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Immunity from Seizure Study

Anna O’Connell1

1 In-house solicitor, the Art Loss Register. The report is commissioned by Ronald Lauder, Chairman Emeritus of the Museum of

Modern Art in New York and prepared for the Ameurus Conference arranged by the Club of Three and being held in London on 30th

September 2005.

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Table of Contents

1. Introduction 2. Purpose and scope of the report 3. A history of Immunity from Seizure legislation 4. Developments in recent US cases 5. The impact on loans of art work in certain countries in the absence of

Immunity from Seizure legislation, including a review of other limited forms of protection from seizure.

6. Observations of the author 7. Appendices:

• US Federal Act 22 USC s. 2459 (Public law 89-259) • New York Exemption from Seizure Law, Arts and Cultural Affairs

Law (ACAL), section 12.03

• France: Loi No. 94-679 of the 8th August 1994, Art. 61

• Texas Exemption statute: Civil Practice and Remedies Code Subchapter E, s61.081 (excerpt)

• Germany: Act on the implementation of the European Community

Directive on the Return of Cultural Objects Unlawfully Removed from the Territory of a Member State and on the Amendment of the Act on the Protection of German Cultural Property against Transference (Act on Cultural Property Protection), BGBI No. 70/1998 (excerpt)

• Ontario: Foreign Cultural Objects Immunity from Sei zure Act, 1978,

c.75 (excerpt)

• Alberta: Foreign Cultural Property Immunity, 1985, R.S.A 2000, c-F-17, s2(1) (excerpt)

• British Columbia: the Court Order Enforcement Act, c. 78, s. 72

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(excerpt)

• Quebec: R.S.Q. Chapter C-25, Code of Civil Procedure, s. 553.1 (excerpt)

• Manitoba: Foreign Cultural Property Immunity from S eizure Act,

1976, c.F170 (excerpt)

• Belgium: the Programme Law of the 24th December 2002 (excerpt)

• Switzerland: Federal Act on the International Transfer of Cultural Property (Cultural Property Transfer Act, CPTA) (excerpt)

• 1993 European Union Directive on the Return of Cultural Objects

Illegally Removed from the Territory of a Member State No. 93/7/EEC (OJ No. L74/74 March 1993)

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Introduction

“Museums have a long tradition of sharing the cultural heritage in their custody with other museums and institutions. To lend objects to other museums both in

the same country and abroad is considered one of their most important tasks. To have the opportunity to borrow from other museums is crucial for large and small

museums alike”2. In the early years of the 21st century temporary exhibitions have become the lifeblood of the international museum community. While very popular with the public, they are an efficient means for museums to fulfil their duty to educate and a significant source of income. Works of art are thus constantly on the move between countries and continents as loan exhibitions are mounted, passed from museum to museum, and dismantled again. With legal disputes over the ownership of works of art also on the rise, particularly as a result of Holocaust claims, the issue of Immunity from Seizure for travelling works of art has become a central concern for museums. Immunity From Seizure statutes are legal instruments which facilitate the lending of artworks for temporary exhibition by guaranteeing that they cannot be seized by the courts when on loan to an exhibition abroad. The purpose of such statutes is to overcome the reluctance of lenders to send their works of art into a foreign jurisdiction where they might be subject to some form of judicial seizure. Aside from theft or damage to an artwork on loan, the emergence of an unsuspected claimant during the loan period is probably the situation most feared by both lenders and borrowers alike3. There are many situations in which this might happen. For example, a museum in Eastern Europe that loaned a painting acquired as part of German war reparations after the Second World War to a museum in a jurisdiction where the descendants of a former owner were now resident, would be at risk of a potential claim for seizure. Or consider the hypothetical case of a Moscow based owner of an icon who happens to be engaged in a contractual dispute on a general business matter with a California based firm. He would be well advised not to send his icon into the US, without some special protection, lest his business partner demand its seizure by the courts to satisfy a debt.

2 “Lending to Europe”, page 2, a report produced by an independent group of experts set up by EU Council Resolution 13839/04

under the chairmanship of Ronald de Leeuw, Director General of the Rijksmuseum in Amsterdam, to advise on facilitating European

collection mobility. Based on the findings of an expert study surveying national systems of public indemnity guarantees relating to

exhibitions in 31 European countries and on the outcome of the “Collections on the Move conference”, the Council Presidency set up

a working group of museum experts, under the chairmanship of Ronald de Leeuw, to advise on facilitating European collection

mobility. Immunity from seizure is one of five areas identified by the group as either conducive or obstructive to museum collection

mobility. The author is advised that the issue of immunity from seizure will be studied by the group in detail during Finland’s

Presidency of the European Union which begins on 1st July 2006.

3 Alexander Kaplan, “The need for statutory protection from seizure for art exhibitions: the Egon Schiele seizures and the implications

for major museum exhibitions”, page 701, Journal of Law and Policy

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A museum’s success in presenting first class exhibitions on a consistent basis is dependent in part on its ability to provide assurances to art lenders that their works will be safely returned. Those in favour of Immunity from Seizure legislation argue that if a borrowing museum is unable to give lenders a firm guarantee against seizure, the likelihood of the museum in question receiving loans of artwork for exhibitions is greatly reduced. In the absence of legal protection from seizure, long-time owners of artworks will not want to risk a rival claim of ownership and the resulting seizure by the authorities of a foreign jurisdiction and may refrain from loaning artworks. Ironically, if museums reduce the number of temporary loans they send abroad out of fear of seizure, potential claimants may also lose an opportunity to learn the whereabouts of a work of art that may have been lost or stolen from one of their ancestors4. The principle of Immunity from Seizure is not without controversy, particularly given the widespread uncertainty over the rightful ownership of artwork that was displaced in the period from 1933 to 1945 and is now held by both museums and private collectors. It raises important moral, ethical as well as political, commercial and legal issues. Is justice more important than the public’s right to the enjoyment of a cultural object? Do anti-seizure statutes run against the grain of justice by impairing the fair and speedy settlement of claims from Holocaust survivors and their families? Are Immunity from Seizure statutes in conflict with, if not the letter, at least the spirit of a number of other legal instruments either adopted or having force in the jurisdictions in which they operate? In making a claimant’s recovery efforts more difficult, do they offend human rights legislation (such as the right to peaceful enjoyment of one’s possessions and freedom from deprivation)5? How should we resolve the apparent contradiction between Immunity from Seizure statutes and the UNIDROIT Convention6 whose basic philosophy is laid out in Article 3 “The possessor of a cultural object which had been stolen shall return it’. In other words, should the public’s right to view a piece of art be postponed when necessary, such as when litigation is underway to achieve justice for victims of theft of looting and or their heirs? In summary, how do we balance the ownership rights of the citizen against the right of the public to have unhindered access to enjoyment of art, stolen or not?

