The IAL recently submitted a response to a consultation on export controls released by the UK’s Department for Digital, Culture, Media & Sport (DCMS). The consultation related to a recent proposal to introduce a legally binding offer into the mechanism by which would-be exporters are required to accept fair matching offers from UK institutions (or private entities) in order to keep works of art in the UK – the famous process of ‘saving works for the nation’.

The system to protect national treasures in the UK has been in place – largely unchanged – since the 1950s, when the Waverley Commission established the three bases upon which an export permit for a work of art or object of cultural interest can be deferred: (1) if the work is closely connected to history or national life, (2) if the work is of outstanding aesthetic importance or (3) if the work is of outstanding significance for the study of some branch of art, learning or history. These three criteria are still used by the Reviewing Committee on the Export of Works of Art and Objects of Cultural Interest today (with only one minor variation, which is of little import for present matters).

When an item meets one or more of the ‘Waverley Criteria’, its export licence will be deferred, usually for a period of around six months, though sometimes longer, in order for a UK buyer to raise sufficient funds to step forward and acquire it. The problem, however, has arisen where a buyer makes an offer to acquire the work from the exporter, but the exporter either refuses the offer or promptly withdraws the export application. While in those cases the exporter would be unable to permanently remove the item from the UK (and would be blocked from even applying again for another ten years or so), the situation causes much havoc amongst the museum community. The reason is that, in order to make a ‘matching offer’ to acquire the item, much work must be done on the back end to rile up funds from donors, funding bodies and the public. Picture the completion of a gruelling six-month campaign to raise, say, £10 million to acquire a Turner, only to learn that the work is no longer being offered by the exporter.

The solution proposed by the DCMS is for an Option Agreement to be signed during the deferral period between the exporter and an entity with a serious interest in making an offer on the item. This would be a contract, giving the latter the option to buy once it has raised sufficient funds, and thus enforceable under contract law against the recalcitrant exporter. At the very least, the signing of such an agreement during the deferral period would force the exporter to take very seriously his/her requirement to accept the offer, should such an offer come about.

This proposal is nothing new. As we noted in our response to the consultation, a similar legally binding mechanism was proposed in both the Quinquennial Review of the export system in 2003 and the Goodison Report of the following year (for more on those, see solicitor Edward Manisty’s revealing 2007 article in our journal). After those proposals, the DCMS ultimately rejected the idea; so it is interesting (to say the least) that the DCMS is canvassing opinion on a similar mechanism some 15 years later. In the intervening years, there have been a number of high-profile cases where fair matching offers were refused, or applications were withdrawn, late in the process, to the consternation of the museums and fundraisers concerned: one involving Pontormo’s Portrait of a Young Man in a Red Cap, another involving Clive of India’s hookah set, and an ongoing spat over Joshua Reynolds’s Portrait of Omai.

While the IAL was in general agreement with the suggestion of a binding mechanism to be introduced through an Option Agreement, we had certain concerns which bore out in our answers. Namely, it was important that the rights of exporters be respected in the process, otherwise it may have negative human rights ramifications (regarding the right to peacefully enjoy one’s possessions enshrined at Article 1 of the First Protocol to the European Convention on Human Rights and, in UK domestic law, through the Human Rights Act 1998). It is noteworthy that the property and contractual rights of exporters were the supposed grounds for the DCMS’s ultimate rejection of the similar proposal put forward in the early 2000s. It was for this reason that we recommended that a very careful balance between the operation of the mechanism and the rights of the exporter be followed throughout (in this regard, see our answer to Question 2).

We also made a number of comments on some of the details of the system which included, for example, a rather convoluted prospect for the exporter to become bound to more than a single offeror (we didn’t approve of such a scenario, as you can see from our answer to Question 7). There was also a suggestion that a threshold value should apply to the envisaged scheme, suggested at £100,000, which we concluded was somewhat low, considering the burdensome nature of the mechanism and the fact that the real aim was to protect objects of truly great national importance (we suggested instead a threshold value of £1 million).

You can see our answers here, and consider them alongside the original DCMS consultation document from December 2018.

In matters of consultation such as these, the IAL always strives to provide a balanced and neutral viewpoint. We believe this is highly valued in a sector where the discussion on certain matters can often appear one-sided. Of course, we wouldn’t be able to play this role without the support of our dedicated membership. It is worth thanking all our members for ensuring that IAL remains active and independent in all its public engagement. If you believe in this sort of engagement, as well as the scholarship and training IAL provides, do consider becoming a member today.

We will now be working on detailed responses to an open consultation on updating the law of treasure in England and Wales, due at the end of April 2019. Once completed, we shall make public our answers to this consultation as well.