Eleonora Chielli is a partner at Chielli Law Firm, member of the Bar Association in Venice and lecturer in Art Law at Istituto Europeo di Design.

The Guidelines issued on 1 February 2019 clarified the way in which SIAE (Società Italiana degli Autori ed Editori), the Italian equivalent to DACS, who is entitled to collect Resale Right royalties in Italy, could apply said Right (Diritto di seguito) putting an end to interpretative doubts.

Resale right, which derives from Directive 2001/84/EC, and provided for in articles 144 to 155 of the Italian Law on Authors’ Rights (Legge sul diritto d’autore), is the right of a Visual Arts Author to receive a share of the sale price of his/her original work, for any sales above three thousand euros, ‘following the first’, when one party, whether as buyer, seller or intermediary of the sale is an art market professional, such as galleries, dealers and auction houses.

Problems of interpretation arose on the phrase: “sale following the first”. According to a previous interpretation of the law, any sale made by a professional seller was considered as a secondary sale following the first made directly by the artist, even if within the primary market, with the application of resale right. As a consequence, SIAE started implementing and applying the law in a strict way, also demanding royalties for sales in primary markets and giving fines to professional dealers failing to comply.

Whereas SIAE and the Italian Minister of Cultural Goods and Activities were in favour of this strict interpretation, ANGMAC (Associazione nazionale Gallerie d’arte moderna e contemporanea), the Italian national association of modern and contemporary art galleries, together with other art galleries, asked for the exclusion of resale right in the primary market. This request was based on the fact that it is common practice among professional dealers to act on behalf of artists, by virtue of a consignment agreementor a specific mandate given by the artist. Therefore even if a sale can appear to be a secondary market sale, it is actually a full-fledged first sale in the primary market, since the ownership of the artwork is not transferred to the professional dealer.

After an extended negotiation lasting six years, the parties involved reached an agreement transposed in the SIAE Guidelines. SIAE distinguished between the primary and secondary markets, resulting in the application of resale rights only to the latter.

Thus according to said Guidelines, the fact that one of the parties to the sale is a professional dealer simply allows the presumption that the sale is taking place in the secondary market. Nonetheless, this presumption is subject to the admission of evidence to the contrary, for example to demonstrate that the consignment of the artwork did not entail a transfer of its ownership to the dealer in question.

Therefore, as a final recommendation SIAE advises art dealers to enter into written contracts with artists and to give them the agreed percentage only after the sale to a third party, in order to avoid the presumption of a secondary market sale.

Whilst this update is a victory for art dealers, it could also have a strong and revolutionary effect in the wider art world, where artists and professional dealers are traditionally reluctant to enter into written agreements. In light of the extent to which the art world is a community where business is based on personal relations and connections and the request to put things in writing can be deemed as a lack of trust in the other party’s good faith, this development could, nevertheless, help change this mindset and give more certainty and security in art transactions, resulting in the prevention of further legal problems, which often arise from contracts agreed upon by a simple handshake, as discussed here.

Eleonora Chielli has also recently written an article on ‘Unauthorised Reproductions of Cultural Heritage: Remedies from the Italian Courts’ for the Art Antiquity & Law Journal, volume XXIII, issue 1, April 2018. You can order a copy of this article and many others from previous AAL issues via this link.

Image © Mnemoc via Wikimedia Commons, CC BY-SA 3.0