4 Alexander Kaplan, “The need for statutory protection from seizure for art exhibitions: the Egon Schiele seizures and the

implications for major museum exhibitions”, page 728, Journal of Law and Policy 5 Norman Palmer, Museums and the Holocaust, page 48

6 The Unidroit Convention on Stolen or Illegally Exported Cultural Objects

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Purpose and scope of the report

Purpose The purpose of the report is to evaluate, on the basis of international comparisons, the issues to be considered in relation to the introduction of fair and effective Immunity from Seizure legislation in respect of incoming loans of artworks intended for temporary exhibition in countries where no such legislation exists, notably the United Kingdom. Scope This study looks at the impact of either the existence or absence of legislation granting Immunity from Seizure to museums and galleries against third party claims. In doing this, the study sets out to:

• Identify those jurisdictions that provide Immunity from Seizure legislation and summarise the main provisions of such protection;

• Review and compare the operation of Immunity from Seizure legislation in

different jurisdictions;

• Study the impact on loans of art works in countries that do not have Immunity from Seizure laws and examine any alternatives.

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A History of Immunity from Seizure Legislation US Federal Law The United States was the first country to introduce Immunity from Seizure protection in 19657. Interestingly, the objective of the legislation was not to address the problem of Holocaust related claims - this issue was simply not anticipated at the time. Rather, the federal immunity statute sought to protect against a creditor acquiring jurisdiction in a dispute concerning a matter other than a work of art – an unpaid debt for example. Briefly, the statute covers any work of art or other object of cultural significance (which would include religious artefacts and various craft products) borrowed from outside the United States only and either publicly or privately owned. The legislation requires an application to be made to the General Counsel of the United States Information Agency (USIA) several months before the date of entry of the artwork into the country8 and the USIA must find that the temporary exhibition is in the national interest9. Failure to meet these requirements is fatal. In 1979, following the overthrow of the Shah of Iran, creditors of the Iranian government were successful in obtaining attachment orders over five sculptures by Jean Dubuffet and a painting by Willem de Kooning belonging to the Tehran Museum of Contemporary Art and then on display at the National Gallery of Art in Washington. The protection of the Immunity from Seizure statute was not available since the Museum of Tehran had purchased these Dubuffet sculptures after they had already entered the United States and subsequently agreed to lend them to the National Gallery10. 7 US Federal Act 22 USC s. 2459 (Public law 89-259), approved 10/19/65

8 Usually 6 months before the date of entry. The application must include a schedule of all the items being imported for exhibition, a

copy of the lending agreement, a list of the places and dates of exhibition, the date the objects will arrive in the United States, a

statement that the exhibition is being administered without profit, a statement giving information as to why anyone might want to

attach the property in the United States, an evaluation of the threat and a statement establishing the cultural significance of the objects.

Admission and similar fees that merely cover costs usually do not disqualify the exhibition for immunity declaration. Sale of books

and other products associated with the exhibition are not factored into any determination of profit. However, if a foreign lender

demands a substantial sum over and above costs, this might be questionable. The applicant for immunity must certify that it has

conducted responsible, reasonable professional research into the provenance of cultural objects and that there are no competing claims

of ownership to the objects. Should the applicant have reason to know of competing claims, it is required to identify them. The

borrower must also show that the US participants are cultural or educational organisations (a citation of the organisation’s internal

revenue code is sufficient).

9 This is determined in consultation with the Assistant Legal Advisor for Public Diplomacy. Prior to 1st October 1999, the USIA was

required to consult with the U.S. Department of State on the question of whether the temporary exhibition in the United States was in

the national interest. Now, the Assistant Legal Advisor for Public Diplomacy receives and reviews the request, in consultation with

the State Department Regional Bureau and prepares a determination for the Under Secretary of State for Public Diplomacy of the U.S.

State Department, per R.Wallace Stuart, Assistant Legal Advisor for Public Diplomacy, Claims for the Restitution of Looted Art, page

185

10 Art Law, page 447, Feldman and Weil

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When Soviet troops invaded Afghanistan in 1980, the USIA refused to grant immunity to objects due to be borrowed from the Hermitage Museum in Leningrad for an exhibition at the National Gallery in Washington. Presumably reflecting the fraught state of US-Soviet relations at that time, the agency found that the presentation of the exhibition would not be in the national interest. The Hermitage Museum, without the protection of immunity, immediately cancelled the loans11. New York State In 1968, three years after the adoption of the Federal Act, New York State enacted its own Immunity from Seizure statute12. The rationale for introducing the new statute was partly the attachment, in the mid 1960s, by the Marlborough-Gerson Gallery in New York City of a group of sculptures by the artist Naum Gabo, a resident of Connecticut with whom the gallery was engaged in a contractual dispute. The sculptures were in a one-man exhibition of the artist’s work at the Albright-Knox Art Gallery in Buffalo, New York at the time of the attachment13. The statute was aimed to be used as an effective shield against harassment and help New York to obtain many loans that would otherwise have been denied. The protection afforded by the New York statute is in some respects broader and in other respects narrower than its federal counterpart. It is broader to the extent that it provides automatic protection without the need for a formal application to an administrative body. Most importantly, it applies to loans from other institutions within the United States as well as to loans from foreign countries as covered by the federal statute. This is a critical distinction because the vast majority of artwork loaned to American museums for exhibitions14 comes from lenders within the United States. Unlike the Federal statute, there is no determination of cultural significance and national interest. The New York statute can be said to be narrower in so far as it applies to works of fine art only15. The question of whether the New York statute would be effective against a federal order of seizure arose in 1979 when President Jimmy Carter froze all Iranian assets in the United States. Like the National Gallery in Washington, both the Herbert F Johnson Museum of Art at Cornell University and the Solomom R. Guggenheim Museum in New York City were then holding works of art lent to them by the Tehran Museum of Contemporary Art. At the same time, they each took the position that the federal executive order overrode the New York statute16.

