EU Regulation 2019/880 on the importation of cultural goods – The EU Commission Q&A

The Q&A is prefaced as follows: “The present collection of questions and answers aims to inform and raise awareness among stakeholders about the EU legislation on the import of cultural goods. Any case examples given are purely fictional, and any views expressed are not legally binding. Only the European Court of Justice is competent to deliver a binding interpretation of Union legislation”. Whilst this is correct, the Commission’s interpretation of EU legislation carries significant weight. 

The Q&A is in two parts.  In this blog, we focus on the second part of the Q&A, namely three hypothetical case scenarios and the Commission’s commentary on these scenarios. We address issues that, in our view, are likely to concern collectors and art market participants alike, not just in the EU but also outside the EU. In the next blog, we shall address the 43 questions and answers in the first part of the Q&A.

In this blog, when we refer to the “Regulations”, we mean Regulation (EU) 2019/880 of The European Parliament and of the Council of 17 April 2019 on the introduction and the import of cultural goods and Commission Implementing Regulation (EU) 2021/1079 of 24 June 2021 laying down detailed rules for implementing certain provisions of Regulation (EU) 2019/880.  [1]

1. Binding opinions by auction house specialists

The Commission envisages that, going forward, auction house specialists will need to provide written binding opinions on the provenance of objects, in their name and under their responsibility, rather than as an employee of the auction house.  Is that realistic?

Scenario 1 reads as follows: “We are an auction house and our client is a French resident who has just inherited his uncle living in Miami, Florida. Among other objects belonging to his uncle he finds a magnificent medallion of jade and he sends photos to our specialists. On the basis of these photos our specialists believe that it is a Mayan object, dating back to 250 BC – 250 AD. They estimate its value at 70 000 to 100 000 EUR. The medallion is most probably from the Izapa archaeological site in the south of Mexico, which extends along the Pacific coast down to Guatemala and Belize.”

In scenario 1, the first question is whether “an auction house expert’s opinion” can be used to establish the age or place of origin of an object covered by the Regulations, in the absence of an appraisal by an independent expert.

The answer starts encouragingly with the statement that “the opinion expressed by the auction house expert of (sic) the value, age and origin of the object would be in principle sufficient”.  It then goes on to subject that opinion to a condition; according to the Q&A, the opinion must be “formal enough to engage the responsibility of its author, i.e. it needs to be signed in his own name, not as an employee representing the auction house. Unless there are reasonable doubts about its conclusions, there should be no need for an independent expertise”.  

First, like all service providers, art market professionals are unlikely to be willing to express a formal opinion engaging their responsibility without being paid for that opinion.  

Secondly, if an auction house specialist is consulted about a potential consignment, they will express their opinion as an employee of the auction house, not in their name.  Will auction houses allow their specialists to express opinions in their name in relation to lots being considered for consignment to the auction house, and charge personally for that service?  That’s unlikely. 

Thirdly, there is an insurance issue.  Auction house specialists are covered by the insurance policy of the auction house.  If they start giving opinions in their own name, they will want insurance.  Will auction house specialists start buying insurance to cover the risk involved in providing formal opinions on the provenance of objects covered by the Regulations?  That’s unlikely. 

To conclude, it seems that independent expertise, in fact, will be required.  This will take time and there will be a cost.

2. Cultural property for which the country of origin cannot be reliably identified

There is a serious issue where the country of origin of an object cannot be identified.  It concerns the so-called General Prohibition, in force since 2020, found under Article 3(1) of Regulation (EU) 2019/880.  It reads: “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”.

We have seen that the Regulations provide for a derogation when the country where the object was created or discovered cannot be reliably determined.  In that case, the importer is allowed to demonstrate instead the licit export from the last country where the object was located for at least five years.

In scenario 1, question 4, the Commission considers a situation in which “the country of creation and/or discovery cannot be reliably determined”.  The Commission comments as follows: “the applicant may benefit from the derogation permitting to consider as ‘country of interest’ the last country where the good remained for more than 5 years, from which the licit export must be proven”.  It then goes on: “With regard to the general prohibition rule that is already in force, it is irrelevant whether an expert from the auction house could substantiate that the country of creation and/or discovery cannot be reliably determined (our emphasis), as the exemption of ‘the last country where the good was located for +5 years’ applies only in the context of an application for an import licence. In principle, based on the general prohibition rule, customs or other law enforcement authorities are required to intervene and take all appropriate measures when they receive intelligence that a cultural good on its way to or already in the Union has been illegally exported from its country or origin […]”. 

