09 Sep 2016

Brexit and art law

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There is enormous uncertainty about the impact of Brexit. In the art world, Brexit could mean changes to arts funding, the Artist’s Resale Right, copyright law, export licences and VAT.

EU funding has benefitted numerous galleries, museums and artists in the UK. The ability for the UK to access the €1.46 billion budget of the Creative Europe programme (which supports the culture and audiovisual sectors in the EU) could be at risk when the UK leaves the EU. On the other hand, some pro-leavers argue that the UK will have more control over its spending and could allow the UK to strengthen its cultural ties with non-EU countries.

The changes, as we know, will take some time. Here is a summary of some of the art law issues which may be affected.

Artist’s Resale Right

This contentious right, implemented in January 2006 as a result of an EU directive, has an uncertain future.

The Artist’s Resale Right (ARR) is popular with artists as it gives them a right to a royalty each time their artwork is sold for more than €1,000 through an auction house, gallery or dealer. The royalty payable is set at 4% on sales prices between €1,000 and €50,000 with a sliding scale to 0.25% on prices of more than €500,000. Royalties are capped so that the total amount of the royalty paid for any single sale of a work cannot exceed €12,500. Since 2012, the ARR has the same duration as copyright and so applies to qualifying artists who have been dead for less than 70 years.

The ARR is not popular with the rest of the art industry who argue that it puts the UK at a disadvantage against other art markets, such as Hong Kong or New York, where it has not been introduced.

Time will tell whether the UK government will retain this right.

Export licence regime

This regime, introduced in 1993 by an EU regulation, replaced the UK’s previous export licensing system. The system allows the UK to purchase works of national importance at the same price at which they had been sold.

The regime has been used, for example, to ensure a Jane Austen ring remained in the UK (after the ring was sold to the US singer, Kelly Clarkson, and became subject to an export ban). It has also been used to save Van Dyck’s self-portrait. When the billionaire financier, James Stunt, announced his intention to buy the painting, the UK government issued a temporary export ban to allow campaigners to try and save it for the nation. When Mr Stunt realised the strength of the public opinion in favour of keeping it in the UK, he withdrew his application to buy the painting.

Copyright

Following the EU’s Copyright Duration Directive 1993/98/EEC (which made a number of changes to the Copyright, Designs and Patents Act 1998), the EU extended the copyright protection from 50 to 70 years after the life of the author. Will this extended protection remain when the UK leaves the EU?

Another uncertainty is how the standard by which a particular work can be copyrighted will be assessed. The threshold of originality is a concept which is used to distinguish works that are sufficiently original to justify copyright protection, from those that are not. A recent trend has shown the English courts moving towards the higher EU threshold that the work has to be of the “author’s own intellectual creation” (rather than the common law approach of originality). It is not clear whether the standard will continue to be analysed in the same way following Brexit.

Import VAT

Works entering the UK from outside the EU, whether imported privately or by VAT registered businesses, are subject to a 5% import VAT but works imported within the EU are exempt from import VAT.

It could be that import VAT is abolished in the wake of Brexit, which could be good news, prompting more of the global art market to relocate to the UK.

Other

There are many more areas which could be affected, such as choice of law and jurisdiction in art law disputes, the anti-money laundering regime (which is derived from the EU) and restitution claims for cultural property that have been illegally removed between EU member states.

Whilst the volume of EU law is vast, it will continue to have effect until the UK Parliament decides whether or not to keep it and that will only be after the Brexit negotiations are complete.

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