11 Art Law, page 447, Feldman and Weil.

12 New York Exemption from Seizure Law, Arts and Cultural Affairs Law (ACAL), section 12.03

13 Art Law, page 447, Feldman and Weil.

14 Alexander Kaplan, “The need for statutory protection from seizure for art exhibitions: the Egon Schiele seizures and the

implications for major museum exhibitions”, page 710, Journal of Law and Policy

15 The Federal Immunity from Seizure Statute applies to objects of cultural significance also.

16 Art Law, page 447, Feldman and Weil

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One of the most high profile events in the history of Immunity from Seizure came in January 1998 when the New York County District Attorney (“DA”) issued a subpoena to the Museum of Modern Art in New York (“MOMA”) for the production of two paintings exhibited from 8th October 1997 to 4th January 1998. The exhibition was on loan from the Leopold Museum in Austria and was part of a three-year worldwide tour of the Austrian expressionist painter Egon Schiele. The heirs of two European Jews claimed ownership to the paintings, which they alleged were looted by the Nazis from their ancestors during the Second World War. No federal immunity protection was sought for the paintings17 and MOMA instead relied on the New York statute in their defence. The case hinged on the interpretation of the New York statute and whether it was only intended to apply to civil cases and therefore excluded criminal acts, such as theft, as falling under the jurisdiction of the law. MOMA argued to the contrary in the trial court and successfully moved to quash the subpoena18. The success was short lived however and the Appellate Division of the State of New York reversed the trial court’s ruling, finding the statute not to immunize loans seized pursuant to criminal investigations. MOMA asked the highest court, the Court of Appeals, to review the lower court’s finding and the NY State Court of Appeals quashed the Appellate Court’s ruling on finding that the New York statute applies to criminal as well as civil proceedings. Despite MOMA’s court victory, the seizure of the two paintings by the New York DA had an immediate and profound effect on the museum community. Suddenly the assurance that works would be returned was thrown into question. One month after the seizure of the Schiele paintings, two lenders backed out of an agreement to loan paintings to the museum for a Pierre Bonnard retrospective. One of the lenders wrote to the exhibition curator saying “the news of the arrest of the two Schiele paintings in your museum made me very anxious and unsure and you certainly will understand that I’m not in a position to lend you my painting under such circumstances”19. In December 1998, the French authorities decided to re-route a Monet painting away from the UK because of the lack of any “safe conduct” legislation20. The painting in question, Monet’s Waterlilies 1904, had been loaned to the “Monet in the Twentieth

17 “Considering the steps the Federal Act requires museums to undertake in order to obtain Immunity from Seizure and the narrower

scope of protection it offers, New York museums understandably found the automatic protection of New York statute more

attractive”, per Alexander Kaplan, “The need for statutory protection from seizure for art exhibitions: the Egon Schiele seizures and

the implications for major museum exhibitions”, page 710, Journal of Law and Policy 18 MOMA argued that “the success of New York’s museums in presenting first class exhibitions on a consistent basis is dependent, in

part, on their ability to provide assurances to art lenders that their works will be safely returned”, per Alexander Kaplan, “The need for

statutory protection from seizure for art exhibitions: the Egon Schiele seizures and the implications for major museum exhibitions”,

Journal of Law and Policy.

19 Judith H. Dobrzynski, “Lenders Pull two Bonnards from a Show at the Modern”, the New York Times, April 29th, 1998, Section

E; Page 1; Column 1

20 Norman Palmer, Museums and the Holocaust, page 48

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Century” exhibition at the Boston Museum of Fine Art and was due to return to the Musée des Beaux Arts at Caen via an exhibition at the Royal Academy in London21. In 2000, the New York statute was amended so that protection only applies to civil, not criminal seizures. In the words of the presiding Governor Pataki, “the legislation is intended to assist in the recovery of stolen property and help keep our promise to help New York’s Holocaust survivors and others whose property was taken from them unlawfully”. To address concerns raised by museum representatives, a sunset clause was introduced to allow the law to expire on 1st June 2002 so that the New York statute of 1968 currently applies to all civil and criminal seizures. Canada Legislative efforts in the United States to protect loaned artworks prompted the adoption of Immunity from Seizure legislation in certain other countries. Five of Canada’s thirteen provinces adopted immunity legislation in the late 1970s and early 1980s - British Columbia, Ontario, Quebec, Alberta and Manitoba. The legislation in Ontario22 and Manitoba23 is similar to the US federal statute. Immunity applies to any work of art or other object of cultural significance from a foreign country where the exhibition is held other than for profit. An application is made to the relevant Lieutenant Governor in Council who must determine that the work or object is of cultural significance and is in the interest of people of the relevant province. An Order in Council must be published in the relevant provincial gazette before the work or object is brought into the province. The Ontario and Manitoba statutes do not contain provisions similar to the provision contained in the United States Federal law that permits the United States attorney to intervene in any action involving the seizure of a work of art covered by an immunity notice. The Quebec statute24 is loosely worded and provides that works of art or historical property brought into Quebec and placed or intended to be placed on public exhibit in Québec are exempt from seizure, if the Government of Quebec declares them so, and for such time as it determines. An important distinction arises, however, in relation to protection during travel and display protection. In Ontario for example, an object is also immune while en route to an exhibition. In Quebec, the exhibition must be presented in the province of Quebec or it will not be eligible for Immunity from Seizure. This means that if art works arrive in transit to Ottawa (Ontario) at Montreal airport (Quebec) just one hour away , they are not 21 The painting had been in the collection of Hitler’s foreign minister, Joachim von Ribbentrop (who had selected it from the Jeu de

Paume museum in Paris) and had been claimed by the heirs of its owner Paul Rosenberg and registered on the Art Loss Register as a

stolen work by his daughter and widowed daughter-in-law. Through the Art Loss Register, the painting was eventually returned to the

Rosenberg family in April 1999, per Sarah Jackson, Historic Claims Director, the Art Loss Register 22 Foreign Cultural Objects Immunity from Seizure Act, (1978) c.75