 “Appropriate measures” means confiscation and sale, or destruction. 

In other words, where (i) the country of creation or discovery to the object cannot be reliably identified, and (ii) the importer relied on the derogation to import the object in the EU by demonstrating that it was lawfully exported from the last country in which the object was located for at least five years, EU law enforcement can confiscate the object under the General Prohibition once it is on EU soil even though the country of origin cannot be identified, accordingly it is not possible to prove that it was lawfully exported from the country of origin.

The Commission confirms that this is their view when answering question 6 of Scenario 1.  The assumption remains that the country of creation or discovery of the object cannot be reliably identified.  In that case, the importer, says the Commission, can rely on the derogation in the Regulation by providing evidence of lawful export from the last country in which the object was located for at least 5 years.  In this example, that country is the USA because the scenario assumes that the importer inherited the object from an uncle who lived in Miami, Florida.  However, the Commission adds: “[..] in the context of the general prohibition rule, the only reference to determine legal provenance would be the country of creation and/or discovery, as the exemption in the case where the country of creation/discovery cannot be reliably determined only applies in the context of import licence applications. If that country cannot be reliably determined, the legal export from there cannot be determined either and the French authorities may prohibit out of caution the introduction of the object into the Union”. 

Now the Commission is telling us that, whilst a derogation is available for the category of objects for which the country of origin cannot be established, the EU competent authority can deny the importation of an object in that category because the country of origin cannot be established.    Yet that was the point of the derogation.  We are going round in circles.   In practice, the Commission is saying that there is a derogation but do not be surprised if you cannot rely on it in situations it was designed to address and, even if you can rely on it, and the object finds itself on EU soil, it can be confiscated because its presence in the EU is illegal under the General Prohibition, despite it having been granted an EU import license or an importer statement was lawfully submitted.   This is beyond absurd.

The regulation gives with one hand and takes away with the other, creating a potential legal paradox that could leave collectors and dealers in a constant state of uncertainty.

3. Classification of cultural goods

An object may fall within more than one category of cultural property in Part B and Part C of the annex of Regulation (EU) 2019/880.  Alternatively, the object may not be covered by either Part B or Part C, for example items of furniture are covered by Part A (the General Prohibition) but not by Part B (the object needs an import license) or Part C (the importer must file an importer statement), unless the item of furniture is an archaeological object, it is related to history or it is of ethnological interest. 

In scenario 2, the Commission give the example of a Yangcai porcelain dish from China, attributed to the Qing dynasty, most probably from the Qianlong era (1736-1795), according to specialists. The value of this rare object is estimated at 150 000 – 200 000 euro. 

The Commission asserts that the dish qualifies as an ‘object of artistic interest’, accordingly, the importer must file an importer statement.  Yet the dish does not fall within any of the four categories of “objects of artistic interest” in Part C (g).  If other objects than those listed qualify as “objects of artistic interest”, the Regulation is silent as to their value and age threshold.  Does this mean that such other “objects of artistic interest” require an importer statement irrespective of age and value?  That would make them an exceptional category.  Recital 10 of the Regulation reads: “In order not to disproportionately impede trade in cultural goods across the Union’s external border, this Regulation should only apply to cultural goods above a certain age limit, which is established by this Regulation. It also seems appropriate to set a financial threshold in order to exclude cultural goods of lower value from the application of the conditions and procedures for import into the customs territory of the Union. Those thresholds will ensure that the measures provided for in this Regulation focus on those cultural goods most likely to be targeted by pillagers in conflict areas, without excluding other goods the control of which is necessary for ensuring the protection of cultural heritage”.  The Recital would have referred to this exceptional category if the intention was to create it.  For that reason, we do not think that it is right to call a Chinese dish “object of artistic interest” as defined in Part C (g) of the Regulation. 

Whilst a Yangcai porcelain dish from the Qianlong era was most likely not created for practical use, what about antique porcelain pieces that were once utilitarian but have become highly valuable due to factors such as age, rarity, condition, provenance, and decorative features?  Do they fall within the category of “objects of artistic interest” simply because they are attractive and valuable and today, they probably would not be used on the dinner table except by the uber wealthy?  If they fall in the category of “objects of artistic interest”, they require an importer statement if they are more than 200 years old and their value exceeds 18,000 EUR.  Or are they “articles of furniture” which can be imported without either an import license or an importer statement?  The Commission has not yet answered that question. 

Our second blog on the Commission's Questions & Answers will be published soon.