Germany announces a major reform of the process aimed at resolving claims to Nazi-looted art

Currently, in Germany, the former owner (or their heirs) of cultural property lost during the Nazi-era as a result of racial persecution cannot compel the German museum in possession of that artwork to submit the dispute to the advisory commission for looted art known as the Beratende Kommission NS-Raubgut.  This means that if the German museum relies on the German statute of limitation to reject the claim on the grounds that it is out of time as a matter of law, the heirs of former owners cannot recover the artwork in Germany. 

On 13 March 2024, the German Federal government, the States and Local Governments had announced the intention to replace the Beratende Kommission with an arbitration court. At the end of last week, they announced that agreement was reached over the Arbitration Rules, paving the way to claims being heard by the new Arbitration Court for Nazi Looted Property, starting in 2025.  This means that when a claim is made to artworks in a public museum and the heirs of the former owner and the museum cannot reach a negotiated agreement, the claimant will be able to bring the claim to the new Arbitration Court, and the museum will have no choice but to submit to the jurisdiction of the Court. 

Further, in contrast to the powers of the Beratende Kommission, which are merely advisory, the Court’s awards will be enforceable.

Whilst the recommendations of the Advisory Commission were generally followed by the parties to the dispute, that was not always the case.  In December 2016, the Commission issued a recommendation that the Franz Hofmann and Sophie Hagemann Foundation pay EUR 100,000 to the heirs of Felix Hildesheimer as compensation for a Guarneri violin in the Foundation’s possession. At the time, the recommendation was accepted by both parties as a fair and just solution. However, the Foundation did not make payment.  The Advisory Commission publicly lambasted the Foundation, but that was all it could do.  The new arbitration process is designed to avoid this type of situation by making the rulings of the Arbitration Court enforceable through the German courts.

The arbitrators appointed to the new Court will be selected in parity between German governmental levels, the Conference on Jewish Material Claims Against Germany (Claims Conference) and the Central Council of Jews in Germany (Zentralrat der Juden in Deutschland).

The German Lost Art Foundation (Deutsches Zentrum Kulturgutverluste) will serve as the secretariat of the Arbitration Court and look after administrative matters. The Foundation currently performs that role for the Advisory Commission. It also manages two databases.  The Lost Art Database lists cultural property taken from owners persecuted by the Nazis between 1933 and 1945 and it has become an essential instrument of due diligence prior to acquiring any artwork that could have been looted during the Nazi era.  Proveana is a database for provenance research mainly dedicated to presenting the outcomes of research projects funded by the Foundation.

Access to the Arbitration Court will be free of charge both for claimants and public museums, however, the parties will be liable for their own costs including legal fees.

The arbitral process will be reviewed after three years or after the tenth arbitral award.

The German Minister of State for Culture Claudia Roth said: "With today's decision, we are improving the implementation of the Washington Principles in Germany and drawing important conclusions from the best practices published in March 2024. Above all, we are strengthening the involvement of victims and their descendants of Nazi-looted property in the decision-making body and are now making it possible to appeal one-sidedly. This will improve, simplify and accelerate the return of Nazi-confiscated property”.

In their press release, the German Ministry of Culture stated that: “[The Arbitration Court] is also open to claims against private individuals, provided that they join the arbitration proceedings”.  This suggests that a claimant might not be able to compel private collectors to submit to the jurisdiction of the Arbitration Court. 

The new arbitral process is undoubtedly a step in the right direction, however, the German statute of limitation and the principle of acquisitive prescription remain a significant obstacle to restitution.  Lobbying is ongoing to persuade Germany to amend its statute of limitation to allow claims to Nazi-looted art despite the passage of so many years since the end of the Nazi regime.  It is essential, if the law is changed, to maintain an appropriate balance between the interests of former owners and those of current owners who bought artworks in good faith.  Allowing the pendulum to swing too far in one direction would not be in anyone's interest. 

Photo: Harding, George Matthews. From the Open Access collection of the Smithsonian Museum.