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05 Feb 2016

Cultural property – rules governing exports from the UK and the case of the portrait of Catrina Hooghsaet


In June 2015, it was reported that an overseas buyer had purchased Rembrandt's portrait of Catrina Hooghsaet for £35 million in a private sale through Sotheby's. The buyer subsequently applied for a licence to export the painting outside of the UK. On 16 October 2015, the UK Government announced that Culture Minister Ed Vaizey had placed a temporary ban on the export of the painting to allow time for a UK buyer to come forward. Determination of the export licence application was deferred until 15 February 2016, with scope for this period to be extended to 15 October 2016 if a potential purchaser showed a serious intention to raise funds to purchase the painting for £35 million (plus VAT). On 27 October 2015, the Art Fund stated that its planned campaign to raise funds to purchase the work had been called off after it was informed that the application for an export licence was set to be withdrawn. This case is a good illustration of how the rules governing the export of cultural property outside of the UK operate in practice and the obstacles faced by overseas buyers.

Review of applicable rules – when is a licence required?

Under the Export of Objects of Cultural Interest (Control) Order 2003 (the "Order"), the export of any object of cultural interest which is over 50 years old is prohibited without an export licence. Different rules apply depending on whether the object in question is for export within the EU or outside the EU.

If an object is for export within the EU and exceeds the value thresholds in the "Open General Export Licence" ("OGEL") (to which we refer in the following paragraph), a party seeking to export the object will need to apply for an individual export licence under the Order.

To reduce the burden on exporters, the Secretary of State issued a number of open licences which permit certain objects to be exported without the need to obtain an individual licence. One type is the OGEL. The OGEL permits the export of (amongst other things) any of the following articles which are over 50 years old to another EU member state without the need to obtain an individual licence under the Order: paintings in oil or tempura worth less than £180,000 (save for portraits of British historical personages); articles for which an EU licence has been issued; articles over 50 years old brought into the UK from outside the EU which are not in free circulation; and any article worth less than £65,000 (excluding those listed in the schedule to the OGEL, such as drawings by hand).

If an object is for export outside of the EU and exceeds the age and value thresholds specified in Council Regulation (EC) 116/2009, an EU export licence will be required. Under this regulation, an export licence will be required where an object is over 50 years old (in the case of paintings, watercolours, mosaics, sculptures and photographs), 100 years old (in the case of archaeological objects, elements of monuments and books) or 200 years old (in the case of maps) and exceeds specified value thresholds (e.g. EUR 15,000 for photographs and drawings, EUR 30,000 for watercolours and EUR 150,000 for paintings).

The process for obtaining an individual export licence

Applications for individual licences under the Order and EU licences are made to the Arts Council England. The application will be referred to an Expert Advisor who will express a view as to whether the object is a national treasure according to the following criteria, known as the "Waverley Criteria":

  1. Is it so closely connected with our history and national life that its departure would be a misfortune?
  2. Is it of outstanding aesthetic importance?
  3. Is it of outstanding significance for the study of some particular branch of art, learning or history?

If the Expert Advisor believes that any of these criteria are met, the application will be referred to the Reviewing Committee on the Export of Works of Art and Objects of Cultural Interest. If the Reviewing Committee determines that the object meets any of the Waverley Criteria, the application will be deferred for a period of time to enable an alternative offer to purchase the work at a fair market price to be made by a UK buyer. A "fair market price" may be the price at which the present owner bought the work, the price at which the present owner has agreed to sell the work or an estimated price.

If the owner of the object receives an offer at a fair market as part of this process, they are under no obligation to accept it. However, if they refuse such an offer from a public body, the Secretary of State will usually refuse to grant an export licence. Private offers will only be taken into account by the Secretary of State if the offeror has given an undertaking to the Secretary of State to ensure adequate public access to the work and to ensure satisfactory conservation and security arrangements.

Withdrawal of applications

The owner of a work is entitled to withdraw an application for an export licence in respect of that work. However, depending on the timing of the withdrawal, this may have consequences for a subsequent application.

According to the "Statutory guidance on the criteria to be taken into consideration when making a decision about whether or not to grant an export licence", if the owner of a work withdraws an application after an offer from a public source has been received, or when it is reasonably likely that they know such an offer is imminent, the owner is likely to be considered as having refused the offer. This effect of this is that, if the owner makes a subsequent application in respect of the same work within 10 years of the previous application, it will be treated as if the previous application had been refused. In this situation, unless the Reviewing Committee finds that there has been a change of circumstances since the previous application (assuming the work is still considered a national treasure), the Secretary of State will usually refuse an export licence without a deferral period.

In practical terms, this means that the work is likely to remain in the UK for at least 10 years after the first application is withdrawn. After 10 years, the owner can make a fresh application which will be subject to the usual application process (i.e. a deferral period may be recommended).

There have been a number of cases in recent years where applications have been withdrawn after a campaign was commenced by the Art Fund to raise funds to purchase the work in question. As explained above, this was the case in relation to Rembrandt's portrait of Catrina Hooghsaet.  According to the Art Newspaper, as a consequence of such withdrawals, the Art Fund is considering halting its fundraising campaigns if changes are not made to the export regime in the UK. The Art Fund is concerned that the risk of withdrawal discourages contributions to such campaigns. Its director is calling for applicants to be required to confirm at the outset of the application process whether they will accept a matching offer from a public source.



Roland Foord

Roland Foord

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