€18000 threshold

EU rules on cultural goods add a whole new world of complication...

New regulations on importing cultural goods are looming and could mean significant challenges for the trade, writes Ivan Macquisten. On June 28, a major change comes to the international art and antiques market. The European Union will enforce its new import licensing regulation (Regulation (EU 2019/880), imposing significant challenges on many people importing cultural goods into the EU. This will impact sales to the EU from the UK, US, and Far East as a result. The law will not affect everyone; it will not apply to anything that originated in the EU, nor to anything under 200 years old, for example – but for those who will have to navigate its terms, the effects are likely to prove far-reaching.

It’s worth bearing in mind that the regulation will include more cultural goods within its scope as the years pass. While this year it captures objects dating from 1825 (or 1775 for certain categories of objects), in 20 years’ time, it will capture objects dating to 1845 and so on. The regulation passed into law in 2019, aiming to prevent stolen or trafficked items from entering the EU, particularly objects that might have helped fund terrorism. Art and antiques market representatives have been negotiating with the European Commission (EC) for years over how to interpret the regulation’s requirements. The EC has issued several guidance papers, but significant questions remain.

Challenges under the regulation

In summary, the chief challenges are as follows:

Permission for import may often require applicants to provide what may often be non-existent evidence to prove the legal export from the country in which a cultural object was created or discovered.
Standards of proof way above the norm.
Exposure of the individual importer to unreasonable legal risk.
Uncertainty over related delays.
Uncertainty over related costs, all of which must be borne by the importer regardless of their cause.
Only the EU-based owner of the goods may complete the process.

Pinch points

These arise at various stages of the process, leading to challenges such as (but not limited to) the following:
Those selling goods in scope to private buyers in the EU must ask themselves: how likely is my client to complete the import process themselves? As an importer, how do I apply for an EU EORI (Economic Operators Registration and Identification) number, the essential first step? Without an EU EORI number, the potential importer will not be able to register with ICG and embark on the application process. The importing owner must sign a declaration taking legal liability (on pain of criminal prosecution) for the veracity of documents associated with the cultural good they wish to import. This includes responsibility for any information relating to previous owners, even where they have no means of checking that those documents are accurate (which will be the case most of the time).

How will an importer know which historic export laws apply to the object they wish to import to the EU when no comprehensive database of such laws exists? Wider issues surround goods that are currently imported under Temporary Admission rules for events such as fairs. If sold to an EU buyer, they must undergo the complete import process anyway.

Recent advice from the EC acknowledges that sensitive personal data about previous owners protected by EU GDPR rules would remain confidential but will still have to be included in the submission. However, if that information is not available because, in keeping with GDPR requirements, it has not been passed on during earlier transactions, it will not be available to pass on during the current import process.

Import Licence

The importer (owner) must sign a legal declaration that the item in question was legally exported from its country of origin under the local law of the time, whenever that was. This means that the importer must know which country was the country of origin when the original export took place and what the local law was at the time (or that none existed). The likelihood of the owner knowing this in the case of objects that have been circulating in the market for decades or longer is close to nil.

Derogations

Fortunately, there are derogations that recognize this challenge. Firstly, if the country of origin cannot be identified, the owner may provide proof that the item in question was exported in accordance with the laws and regulations of the last country where it was located for an unbroken period of more than five years AND for purposes other than temporary use, transit, re-export, or transhipment. This does not have to be the country in which it is currently located. Where that country is not the present location of the item, the owner/importer must provide evidence of legal export from that country, as well as legal export from the country in which it is currently located.

The second derogation applies when the country of creation or discovery is known, but the date of original export is unknown. Again, the owner must provide proof that the item was exported in accordance with the laws and regulations of the last country where it was located for a period of more than five years AND for purposes other than temporary use, transit, re-export, or transhipment. This does not have to be the country in which it is currently located. They must also provide evidence that the item left the country in which it was created or discovered before April 24, 1972.

Categories of goods

A category of ‘high risk’ goods includes archaeological items found on land or in water, as well as elements of historical monuments. All must be over 250 years old. No value threshold applies. These items will need an import licence.

Lower risk items valued at more than €18,000 and over 200 years old, such as an 1820 British landscape or portrait, will need an importer statement. These include palaeontological objects, flora, fauna, minerals and anatomy; property relating to the history of science, technology, military and social history; antiquities, such as inscriptions, coins and engraved seals; ethnological items; objects of artistic interest, such as paintings and drawings produced entirely by hand; original works of statuary art and sculpture; original engravings, prints and lithographs; original artistic assemblages and montages; rare manuscripts and incunabula; old books, documents and publications of special interest covering historical, artistic scientific, literary and other interests, singly or in collections.

Timeframe for Import Licence application

Following the application for an import licence, customs (or the competent authority where that is different) may make multiple requests for further information within a 21-day period. For instance, customs may demand individual licences for every item or be prepared to accept group licensing for similar or identical goods. The applicant must supply that information within 40 days of the request or have their application rejected. Once the information is supplied, customs or the competent authority has 90 days to evaluate it and issue a decision. If multiple requests for additional information have been made, the 90-day period will start from the date of the final submission. In total, this can lead to a delay between application and decision to grant or refuse a licence or accept or refuse an Importer Statement of 21 + 40 + 90 days = 151 days, or approximately five months.