage from falling into the hands of ISIS but both sacrificed their lives.

The Regulation relies on the definitions of the UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. It will cover goods that are created or discovered outside the EU which are due to be released into the EU in free circulation or to be placed under a customs procedure other than transit. The Regulation will not apply to goods that were created or discovered within the customs territory of the EU.

The definition of cultural objects that are covered in the comprehensive annex to the Regulation is exceptionally wide. It includes collections of flora and fauna and objects of palaeontological interest, property relating to history, to the life of national leaders, thinkers, scientists as well as monuments, archaeological excavations, stamps, coins, rare manuscripts and incunabula, and fine artworks.

The Regulation applies to certain categories of cultural goods depending on age. For example, it will apply to products of archaeological excavations more than 250 years old whatever their value but other cultural goods will have a minimum age threshold of 200 years and a value of more than €18,000.

All of the goods which fall into the categories listed in the Regulation will require a special licence issued by an EU country. The licence will be issued upon proof by the importer that the goods have been lawfully exported from their country of origin. Other items that are considered to be less vulnerable may be imported on the basis of a simple statement by the importer.  An electronic database will be set up by the EU Commission and made accessible by all national entities in the EU.

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The Regulation will also allow for the safe storage of cultural goods (in a safe haven in the EU) and the import of art works for educational purposes without the need for a licence.

From 28 December 2020 the only part of the Regulation that will actually be in force is Article 3(1) which says that ‘the introduction of cultural goods referred to in Part A of the Annex which were removed from the territory of the country where they were created or discovered in breach of the laws and regulations of that country shall be prohibited.’  The remaining parts of the Regulation become operational from the date upon which the electronic system to monitor the imports become operational or at the latest from 28 June 2025.

Some reports from the art market say that the market will be crippled by the new Regulation as the documentation requirements will not be able to be met by many of the importers of ancient objects in circulation today. These objects have often passed from hand to hand over the centuries most importers will not necessarily have any idea whether an object was originally legally exported from its country of origin.

Should Brexit actually happen and should the UK leave the EU it is not clear how far (if at all) the UK will be bound by the Regulation. Many of the articles of the Regulation are not yet operational and may not be operational after the UK leaves the EU. The European Union (Withdrawal) Act 2018 legislates for EU derived domestic legislation (which includes EU Regulations) to continue to have effect on and after exit day so far as that legislation is ‘operative’ before exit day.

As there will be a delay in the operational status of parts of the Regulation it is not clear whether importers will be able to import objects from outside the EU into the UK without the Regulation (which could be the biggest reform in the movement of art in Europe), applying but perhaps not to the detriment of UK business. Perhaps this might one day apply on the export of a ‘Boris Bus’ (bendy or otherwise) should there ever be doubt, in the future, regarding provenance.

Catherine Pugsley is a senior associate at boutique private wealth law firm Maurice Turnor Gardner LLP 

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