23 Foreign Cultural Property Immunity from Seizure Act, (1976), c.F140, s.1

24 Code of Civil Procedure, R.S.Q., chapter C-25

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covered while in the airport or en route to Ontario. The curators of Ontario museums have to bear this in mind in their exhibition planning. They therefore will bring artworks into Toronto (4 hours drive away, but in Ontario) if there are no suitable direct cargo flights into Ottawa, in order to maintain full immunity protection while in Canada25. The Alberta statute26, unlike the other Immunity statutes contains a detailed definition of “cultural property”. A work must fit within at least one of thirteen categories of objects described in the statute to be considered “cultural property” and to be eligible for protection under the statute. The Alberta statute is significantly broader than the other immunity statutes in that it offers coverage to objects that are brought into Alberta for use in research and need not be on display or exhibition. As with the laws in Ontario and Manitoba, a determination must be made for coverage against seizure to exist. However, only one determination (not two) must be made, namely, that the property is of cultural significance. The legislation in British Columbia27 exceeds the scope of the other statutes in so far as protection is automatic and precludes any proceedings for seizure as well as any proceedings for possession or for a property interest. The Vancouver Art Gallery has had only one instance where Immunity from Seizure has been raised by a potential lender28 and British Columbia museum officials advise of no challenge to their statute to date. France France was the first European country to enact immunity legislation on 8th August 199429. The protection is much narrower in scope than the US statutes and is clearly aimed at applying to a limited number of cases. It limits coverage to works that are publicly owned and loaned to French public entities. As such, the law does not appear to cover loans made by private lenders to the French State or loans made by public lenders to a private borrower in France. It was instituted following an attempt by a French national to seize paintings loaned by Russian national museums to an Henri Matisse exhibition at the Centre Georges Pompidou in Paris, in order to determine ownership30. The law may also have been introduced as a result of non-French lenders withholding 25 Karen Colby-Stothart, Chief, Exhibitions Management, National Gallery of Canada, Ottawa, Ontario.

26 Foreign Cultural Property Immunity, 1985, R.S.A. 2000, c.f-17, s. 2(1)

27 The Court Order Enforcement Act, c. 78, s. 72

28 An upcoming Picasso exhibit in Autumn 2005, per Jenny Wilson, Registrar Exhibitions and Loans, Vancouver Art Gallery,

Vancouver, British Columbia.

29 Loi no. 94-679 of the 8th August 1994, Article 61

30 The Pompidou exhibition borrowed 21 works from the Pushkin and Hermitage museums. Many of the works had been confiscated

during the Russian revolution of 1917 from huge private collections of 20th century French art. The claimant of the Matisses, a

French citizen, was the daughter of Sergei Ivanovich Shchukin, a Matisse patron and one of the collectors. The French court ruled

against the claimant on the basis of sovereign immunity and that the title of the claimant’s deceased father had been revoked by a

Russian “Act of nationalisation” in 1918 under which property of Russian citizens was taken by the Russian government in

accordance with Russian law, per Alexander Kaplan “The need for statutory protection from seizure for art exhibitions: the Egon

Schiele seizures and the implications for major museum exhibitions”, page 712, note 97 and 100, Journal of Law and Policy

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two works from the Claude Monet Cathedrals exhibition at the Musée des Beaux Arts in Rouen in France in 1994 in the wake of the claim on the Matisses31.

In order to obtain protection under the French statute, an application must made by the borrowing museum in France to the Direction de Musées de France (DMF) with details of the exhibition. The DMF consults with the French Ministry of Culture and the Ministry of Foreign Affairs who issue a joint Decree which lists the protected works, determines the length of the exhibition and identifies the organisers of the exhibition32. Once granted, the Decree is published in the French Journal Officiel. The Decree has the force of a published administrative decision under French law. As such, the validity of the Decree may, like any published administrative decision, be challenged by a third party within a period of two months following publication in Journal Officiel. If no such claims are lodged, protection becomes effective upon expiry of this period. Since its adoption in 1994, the French Immunity from Seizure statute has been widely used. Most of the objects on loan from Russian museums exhibited in France since October 1994 have been protected by the French legislation as well as objects on loan from museums in Turkey, Norway, Switzerland, Macedonia, Israel, Taiwan, Poland and the United States33. French museum officials advise of no challenge to their statute to date. Interestingly, in August 1995, shortly after adopting the Immunity from Seizure statute, France implemented the 1993 EU Directive on the Return of Illegally Removed Cultural Property 34. The purpose of the Directive is to ensure the return of cultural objects (classed as “national treasures possessing artistic, historic or archaeological value”) removed from the territory of a Member State unlawfully, i.e. in breach of rules in force there or of the conditions under which temporary authorisation was granted. Only Member States may initiate proceedings with the aim of securing the return of the cultural object35. Return proceedings may not be brought more than one year after the requesting Member State becomes aware of the location of the cultural object and the identity of its holder. It is arguable that France’s immunity status conflicts with the spirit of the EU Directive in so far as it makes the return to a claimant of stolen artworks more difficult. Texas It is widely accepted that the rise in Holocaust related claims in the mid to late 1990s has

31 Alexander Kaplan, “The need for statutory protection from seizure for art exhibitions: the Egon Schiele seizures and the

implications for major museum exhibitions”, page 711, note 97, Journal of Law and Policy 32 per Sandra Calvados, Bureau du Mouvement des Oeuvres et de l’Inventaire, Department de Collections, Direction des Musees de

France.

33 Leila Anglade, Claims for the Restitution of Looted Art, page 124.

34 Norman Palmer, Art Loans, page 112. 1993 EU Directive on the Return of Cultural Objects Illegally Removed from the Territory

of a Member State No.93/7/EEC (OJ No. L74/74 March 1993.

35 Private owners of cultural objects may only bring proceedings provided for under ordinary law.

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prompted a dramatic increase in the enactment of anti-seizure statutes. On 19th June 1999 the state of Texas passed into law a statute36 which provides automatic protection for works of fine art and which became effective on 30th August 1999. In order to avoid the debate surrounding the New York statute (i.e. whether the statute applies to works which are alleged to be the subject matter of crime), the Texas statute contains an important exception which states that the general immunity does not apply if theft of the work of art from its owner is alleged and found to be proven by the court37. It is arguable that some cessations of possession might fall short of theft, such as the proffering of portable wealth as an inducement to spare its owners from punishment or privation, or the “Jew auctions”38. Federal immunity would seem a more prudent measure if an exhibition including foreign-owned, loaned art is intended to be exhibited in Texas39. Germany In 1999, the German parliament incorporated the 1993 EU Directive on the Return of Unlawfully Removed Cultural Objects into German law and included an amendment to the Act on the Protection of German Cultural Property. The new legislation allows legally binding promises to be given guaranteeing the return to the lender, on a fixed date, of foreign cultural property which is temporarily on loan for an exhibition within the Federal territory40. The German Immunity from Seizure statute is more broadly drafted than the French legislation and applies to public and private art loaned from abroad. The legislation was likely to have been prompted by a lawsuit in the German courts by Prince Hans-Adam II of Liechtenstein who claimed a painting by the seventeenth century Dutch artist Pieter van Laer, while it was on loan to a museum in Cologne in 199141. 36 Civil Practice and Remedies Code Subchapter E, s61.081. The statute provides automatic protection to works of fine art either (a)

en route to an exhibition, (b) in the possession of the exhibitor, or (c) on display as part of an exhibition. The exhibition must be held

other than for profit and for a cultural, educational or charitable purpose and under the auspices or supervision of a specified

institution.

