CINOA Position Paper on the EU proposal on the Import of Cultural Goods
CINOA position paper
concerning the 13 July 2017 Proposal for a regulation of the European Parliament and of the Council on the import of cultural goods
(COM (2017) 375) [SWD (2017) 262 final, SWD (2017) 263 final].
23 April 2018
CINOA is the principal international confederation of art & antique dealer associations (www.cinoa.org). Established in 1935, CINOA is the global leader in representing the international art and antiques trade, setting benchmark standards for the industry including the world-wide adoption of The CINOA Code of Ethics. Affiliated dealers – from 19 EU dealer associations representing 13 Member States plus associations from the United States, South Africa, Australia and Russia (see Annex A) – cover a wide array of specialties from antiquities to contemporary art.
CINOA actively campaigns on major issues affecting the industry, while working hard on improving standards further in the interests of best practice, transparency and consumer protection. No other industry body within the international art and antiques market offers such an extensive reach or one-stop access to the world’s first rank of trade professionals. CINOA responds proactively to dealers’ concerns and offers international support to the CINOA dealer associations. Members benefit from shared knowledge and an international network of experts on art, antiques and related matters.
Proposal will not meet its objectives
While all stakeholders will naturally support the twin objectives of cutting off terrorism finance and preventing illegal exports of cultural property, they also acknowledge the importance of proportionality and the requirement to balance the demands of law enforcement and crime prevention on the one hand, with legitimate business interests on the other. CINOA believes that the proposal will not meet its objectives, and it will have a disproportionately negative impact on the legitimate international art and antiques market.
The risks to the EU’s market for fine art and antiques
The total value of the legitimate art and antiques market in the European Union in 2016 was about €17.5 billion and the EU market provided employment for over 350,000 people. The majority are SMEs. It spent nearly €4.3 billion on ancillary services such as insurance, security, conservation, art fairs and shipping, supporting approximately 90,000 further jobs. Much of this market involves external cross-border trade. Events such as art fairs and auctions are time critical. If objects are delayed at external borders, the effect on their saleability would be serious. The proposed requirements for import licences or statements with Object ID descriptions for all items can include a 30 day administrative review period for missing documentation and potentially up to six months if temporarily retained by customs, This could create sufficient delays, even if just a few days, that would inevitably deter overseas exhibitors from attending prestigious art fairs in EU Member States and would divert exhibitors towards overseas fairs that involve less onerous procedures.
If criminals are, as is alleged, importing illicit cultural goods and are not abiding by the existing import requirements, is it realistic to think that they will apply for import licences or complete importer statements?
Underlying assumptions are inaccurate
As has consistently been stated by the European Commission and other sponsoring parties to this proposal, their primary aim is to prevent the funding of terrorism through the trafficking of cultural property.
Much of the information on which this proposal relies is inaccurate:
- A recently published independent report commissioned by the European Commission underlines the absence of recurringevidence of terrorism financing arising from transactions involving the art market within the EU.
- The Commission explained the basis of its findings in a Fact Sheet issued on July 13, 2017. Unfortunately the figures it quotes under the section titled What is the value of the cultural goods that are imported illegally to the EU? represent inaccurate speculation and are not backed by the evidence. In contrast, the latest World Customs Organisation report, among other authoritative independent sources, provides a more informed commentary and puts cultural property seizures into perspective.
- An investigation into the recent case of alleged smuggling of antiquities into the EU (Spain) that may prove to have terrorism links demonstrates that existing legislation is capable of tackling the issue. It should be noted that no other such case has arisen within the EU so far, despite ISIS and Al Qaeda operating for a number of years. It is also important to note antiquities represent less than 0.5% of the market.
A more detailed analysis is needed
- Despite the European Commission Regulatory Scrutiny Board (RSB) passing the Proposal’s Impact Assessment on the second submission, the Parliament’s Ex-Ante Impact Assessment Unit noted that the Commission had failed to address the RSB’s specific instructions: “It appears from the final version of the IA that no attempt has been made to further improve the IA according to the RSB recommendations.” The Unit concluded: “As a result, the IA still lacks the necessary depth and robustness in its analysis of the different types of impacts, on the basis of quality evidence or estimations, and does not succeed in sufficiently substantiating the choice of the preferred option.”
