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The International Movement of Cultural Property

Posted on by Gianfranco Puopolo
05
Dec

The international movement of cultural property is regulated by Legislative Decree no. 43 of January 22, 2004 (“Code of Cultural Heritage and Landscape” or the “Code”), which has been subject to numerous amendments, inter alia:

– Law no. 124 of August 4, 2017, “Annual Law for Market and Competition”;

– The Ministerial Decree of May 17, 2018, no. 246;

– The Ministerial Decree of July 31, 2020, no. 367.

Before analyzing the relevant law on the international movement of cultural property, the meaning of cultural property should be clarified. Such definition was amended by Law no. 124/2017, in fact, according to the current legal framework, cultural property includes: “movable or immovable property, by whomsoever owned, which present an artistic, historical, archaeological or ethno-anthropological exceptional interest for the integrity and the completeness of the national cultural heritage” (Article 10, paragraph 3, letter d-bis of the Code), assuming that the relevant declaration of cultural interest under Article 13 of the Code has been issued, the amendment aims at assuring protection to all property which present an exceptional cultural interest for the Italian cultural heritage.

Regarding the free movement of cultural property, Italian law imposes two criteria for its free export: a time threshold and a value threshold.  Currently, works by deceased artists that were created less than 70 years ago (time threshold) and/or with a value of less than 13,500 euros (value threshold) are freely exportable.

The current legal framework was introduced by law no. 124/2017, whose objective was to “simplify the procedures of control of the international movement of ancient property in the antique market.”

In this regard, the greatest changes regarding the international movement of cultural property introduced by Law no. 124/2017, later clarified in the Ministerial Decree no. 246/2018, which implemented the latter law, are the following:

  1. According to the previous legislation, works of deceased artists created more than 50 years ago were not subject to export control. Law no. 124/2017 raised this time threshold from 50 to 70 years from the creation of the work by deceased artists; below this threshold, such property cannot be subject to export bans;
  2. Works by deceased artist created less than 70 years ago, but more than 50 years ago, may be protected if they are of exceptional interest to the integrity and completeness of the national cultural heritage;
  3. A value threshold has been introduced: the export of a work by deceased artists of more than 70 years ago with a value not exceeding EUR 13,500 can be made by submitting a single declaration in lieu of affidavit, called “Self-certification of Contemporary Art.” This declaration is declaratory in nature and takes effect from the moment it is received by the Export Office;
  4. A five-year electronic passport for art works was introduced to facilitate their exit and re-entry from and into the national territory.

The Ministerial Decree no. 246/2018 established the criteria for assessing the value of an asset and the documentation to be submitted to the competent office, specifically:

  1. If the work has been sold at auction or through an art market in the last three years, photographs and the relevant invoice shall be submitted;
  2. If the work has been sold between private individuals in the last three years, the photographs and a copy of the relevant contract shall be submitted, otherwise a joint declaration of the parties made before a public official authorized to receive it and showing the sale price shall be submitted;
  3. If the work is destined abroad to be sold at auction, the page of the auction catalogue indicating the date of the auction with photographs of the work and a maximum estimate of the work not exceeding EUR 13,500 or the mandate to sell or the deposit contract shall be submitted or otherwise a signed estimate from the auction house shall be submitted;
  4. In any other case, the value of the work may be determined by the estimate of a registered technical expert or by the Export Office upon physical presentation of the work.

The Italian value threshold is the lowest in Europe. Other states have higher or even diversified thresholds based on the kind of work to be exported, for example, EUR 300,000 in Germany, EUR 150,000 in France and GBP 180,000 in the United Kingdom.

The entry into force of this value threshold and consequently the possibility of moving property with a value of less than EUR 13,500 through self-certification had, however, been conditioned on the adaptation of the electronic system of the export office (i.e., a system to manage online the import and export procedures of cultural property) and the establishment of the registry of international movement necessary to manage cultural property in transit through the Italian territory with the issuance of a passport. However, in the three years after the entry into force of law no. 124/2017, the adaptation of the electronic system of the export office and the establishment of the registry of international movement have not been carried out. Considering that law no. 124/2017 had remained partially unimplemented, the Ministerial Decree no. 367/2020 abolished the requirement that the entry into force of the value threshold was conditioned on the establishment of the registry of international movement, and it was provided that the General Directorate of Archaeology, Fine Arts and Landscape in consultation with the General Directorate of Libraries and Copyright should have adopted the technical specifications necessary for the activation of the electronic passport by December 31, 2020. Currently, exporting art works of more than 70 years ago and with a value of less than EUR 13,500 only requires a self-certification drawn up according to the E1 (for artistic property) and E2 (for library property) models attached to the Ministerial Decree No. 246/2018.

With reference to the criminal implications related to the international movement of cultural property, law no. 22 of March 9, 2022 introduced new offenses and an increase of the penalties for already provided crimes against cultural heritage (for example, the illegal importation of cultural property).

As the latest innovation, a draft law (DDL S762) was presented on June 15, 2023 and it has a twofold objective: on the one hand, to simplify the administrative procedures for the movement of cultural property and, on the other hand, to introduce tax benefits by reducing VAT in the case of art works’ sales. Specifically, the draft law aims to:

  1. Harmonize the above time threshold to 70 years, considering that some property of more than 50 years ago is subject to protection if they are of exceptional interest to the integrity and completeness of the national cultural heritage;
  2. Significantly raise the value threshold of EUR 13,500: EUR 139,794 for paintings and EUR 46,598 for books and statues;
  3. Introduce some tax benefits. Currently, sales between private individuals of art works are subject to the ordinary VAT rate of 22%, the draft law aims to obtain a facilitated regime with a 10% VAT rate for works with a value of less than EUR 20,000 and to introduce, instead, VAT exemption in cases where the sale is made by the artist himself (or by his heirs or legatees) or in cases of import of art works from abroad for art works with a value of less than EUR 20,000.

A very recent case, which has aroused particular media coverage in Italy, concerns the collection of the Agnelli family, consisting of approximately 636 works, with illustrious names including Monet, Picasso, Bacon, Balthus, Canova and Balla. In particular, there is an inquiry whether these works were legitimately detained in compliance with the Code, whether some of them could be subject to protection, and if they were exported, whether this was done with authorization or not. Therefore, a request for access to documents had been made to the Ministry of Cultural Heritage, which was, however, subsequently blocked. Therefore, clarity is sought from the Ministry of Cultural Heritage so that the works can be located and it can be determined whether there are works that are subject to protection and therefore not freely exportable. In this regard, the Undersecretary for Culture, Mr. Vittorio Sgarbi, has spoken out, arguing that the works from the Agnelli collection cannot, in any case, be subject to export bans, not even De Chirico’s works from the 1920s for which the Code provides specific protection as they were created more than 70 years ago.

In light of the above, significant steps have been taken to ensure better simplification and speed in the international art market. Despite this, Italy still appears to be behind on certain aspects, such as the value threshold that should be raised in order to harmonize with European standards. The road is still long, but important innovations have been introduced to weaken the restrictive and protectionist nature that has always characterized Italian regulations on the international movement of cultural property.