37 Section 1(d), supra

38 Norman Palmer, Museums and the Holocaust, page 46. Prior to 1938, when the Nazis began to seize Jewish property outright, Jews

were frequently compelled to sell their treasures at auction at below true market value.

39 Per R.Wallace Stuart, Assistant Legal Advisor for Public Diplomacy, Claims for the Restitution of Looted Art, p. 189. The

statutory text leaves many questions unanswered: What is “fine art” and who decides? What is en route to an exhibition?

40 Act on the implementation of the European Community Directive on the Return of Cultural Objects Unlawfully Removed from the

Territory of a Member State and on the Amendment of the Act on the Protection of German Cultural Property Against Transference

(Act on Cultural Property Protection), BGBI No. 70/1998. An application is made by the borrowing museum to the highest provincial

(Länder) authority to provide a legally binding return promise to the lender confirming the return of the object on a specific date. The

provincial authority in agreement with the Federal Government ministry for Culture and Media provides the return promise and once

given, no civil rights of third parties in relation to the work can be upheld over the lender’s claim for its return. Until such return,

court proceedings for restitution, arrest, levies of execution and seizures are inadmissible. Return promises, once given, are

irrevocable. The author is advised by the Chairwoman of the Museum’s Registrars that the time for processing an application for

immunity protection can be as long as three months and as short as three weeks.

41 The German courts, in all instances, refused to entertain the claim, and the European Court of Human Rights also dismissed the

claim that challenged the German decisions. The German courts found the Convention on the Settlement of Matters Arising out of the

War and the Occupation (“Settlement Convention”) to govern the matter. Under Article 3 of Chapter Six of the Settlement

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As with the French Immunity from Seizure statute, the German legislation which at first sight appears to run counter to the 1993 EU Directive will be upheld in any claim42. If for instance, a cultural object is illegally exported from Italy to Austria and then lent to Germany, Italy cannot claim the object during its exhibition in Germany but only once its return to Austria, an EU member state, in this case relying on the EU Directive. If on the other hand, the object is illegally exported from Italy to the US and temporarily on loan to Germany, the item cannot be touched either during the exhibition in Germany or after its return to the US43. Belgium In 2002, Belgium introduced a very narrowly worded Immunity from Seizure statute which applies to a limited number of specified institutions, including the Belgian Institute of Natural Sciences, the Royal Museum of Fine Art, the Royal Museum of Central Africa, the Royal Institute of Meteorology and the Royal Museum of Art and History44. Protection is automatic and applies to cultural objects loaned from a foreign State, a public collection or foreign cultural institution subject to the proviso that the borrowing museum provides the relevant ministry with a list of the objects on loan. Belgian government officials45 advise of no challenge to their statute to date. Switzerland Switzerland adopted anti-seizure legislation as recently as 1st June 200546. The new law allows a Swiss borrowing institution to make a formal application for a return guarantee during the period of an exhibition. The application must be submitted at least 3 months Convention, which entered into force on May 5, 1955, Germany was barred from raising objections against measures that were

“carried out with regard to German external assets or other property, seized for the purpose of reparation or restitution… concluded, or

to be concluded, by the Three Powers with other Allied countries.” Moreover, paragraph 3 of Article 3 provided that “no claim or

action shall be admissible against persons who shall have acquired or transferred title to property on the basis of the measures referred

to in paragraph 1 and 2 of this Article.” On June 1, 2001, Liechtenstein filed his claim against Germany with the International Court of

Justice (“ICJ”). Liechtenstein’s application based the jurisdiction on Article 1 of the European Convention for the Peaceful Settlement

of Disputes (“European Convention”) of April 29, 1957, which entered into force between Liechtenstein and Germany on February

18, 1980. This treaty provided for all international disputes between the contracting parties to be submitted to the ICJ, except those

disputes “relating to facts or situations prior to the entry into force of this Convention as between the parties to the dispute” (Art. 27

(a) of the European Convention). Germany claimed, inter alia, that the Court lacked jurisdiction because the dispute would relate to

facts or situations prior to 1980, namely the Beneš Decrees and the Settlement Convention (in the aftermath of World War II,

Czechoslovakia, an allied country, adopted the so-called Beneš Decrees, under which certain property owned by Liechtenstein

nationals was confiscated. This confiscation included property owned by Prince Franz Josef II of Liechtenstein, the property then in

question). The ICJ upheld Germany’s objection and dismissed Liechtenstein’s claim.

42 1993 EU Directive on the Return of Cultural Objects Illegally Removed from the Territory of a Member State No.93/7/EEC (OJ

No. L74/74 March 1993

43 Erik Jayme, Professor of the University of Heidelberg, Claims for the Restitution of Looted Art, page 175

44The Programme Law of the 24th December 2002.

45 Robert van de Walle, the Belgian Federal Science Policy Office responsible for Belgian cultural heritage

46 Federal Act on the International Transfer of Cultural Property (Cultural Property Transfer Act, CPTA)

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prior to the intended import date of the cultural property into Switzerland47. A return guarantee will be issued provided (a) no one claims ownership of the cultural property through an objection, (b) the import of the cultural property is not illicit and (c) the loan agreement stipulates that the cultural property will be returned to the contracting state of origin following the conclusion of the exhibition. The Swiss legislation includes a provision similar to the French anti-seizure statute. Once an application is made it is published in the Swiss Federal Bulletin and any party may object in writing to a designated specialist body within 30 days. Failure to object precludes a claimant from taking any further action.