- Despite claiming that the proposal has “no significant implications for the budget of the European Union”, at its own admission (IMCO and INTA joint committee meeting March 21, 2018), the European Commission acknowledged it had not assessed how much time would be involved in completing the licences. Likewise we have seen no evidence that the financial impact on the EU budget and Member States’ budgets of processing tens of thousands (probably hundreds of thousands at least) of licence applications has been properly considered.
CINOA agrees there has been a lack of proper analysis, noting the enhanced risk of inappropriate and disproportionate measures that these failings bring. For the above reasons CINOA believes a full independent review is crucial, taking these points into consideration, before any further steps are taken to introduce legislation based on the proposal.
CINOA’s concerns should the proposal go ahead
- The lack of clarity in terminology
The lack of clarity in key aspects of the proposal, such as the terminology describing goods and their interaction with customs classification codes, risks creating ineffective and damaging measures, which would add considerably to the EU budget and Member States’ budgets, as well as the workload of customs authorities.
Customs codes: Customs officers, who are not art experts, will need to distinguish between the types of goods requiring an import licence and those requiring an importer statement. The most practical identification characteristic would be the customs code.
Currently code 9703 covers original sculptures and statuary, in any material; code 9705 covers collections and collectors’ pieces of archaeological, ethnographic and numismatic interest, but also of zoological, botanical, mineralogical, anatomical, palaeontological and historical interest, whilst code 9706 covers antiques of an age exceeding 100 years.
Antiquities from the Classical and pre-Classical period (which would require an import licence) could fall under any of the above three codes, the very same codes that could also be used for the antiques and works of art for which an importer statement is required.
The WCO has already highlighted the problems with this classification and its impact on effective enforcement. Until this issue is resolved we fail to see how the import system will be capable of functioning efficiently.
Documents and manuscripts: In the proposed Annex category (h) of the UNESCO Convention has been split into two new categories of cultural goods: “‘rare manuscripts and incunabula” more than 250 years old, which will require import licences, and “old books, documents and publications of special interest, singly or in collections” over 250 years old which will need an importer statement, but not an import licence. A manuscript is also a document, so into which category does an old document fall?
CINOA advises that in order for any new system to be workable both for customs authorities and for importers, these definitions should be precise and unambiguous.
‘Export countries’ and ‘source countries’: These have not been defined narrowly enough and this lack of precision gives rise to numerous risks and impractical and disproportionate demands. Should the source country or country of origin be identified as where an object was created, its final resting place or the country or perhaps person with which or whom it is now inherently associated? There are artworks in each country that form part of the national narrative whether that was their source country or not. CINOA asks for greater clarity and precision for these definitions.
- Importer statements
The importer declaration would prove costly, inequitable and counterproductive.
- Costly, because not only would another layer of bureaucracy and delay be added to the process for the art market professional or collector, but it would also be added for customs authorities.
- Inequitable, because it places an unacceptable burden of liability on the importer for an assurance concerning origin, acknowledged by the Deloitte report (page 164) as being largely beyond their power and influence. 
- Counterproductive, because such a declaration will inevitably become little more than a box-ticking exercise, which could create exactly the circumstances that the authorities wish to avoid.
- Lack of targeted focus
We believe that the proposal will act on a larger number of cultural objects than is necessary to achieve its aims. This lack of a sufficiently-targeted approach includes:
Financial thresholds: The EU’s cultural goods export licensing regime applies a range of financial thresholds to different categories of cultural property and this was designed to act as a mechanism for targeting the objects of greatest concern for Member States’ desire to preserve their patrimony. Strangely the Annex to the proposed regulation lacks equivalent financial thresholds.
