Legal Aspects Of International Sales Of Works Of Art

Art trade has become an emerging sector in the global economic arena. the deepening globalization growingly accelerate the circulation of works of art across the national boundaries, and help form a giant art market globally. With the fever of art investment originated from the USA and European countries in the 1970s, the art law studies covering the legal aspect of creation, excavation, production and sales, transfer of title, exhibition and collection of works of art, based on the enrichment of experiences, promote the growing connection between art and law. The dissertation make a study on the legal aspects of international sales of works of art with the historic approach and comparative legal approach and empirical approach, based on the legislation and judicial practices in the usa and continental countries.The dissertation consists of six chapters, roughly 220,000 words in total.Chapter one describes the concept of art and works of art, and explores the legal coverage of works of art and the evolution of art market and transaction mode of works of art as well. Considering the nature of cultural significance and geographic meaning, people find it difficult to reach a consensus on the coherent and satisfactory legal definition of arts. Legal definition of arts more relates to the political and economic consideration instead of the esthetics in the domestic laws. Hence the legal definition of arts in the domestic laws largely depends on the situation in which the term is used. The definition of arts and its coverage can be found in the civil codes, or related law concerning the protection and preservation of cultural heritage and cultural property, or law on the intellectual property protection. The coverage of arts in the respective domestic law differ considerably, even differ during the different period in the same country, which reflect the ever changing nature of works of art and emergence of new media and new form of works of art. For the sake of "common interest" in the protection of cultural property among the international community, the legal definitions are also needed to make in the international agreement or convention reached by many nations after negotiations. Because the definition made on the cultural property will, to a greater extent, determine not only the class of art the convention aimed to protect, but also the decision of related institutions such as the museums, collectors and multinational corporations. It is over 400 years after the occurrence of art market, and the scale and scope of art market in the past has expanded exponentially and become a market with over 1 trilion dollar transaction turnover. The transaction mode of works of art includes private sale and open auction, the latter has predominate nowadays though the former still exists.Chapter two explores the legal framework of export and import of works of art. There are three different stances on international sales of art lying behind the respective legal framework concerning export and import of works of art. That is "cultural internationalism", "cultural nationalism" and "cultural background". Cultural internationalism emphasize that works of art be circulated freely based on its interest in science, culture and education. Cultural nationalism put emphasis on the relationship between arts and national history, culture and identity identification. Cultural backgrounds emphasize the significance of preservation of sites and works of arts and related study information obtained from the preservation. The origin of restriction on the commercial transfer of works of art can be found in the respective domestic laws and related international conventions, legal rules in domestic law scatter around the general rules in civil codes in addition to related trade administration law or cultural property protection; rules in conventions or bilateral agreement can be found in UNESCO convention reached under the auspice of UNESCO and regional international documents such as 1992 Council regulation and 1993 Directive. The coverage of protected objects differ in the respective domestic laws, mainly because the interest of each nation differ with respect to the import and export of works of art and arts endowment differ in each nation. It is stipulated in the respective domestic law that people who violate the the import or export restrictions on works of art will face criminal penalties or administrative punishments inside the restricting countries, but outside the restricting countries, the effect of such restrictions remain uncertain.Chapter three discusses the issues relating to title in the transaction of works of art. Issues relating to title in the art trade are encountered frequently, and situations arising from the title issues vary. In the USA, the Uniform Commercial Code can be applied in the issues relating to the title in art trade. When dealing with the disputes between the bona fide purchasers and original owner, generally the traditional rules represented by the USA and other common law tradtion countries is the ownership belong to the original owner and the ownership shall not be transferred with the thieves, however, the Court in the USA later adopted "adverse possession" doctrine to support the bona fider purchasers’claims. And recently the trend in the US court seemed to be back the track and deviate from the stances of protecting the Bona Fide purchaser’s by adjusting the time limitation period. That is so-called "Demand and Refusal rules" and "Discovery and Due Dilligence ruls". To sum up, holdings made by the US court seem to grant the greater degree of protection to the original owner. Instead, the rules in civil law countries based on the Roman law tradition tends to be willing to grant protection to the Bona fide purchasers of stolen arts so as to seek the stability and certainty in the commercial transaction, but the specific rule in each nation varies.With respect to the Moral rights in the art trade, in France related law was enacted in earlier times and the coverage of the law is broad. The development of the legislation is mainly built on the theory and intellectuals. While in the USA, there is no legislation at federal level on Moral rights, except some legislation attempts at state level, for instances in such states as California and New York and Maine. With respect to the droit desuite, in Continental countries the system has been widely established though the specific rules varies; in the USA, no other state but California state has established the system, and there is no such system at the federal system up to now.Chapter four deals with the legal aspects of appraisal in art trade. Rules concerning the status of appraisers in each nation differ considerably, hence the function the appraisers performed in the appraisal of works of art in different nation