47 Section 4, Article 7, paragraph 1 of the Ordinance on the International Transfer of Cultural Property which accompanies the new

Act

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Developments in recent US cases

Two recent cases involving US museums have thrown the effectiveness of Immunity from Seizure statutes into doubt and jolted museums and lenders around the world. Crucially, in both cases the claimants were not seeking seizure but other forms of redress, such as a declaration of rights and damages. On 15th July 2003, a lawsuit was filed against the Los Angeles County Museum of Art (LACMA) which was exhibiting 76 paintings on loan from the State Pushkin Museum in Moscow, including 26 paintings from the Sergei Ivanovich Shchukin Collection (the “Collection”). The Collection, including works by Van Gogh, Matisse, Monet, Manet and Picasso and others, was nationalised by the Russian government in 1918. The paintings were granted Immunity from Seizure by the US State Department before they entered the United States. The claimants were not seeking seizure but rather unspecified compensation and an order barring LACMA from displaying the Shchukin paintings. The New York attorney acting for the claimant said that he did not expect the works to be returned but rather the family would like "greater recognition at the exhibition of the role played by the Shchukin family and a major explanation of the improper taking of the art from that family48." No sum was placed on the amount of compensation claimed but it was suggested that the family would like a percentage of proceeds and merchandising sales from the LACMA exhibition. The second case involves a preliminary ruling of the U.S. District Court for the District of Columbia (“the Court”) on 30th March 2005. The Court denied the motion of the City of Amsterdam (the “City”) to dismiss on jurisdictional grounds a case involving a claim by the heirs of the artist Kazimir Malewicz, to 14 paintings by the artist on loan by the City to the Guggenheim in New York and the Menil Collection in Houston. The paintings were granted immunity from seizure before they entered the United States. Most importantly, the heirs are seeking, not seizure, but a declaration of rights and damages on the basis that in 1927, the artworks had been entrusted by the artist to various friends, one of whom later sold the artworks to the Stedelijk Museum in Amsterdam. The heirs claim that this purchase was invalid and base jurisdiction on an exception to the Foreign Sovereign Immunities Act (FSIA). Under the FSIA, foreign states are not immune when (a) rights in property have been taken in violation of international law and (b) the property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state. As to the violation of international law, the City argued that domestic (Dutch) remedies must be exhausted before bringing a claim. The Court however accepted the argument of the heirs and found that due to the fact that the City contends that the statute of limitations bars the heirs’ claims in Amsterdam, the domestic remedies in the Netherlands are inadequate and therefore need not be exhausted. 48 The Art Newspaper, “Grandson of Russian Revolution victim attempts to sue LACMA”, Martha Lufkin

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Rejecting an argument proposed by the City, the Court found that, although the State Department had granted Immunity from Seizure, the artwork was present in the United States for purposes of FSIA jurisdiction. The Court held that the Federal Immunity statute provided that a claimant cannot seize the art work while present in the US and may not serve the receiving museum with any judicial process that interferes with the physical art works or their control. It was held that the claimants had done neither, they sued the City not the receiving museums and let the works return to Amsterdam49. The Court concluded that the presence in the United States of the artworks fulfilled one requirement for the FSIA jurisdiction, namely, that the contested property be present in the United States at the time of suit. The claimants were using the window of opportunity afforded by the Malewicz exhibition as the jurisdictional hook for their claims. Most importantly, the District Judge held that Immunity from Seizure is not immunity from suit for a declaration of rights or for damages arising from an alleged conversion if the other terms of the FSIA jurisdiction exist50. If the purpose of immunity statutes is to overcome the reluctance of lenders to send their works of art into a foreign jurisdiction where they may be subject to some form of seizure, these recent US lawsuits, throw into doubt whether immunity statutes are adequate in addressing these concerns. Surely lenders will be equally reluctant to lend to a jurisdiction where they may be faced with the risk of a claim for damages and compensation? A discussion on the role and effectiveness of Immunity from Seizure legislation is therefore timely in light of the controversy surrounding these cases and the strong probability that restitution claims for the return of stolen artwork in the hands of good faith purchasers will increase in the coming years.

49 “Had the lawsuit begun and concluded before the Malewicz Collection left this country, no order of the court would have or could

have affected the custody or control that the museums exercised over the artworks, per Rosemary M. Collyer, United States District

Judge in Memorandum Opinion dated 30th March 2005

50 In examining the question of commercial activity of the City by lending the artwork to the museums in the United States, the Court

reiterates that the “nature” of the activity rather than the “purpose” determine whether it falls under the commercial activity exception

of the FSIA. Finally, the Court found that the record did not permit the court to ascertain whether there were sufficient contacts to

expose the City to FSIA jurisdiction. The motion of the City, however, was denied.

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A short survey on the impact on loans of works of art in countries without

Immunity from Seizure legislation Israel The Israel Museum is in favour of introducing Immunity from Seizure protection in Israel51. The Museum has, on request, provided lenders with a letter from the Israeli Education and Culture Ministry which provides that the State of Israel and any of its agencies, organs or representatives undertakes not to confiscate or seize relevant artworks during the period of a temporary exhibition. The Museum has contacted the Israeli Justice Ministry suggesting the introduction of Immunity from Seizure laws in Israel. Holland The author is advised that the Dutch Secretary of State for Foreign Affairs can give a letter of guarantee to borrowing museums which provides that the Dutch Government will do everything that is legally within its power to ensure the return of all objects displayed on loan or that the artworks shall not be encumbered at any time while they are located in Holland52. It is acknowledged that the legal effectiveness of any such letter to bar a seizure claim is uncertain as it has not been legally challenged to date. Both lenders and borrowers do however attach considerable weight to such letters. UK The author interviewed representatives from the British Museum, the Tate, the National Gallery and the Royal Academy. The Tate advises that some lenders, both institutional and private, are concerned about lending artworks to the UK because of the lack of Immunity from Seizure legislation. The Tate has been asked in the past to arrange for the UK Department of Culture Media and Sport53 to provide a letter to the lender guaranteeing Tate’s intention to return the artwork at the end of the loan period (it is acknowledged that the legal effectiveness of any such letter to bar a seizure claim is unlikely). It is possible for Tate, in limited circumstances, to consider paying the premium for insurance taken out in the name of the lender to cover the monetary value of an artwork (and not legal costs) in the event of a third party claim. It is acknowledged however that this would very costly for the museum and would depend entirely on the quality of the artwork’s provenance history and would not safeguard the artwork from being seized. 51 Per Miriam Apfeldorf, Registrar of the Israel Museum

52 Per Astrid Weij, Advisor on International Affairs, Cultural Heritage Directorate, Netherlands Ministry of Education, Culture and

Science.