Age thresholds: The choice of the age threshold of 250 years was based on federal legislation in the United States, yet these US import restrictions are limited to archaeological or ethnological material and specifically targeted at object types considered to be at risk and originating in just 17 named countries with which agreements exist. In practice therefore the vast majority of cultural objects covered by the US rules have an age far greater than 250 years. For example the agreement with Italy is restricted to pre-Classical, Classical, and Imperial Roman archaeological material, not to 18th-century Italian portraits, jewellery or furniture.
In the case of the archaeological objects that would be subject to the import licence requirements the 250 year threshold is therefore meaningless, because the age of the material covered will frequently exceed 1,000 years. Applying a US long stop of 250 years designed for archaeological and ethnographic material to the large number of non-archaeological decorative and furnishing antiques that require an importer statement is therefore illogical.
As shown above and from the conclusions of the Commission’s own consultants, the measures being proposed are insufficiently precisely targeted and will introduce a disproportionate burden on the legitimate art and antiques trade in objects which have no connection to terrorism finance or the destruction of non-EU countries’ cultural heritage. It should be borne in mind that a large proportion of cultural goods imports into the EU are of objects whose historical origin in European, and which do not therefore pose a threat to third countries’ heritage.
This lack of precision is particularly relevant to the requirement to record Object ID details in a formal importer statement for every object entering the EU that is more than 250 years old, regardless of its rarity, significance or value. It is unclear why this is necessary at all, since the 1% of cultural objects that are said to be the target of the proposal are covered by the requirement for import licences. Objects of small value, often not unique (for example, items of porcelain, books, prints etc.) will all need to be photographed, described in detail and entered on a database. It is unclear how this database would contribute to the fight against terrorist financing. Thousands of cultural objects that do not require an export licence under Council Regulation EC 116/2009 will require importer registration, even though there is already an obligation on importers to record cultural imports for VAT purposes (form C88 SAD and any cultural goods subsequently sold under the VAT margin scheme).
CINOA suggests that the proposed requirement for importer statements is indicative of an untargeted approach that therefore represents an unnecessary additional burden on art market professionals. For this reason importer statements should be removed from the proposal.
- Import licences
The proposal sets out an import licensing process whose timetable would lead to unacceptable delays, resulting in serious and disproportionate damage to EU trade.
- As the Deloitte report notes on page 166: “Time necessary for receiving the license would slow down trade of antiquities and other artefacts… The cost for EU authorities to set up and operate such a system would be quite significant and the delays for imports could turn out to be prohibitive. The cost will be disproportionate for the authorities and for the market. It would also increase the price of the goods.”
- Furthermore, the Deloitte report recognises on page 167: “many third countries do not provide for such certification [which] would effectively mean that all imports of cultural goods from these countries would be blocked”.
- On page 167 of the Deloitte report, where exporting countries provide for export certification, but no arrangements for administrative co-operation exist between them and the EU that allow cross-checking of the certificates, “imports would de facto also be blocked”.
- Electronic applications procedure
Unless the procedure of applying for import licences or making importer statements is set up on an electronic basis the system will be unmanageable, both for customs authorities and for importers. It should be a condition of the proposal that new regulations cannot come into force until such a system is fully operational.
CINOA suggests this proposal for a regulation on the import of cultural goods be reconsidered for the following reasons:
- CINOA’s overall concern about risks to the EU’s legitimate market for fine art and antiques.
- The proposal’s underlying assumptions are inaccurate, and require the outcome of a more thorough analysis before finalising the measures.
If the proposal goes ahead CINOA requests that:
The lack of clarity in the terminology and use of customs codes should be addressed.
- The requirement for importer statements be deleted from the proposal (Article 5).
- Any procedure/process should be electronic and fully operational prior to the directive coming into force.
- The Annex should be unambiguous and more precisely targeted through the use of both age and financial thresholds.
- CINOA believes that the trade should be involved in the drafting of the regulation and in an effort to be constructive, CINOA has drafted suggestions for specific amendments which would make the proposal less burdensome for the trade (Contact the CINOA Secretariat for document 2018-04-23 CINOA, Import of Cultural Goods, Amendment proposals).