vary. From the perspective of the comparative law, legislations and judicial practices in various nations show that it is generally recognized there exist a need to protect the purchasers who are injured by wrong information. However, the boundaries of responsibilities of appraisers in different countries vary, even in the same country the issue could be controversial. But it seems that a principle has been agreed on, that is, appraisers should be liable to the financial loss which is suffered due to his wrong appraisal made, the losses include both the direct loss suffered by his direct client and losses suffered by the third party whom the appraisal report has been passed through. Up to now the professional standard which the appraisers must follow is ill-defined in each country. As for the appraisal as a means of evidences, the scope of appraisal in each nation is limited to factual issue and forums in each nation adhere to the principle of the free evaluation of the appraisal.Chapter five focuses on the application of law in the art trade cases concerning foreign elements. The issue of applicable law become growingly complicated, the first level of complexity comes from the general application of private international law, for instances, the conflict law rules and judicial rules differ in many countries, among which even can not agree on the definition of "international Contract"(versus domestic contract), with the predominance of international uniform substantive law in the application of law, the second level of complexity in the co-existence system of conflict law rules and uniform substantive law comes from the combination of domestic rules and international law rules, the mix goes beyond the traditional conflict law and lead to the results which can not be expected under traditional conflict law. These results may derive from the interaction of rules of law with different sources---each rules of law apply under specific methodology and conditions and effects. The rules of law include rules of the conflict of law, uniform substantive law rules and compulsory rules. The interaction of the rules is very complicated. In order to respond to the consistent increase in the illegal traffic of works of art and cultural property, the international community launched several round negotiations on these tradables so as to adopt a convention. Generally speaking, the adoption of the international documents is nor unprecedented, but from the perspective of private law and private international law, these international documents include sth original, because it is these documents that has established a new regime for the cultural property. And these regimes can be applied within its scope regardless of how private international law rules stipulate.The substantive stipulations on such issues as warranties, misrepresentation as to authenticity or provenance, mistake as to authenticity or provenance, fraudulent misrepresentation in each nation are diverse. The earliest attempt to unify the substantive rules is reflected in the 1988 the Vienna United Nations Convention of 11 April 1980 on the Contracts for the International Sale of Goods, however, the convention has limited application scope in the art trade. Conflict law rules can be applied in such issues as contractual relationship and remedies in tort and statute of limitations.In the trade of stolen art, rules on the transfer of chattels and Bona fide acquirers and transferability of chattels and statute of limitations in each nation differ. Lex rei sitae is the main applicable law though there exist some exceptions. The attempt to unify the substantive rules is reflected in the international conventions such as the the UNESCO Convention of 1970 and 1995 UNIDROIT Convention and other regional agreement and bilateral agreement. The basic rules of the applicable law in the conflict of law issue of nationalization or expropriated art trade are that the law of where the nationalization decrees was enacted should govern the questions whether ownership in property situated in the nation could be transferred. And Public order can be used as a tool to evade the consequences of the application of foreign law.The basic rules for the applicable law in the illegal export of works of art trade are no direct enforcement of foreign public law. There also exist some exceptions, for instances, the exception of illegality of contract of sales and immorality of contract of sales and exception of giving effect to the law of the third state.1970 UNESCO Convention deserves the special attention with respect to the efforts of international community to return illegally exported works of art; while 1995 UNIDROIT Convention on the stolen or illegal export works of art has broader application scope at the private law level.Chapter six refers to the legal issues on art trade in P.R.China. based on the exploration of the evolution of the art trade and art market in China, the author make a detailed analysis of the legal environment for the art trade in China and come to a conclusion that a series of law rules on art trade has been established including rules on the ownership and utilization of art, art auction law and rules of the import and export of arts, in addition, China has accede to related international conventions and bilateral agreement, hence a mature legal regime for the art trade is being formed. The author then discuss the shortcomings existed in present legal regime for the art trade and art market in China and put forward some amendments to these laws so as to help form the complete and fully-fledged legal environment with Chinese characteristic for the operation of art market. With respect to the most criticized issue on the auction of false works of art, the author suggests that related stipulations in the auction law be amended to make clear that the auction house has due duty to appraise the works of art to guarantee the authenticity of the arts; in addition, some civil compensation system should be introduced to the legal framework for the export of works of art so as to strike a balance between the state’s interest and the interest of owner of works of art and at the same time work in harmony with international convention which China has acceded to. The enactment of cultural relic’s law should be an option in order to include the cultural relic market and indivisual cultural relics’dealer into the art market and bring them into the scope of cultural property administration. Laws concerning the appraisal and authenticity of works of art should be enacted as soon as possible to provide a certificate of qualification for the related person who engages in the appraisal of works of art so as to ensure the standard of appraisal. system concerning the droit desuite and rules on the rights of engagement should be introduced into the present copyright law to make the copyright law complete.