53 The Museums, Libraries and Archives Council (MLA) now carries out this task.

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In 2003, an American museum requested Immunity from Seizure in relation to a painting by Max Beckmann, which they proposed lending to Tate for a major retrospective of the artist’s work. Tate informed the American Museum that no Immunity from Seizure legislation exists in the UK and raised concerns in relation to the provenance history of the picture. The American museum eventually decided to accept the risk and agreed to lend the painting in any event. The Tate recently withdrew Constantin Brancusi’s The Kiss (1907-1908) from the first major display of the sculptor’s works in the UK because the Romanian Culture Ministry vetoed the loan to it by the Craiover Art Museum on the basis of a potential ownership claim if the work was brought to the UK. A spokesman for the Tate said “Legally, Tate is unable to provide immunity from seizure…we do not know who the possible claimant could be.”54 The British Museum and Kew Gardens found themselves at the receiving end of a third party claim recently when artefacts, including two bark etchings, a ceremonial emu and a traditional head dress made in the Murray River area by ancestors of the Dja Dja Warrung Native Title Group from Central Victoria were on loan from the British Museum to the Museum of Victoria in Melbourne to celebrate the 150th anniversary of the Museum of Victoria. The Dja Dja Warrung secured an emergency declaration order under Part IIA of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (which applies only to Victoria) preventing the return of the artefacts to Britain for 30 days and this was repeatedly extended by successive declarations. On 25th May, Mr Justice Ryan of the Federal Court of Australia held that successive emergency declarations could not be made and that the original declarations had expired. The artefacts have now returned to the British Museum and Kew Gardens. According to the UK Department of Culture, Media and Sport, there is no imminent prospect of introducing Immunity from Seizure legislation in the United Kingdom55. Russia The author interviewed the Director of the Hermitage Museum who said that the Museum is reluctant to lend to countries with no immunity protection and normally insists on letters of comfort from the Government. In one instance in the past, a UK borrower took out insurance on behalf of the Hermitage to cover the potential legal costs of a third party claim. It was difficult to obtain such insurance and very costly. Republic of Ireland There is no Immunity from Seizure protection in the Republic of Ireland56. The National 54 John Ezard, Guardian newspaper, January 27th, 2004

55 Head of Cultural Property Unit, Department of Culture, Media and Sport

56 The National Monuments (Amendment) Act 1994 s.5(12) provides however that the normal reporting duties which are imposed on

those who have archaeological objects in their possession or control do not apply to archaeological objects which: (I) have been

imported into the State, (ii) for a period not exceeding two years, (iii) for purposes of exhibition, research or restoration, (iv) in

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Gallery of Ireland57 advises the author that the issue has not been raised by lenders although a work on loan to the Gallery from the United States was seized two years ago and has since been returned to its original owner. The Gallery advises that they have had no experience of letters of comfort being provided by either the Director of the Gallery or the Irish Ministry for Arts Heritage and Tourism in respect of incoming loans. Australia The 1986 Protection of Movable Cultural Heritage Act provides for the giving of a certificate enabling an Australian protected object to be exported after it has been imported into Australia for temporary purposes or in circumstances in which the proposed importer may subsequently wish to export it. The certificates are issued by the Australian Department of Environment and Heritage and permit import/export without violation of the 1986 Act58. The 1986 Act does not provide Immunity from Seizure but provides that the normal statutory provisions which dictate the forfeiture by the Australian authorities of unlawfully-imported (cultural) objects of foreign countries do not apply in relation to the importation of an object (i) if the importation takes place under an agreement between (on the one hand) the Commonwealth, a State, a Territory, a principal collecting institution of an exhibition co-ordinator and (on the other hand) any other person or body (including a government) and (ii) the agreement provides for the object to be loaned, for a period not exceeding two years, to the Commonwealth, State, Territory, principal collecting institution or exhibition co-ordinator, as the case may be, for the purpose of public exhibition in Australia59.

pursuance of an agreement between a person who is outside the State and claims to be the owner and a person in the State who intends

to exhibit, research or restore the object, and (v) provided that the terms and conditions of that agreement have been approved by the

Director of the National Museum of Ireland, failing which an agreement shall not be performed, see Norman Palmer, Art Loans, page

111

57 Fionnuala Croke, Head of Exhibitions at the National Gallery of Ireland

58 s.12 and 13 of the 1986 Protection of Movable Cultural Heritage Act

59 Norman Palmer, Art Loans, page 111, note 96

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Observations of the author

A. General Comments • Immunity from Seizure legislation has been adopted in a limited number of

jurisdictions worldwide giving museums in those jurisdictions an advantage in attracting loans of art works for exhibition.

• It is practically impossible to determine how many lenders have foregone loans of art

works to museums in jurisdictions without Immunity from Seizure legislation. However, it is likely and supported by some evidence from interviews conducted as part of this study with lenders and museums, that the current differences between national systems make it highly probable that more loans will be made to museums in countries with effective Immunity from Seizure legislation. This is particularly so for lenders from Russia, Germany and central and eastern European countries.

• At a European level there is a growing body of informed opinion to the effect that

Immunity from Seizure legislation should be introduced throughout the EU. This arises against the background of Article 151 of the EU Treaty whereby the Community is required to support non-commercial cultural exchange between Member States. In 2003, an extensive study was carried out on state indemnity systems (whereby the national state provides financial compensation directly to the lender should a borrowed object be damaged or destroyed) at the request of the European Commission. On the subject of Immunity from Seizure, the study group stated that “it is better for both borrowers and lenders to be protected from any third-party action. It therefore seems wise for each country to introduce a law ensuring immunity from seizure”60. A further report produced by an independent group of experts set up by EU Council resolution 13839/04 to make recommendations on collection mobility for European museums61, stated that EU Member States “that do not have an immunity from seizure system should develop one [and] introduce a Europe-wide legal system of immunity from seizure”. The debate on this issue within the EU could lead to the introduction of Immunity from Seizure legislation that would be applicable to all Member States.