CINOA represents affiliated art and antique dealers – from 19 EU leading dealer associations plus associations from the United States, South Africa, Australia and Russia – cover a wide array of specialties from antiquities to contemporary art. For a complete listing, go to https://www.cinoa.org/cinoa/associations
CINOA’s associate member The International League of Antiquarian Book sellers (ILAB) federates national associations from 13 EU countries including Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Netherlands, Spain, Sweden, UK plus associations from 9 other countries. For a complete listing, go to https://ilab.org/national_associations
Please find a list of our members below:
Bundesgremium des Uhren-,juwelen-, Kunst-,Antiquitaten-und Briefmarkenhandels (AUSTRIA)
Chambre Royale des Antiquaires de Belgique (BELGIUM)
Czech Association of Antique Dealers (CZECH REPUBLIC)
Danish Art and Antique Dealers Association (DENMARK)
Chambre Syndicale de l'Estampe du Dessin et du Tableau (FRANCE)
Syndicat National des Antiquaires (FRANCE)
KUNSTÄNDLERVERBAND DEUTSCHLAND e.V. (GERMANY)
The Irish Antique Dealers Association (IRELAND)
Associazione Antiquari d'Italia (ITALY)
Federazione Italiana Mercanti d'arte (ITALY)
Association of Fine Art Dealers in the Netherlands (NETHERLANDS)
The Union of the Norwegian Art and Antique Dealers (NORWAY)
Art & Antique Dealers Association of Poland (POLAND)
Associacao Portugesa Antiquarios (PORTUGAL)
Federacion Espanola de Anticuarios (SPAIN)
Swedish Art Antique Dealers association (SWEDEN)
Kunsthandelsverband der Schweiz Association du Commerce d'art de la Suisse (SWITZERLAND)
Verband Schweizerischer Antiquare & Kunsthandler (SWITZERLAND)
Verband Schweizer Galarien (SWITZERLAND)
The British Antique Dealers Association (UK)
Lapada - The Association of Art & Antiques Dealers (UK)
The Society of London Art Dealers (UK)
Con’t CINOA’s membership in Annex A:
The Australian Antique Dealers Association Ltd (AUSTRALIA)
International Confederation of Antique & Art Dealers of Russia (RUSSIA)
South African Antique Dealers Association (SOUTH AFRICA)
Private Art Dealers Association (USA)
Art and Antique Dealers League of America (USA)
The National Antique & Art Dealers Association of America, Inc (USA)
The International Fine Print Dealers Association (USA)
 European Commission: Fighting illicit trafficking in cultural goods: analysis of customs issues in the EU, June 2017, page 120: Figure 30: This shows the lack of terrorist financing activities within the EU from the trade in cultural goods. See http://goo.gl/iWyMwF
 World Customs Organisation’s latest Illicit Trade Report (2016). Page 12 shows no seizures at all in Western Europe other than Switzerland of looted cultural property with possible links to terrorism financing. For risk comparison purposes, the WCO report gives the following statistics for global seizures in 2016:
– Drugs: 1 c.1.5 million kilos. Number of seizures: c.45,000
– Weapons & ammunition: number of pieces seized c.2.5 million. Number of seizures: c.4500.
– Cigarettes: 3.5 billion from 4768 seizures
– Counterfeit goods: c.200 million items from c.35,000 seizures
– Environmental products (Animal and Plant parts): c.750,000 items from 2225 seizures
– Cultural property: 8343 items from 146 seizures (only a proportion of which were antiquities c.70)
 Initial Appraisal of a European Commission Impact Assessment: Impact assessment (SWD(2017) 262, SWD(2017) 263 (summary)) of a Commission proposal for a regulation of the European Parliament and of the Council on the import of cultural goods (COM(2017) 375), December 2017, Ex-Ante Impact Assessment Unit, see p.8: https://bit.ly/2IApy1w
 See section 4 of the Explanatory Memorandum of Proposal for a Regulation of the European Parliament and of the Council on the import of cultural goods, published July 13, 2017: https://bit.ly/2qey4f7