• The recent cases in the United States, referred to on pages 17 and 18, highlight the

fact that while Immunity from Seizure may ensure the safe return of an artwork to the lender, it doesn’t necessarily preclude a claimant filing a lawsuit for alternative relief, including damages and a declaration of rights. This undermines the purpose of Immunity from Seizure to the extent that lenders will undoubtedly be equally

60 Study No. 2003-4879: An inventory of national systems of public guarantees in 31 European countries (June 2004), Reunion des

Musees Nationaux, Etablissement Public a Caractere Industriel et Commercial (EPIC) Paris (France) in collaboration with Staatliche

Museen zu Berlin Preussischer Kulturbesitz Berlin (Germany)

61 see note 2 supra

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reluctant to lend if there is a risk of a claim for damages or otherwise62. It may be considered necessary therefore to amend Immunity from Seizure legislation so that it covers, not only seizure, but any proceedings for damages or for any proprietary interest whatsoever. If immunity from protection is extended in this way, the right of a legitimate claimant to concrete means of recovery and compensation must also be recognised and addressed.

• It is noteworthy that Immunity from Seizure legislation has been adopted in some

countries with significant Jewish interests and an advanced and progressive approach to the restitution of art looted during the Holocaust. There does not appear, however, to be any active lobbying on the part of these interest groups against the principle of Immunity from Seizure. Can the apparent acceptance of immunity statutes be explained by the fact that the potential harmful effects of immunity protection on victims of art theft are mitigated by the recent rise in interest and efforts in returning stolen artwork to its rightful owners?

B. Issues of Title • The controversy over the extent of protection provided by Immunity from Seizure

arises in the broader context of the conflict between common law and civil law jurisdictions regarding the transfer of stolen goods. Common law and civil law jurisdictions take different approaches as to whether the good faith purchaser of stolen artwork or the original owner should have the legal right to ownership. Civil law jurisdictions generally favour the good faith purchaser under a policy fostering commercial certainty, whereas the United States and other common law nations generally award the artwork to the victim of the theft63.

• European civil law nations differ in the time the good faith purchaser is required to

possess an object before he acquires title. For example, in France, the victim of the theft has three years from the date of theft in which to reclaim the stolen item from any person in whose possession he finds it. The three-year time limit runs from the date of the loss of the theft, not from the date of the good faith purchase. The position is similar under Dutch law but interestingly, in the case of an action against a bad faith possessor, the limitation period in Holland is twenty years, after which time the thief or other bad faith possessor acquires title. In Italy, the law affords protection to the good faith purchaser who acquires title immediately upon purchase.

• By contrast, in the United States, the laws of many states delay the accrual of a cause

of action out of recognition that it usually takes an owner many years to locate and make a claim for the stolen work. Some states have adopted the “discovery rule” under which the limitations period accrues when the theft victim knew or reasonably

62 Leaving aside the difficulty the claimant may have in enforcing any judgment in the jurisdiction in which the artworks have been

returned.

63 Alexander Kaplan, “The need for statutory protection from seizure for art exhibitions: the Egon Schiele seizures and the

implications for major museum exhibitions”, page 697, Journal of Law and Policy

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should have known the whereabouts of the artwork. Entitlement to the benefit of the “discovery rule” is dependant upon whether the claimant used due diligence to recover the paintings at the time of the alleged theft and thereafter. New York state has rejected the “discovery rule” in favour of the “demand and refusal rule” whereby the three-year statute of limitations accrues upon the demand and refusal to return a stolen work.

• Potential claimants have therefore more chance of pursuing a claim in the United

States than in other European jurisdictions. This problem has been addressed in the UNIDROIT Convention64 which provides for two limitation periods for the bringing of actions for the return of a stolen cultural object. The first is a short period of three years from the time when the claimant “knew the location of the cultural object and the identity of its possessor” and the second an absolute period of fifty years from the time of the theft. Because of this time limit, however, art looted during the Holocaust is not covered by the Convention.

• Given the difficulty of resolving ownership disputes that arise more than fifty years

after an event, it has been suggested that an international commission panel be established to settle disputes concerning artworks stolen during World War II65. The benefit of such a commission is the elimination of the need to quantify and prove the original owner’s efforts to look for the property and to prove that the artwork was “stolen” or the produce ownership of other documents that might be required in a court of law. The statute of limitations, the discovery rule and other miscellaneous defences would therefore not apply66.

C. How immunity from seizure legislation could be introduced in the UK • Immunity from Seizure legislation could be introduced in the UK either (i) at the

initiative of the government of the day following a government decision that such legislation was desirable or (ii) following an EU directive to introduce such legislation. There are no existing powers that would enable Immunity from Seizure to be introduced in the UK by ministerial fiat or by statutory instrument as part of

64 The origins of the UNIDROIT Convention are to be found in the 1970 UNESCO Convention on the Means of Prohibiting and

Preventing the Illicit Import, Export and Transfer of the Ownership of Cultural Property which deals with theft and illegal export

generally. The UNESCO Convention does not have a mandate in matters of national law and could not therefore resolve the

differences in private law between systems which protected the good faith purchaser and systems which held that no good title could

be transferred by a thief (as of March 2004, there are 104 signatories of the UNESCO Convention). In 1984, UNESCO asked

UNIDROIT, an independent intergovernmental organisation based in Rome with 57 Member States to examine ways of harmonising

and co-ordinating the private law of States in relation to the illicit traffic in cultural objects in order to complement the UNESCO

Convention. The UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects was opened to signature in Rome on 24th

June 1995 and 25 countries have signed the Convention to date.

65 Ralph E. Lerner “The Nazi art theft problem and the role of the museum: a proposed solution to disputes over title”, International

law and Politics, [1998], vol. 31:15, page 36

66 Ralph E. Lerner “The Nazi art theft problem and the role of the museum: a proposed solution to disputes over title”, International

law and Politics, [1998], vol. 31:15, page 37

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existing legislation. Therefore in the two instances referred to, an Act of Parliament would be required. This would involve a draft bill being introduced by the Minister for the Arts and that would then be approved by the House of Commons and House of Lords before receiving Royal Assent and becoming law. Should the EU Commission, following approval by the European Parliament and the Council of Ministers, adopt a Directive to harmonise laws on Immunity from Seizure in EU member states there would normally be a timetable setting out the date by which EU member states would have to transpose the Directive into their national laws. The Directive would have no effect in the UK until such time as the relevant Act of Parliament had been passed into law in the UK.

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