Last week, we were happy to run a seminar called ‘Brexit, legal changes and the art world’ in conjunction with the London firm of Hunters Law LLP. The topic is obviously one of great interest these days as the UK grapples with a post-EU existence. There were a number of important changes that were brought about following the end of the transition period on 31 December 2020 so we tried to focus on those that promise to have the greatest impact on the art world.
The first panel dealt with import, export and tax matters. We heard from arts consultant Ivan Macquisten about the challenges facing the art market as a result of the new situation. He was followed by former MEP Daniel Dalton, who discussed one particular piece of EU legislation, Regulation 2019/880 on the introduction and the import of cultural goods. Dalton was able to confirm (from his sources) that the UK will indeed reject the upcoming electronic system for monitoring imports and the related import licensing/declaration scheme, while retaining the prohibition on entry of cultural goods illegally exported from their country of origin (I had written about this part of the Regulation and its potential impact back in December). It was rather enlightening to hear from Dalton, who had been co-Rapporteur in charge of shepherding the regulation through the EU Parliament, about how exactly the measure came about, starting as a response to the actions of Isis and the use of antiquities to finance terrorist activities, then mushrooming into a far more comprehensive control of the art market. The full regulation will come into force in the EU by June 2025.
We also heard from Kristian Hitchinson, Customs Manager and shipping expert at Constantine Ltd. He talked about the actual changes taking place in relation to shipping art to and from the Continent. Since Constantine began their 2021 transports at the beginning of January, matters have apparently run relatively smoothly at ports of entry and departure. While there may have been some growing pains (HMRC agents being unsure about how to process certain documents, etc) on the whole things have run surprisingly smoothly. Time will tell if this continues. Hitchinson also mentioned how on Customs Import Declarations for goods entering the EU, one is required to include a ‘country of origin’ for the goods. This can be difficult in the case of art or antiquities, when a country of origin can be difficult to pin down. He confirmed (subsequent to the event) that if such a country is known it should always be entered on the Declaration, if not then one can state ‘GB’ as that country.
We also heard about issues relating to VAT from Catherine Thompson, a Chartered Accountant with Rawlinson & Hunter, and the Anti-Money Laundering (AML) Regulations in the UK from adviser Tom Christopherson. While the details around VAT accounting will need to change within organisations as a result of the end of the transition period, the AML Regs are here to stay: despite their origin in EU law, the UK has no plans whatever to drop them in the future. Hunters partner Gregor Kleinknecht then spoke about a number of areas affected in different degrees by Brexit: data protection, consumer protection and dispute resolution. Of special note was the point that if the UK and EU diverge on certain rules (for instance those relating to consumer protection), then aspects of the trade arrangements between the two blocks may need to be revisited.
The final panel of the day dealt with intellectual property. My colleague Emily Gould covered the matters of copyright (specifically on the question of ‘originality’ which may indeed see the UK return to the traditionally low standard pre-dating EU harmonisation), database rights and the artist’s resale right. In relation to this last right, though it has EU origins, there are no plans for the UK to abandon it. So British artists will continue to make a royalty over certain sales of their works on the secondary market – and European artists will be able to benefit from this scheme in the UK (and vice versa). The day ended with Naomi Korn telling us about her fascinating new research project at the University of Edinburgh, where she has just begun a PhD. The topic is ‘orphan works’ and her focus is on the approach of UK institutions to such works within their collections now that the EU’s orphan works exception is no longer available to them.
All in all, the mood amongst speakers was one of mild caution. So far the impact of Brexit on the art market has not been disastrous. Nor has there been an overwhelming urge to celebrate. It seems a careful approach is being employed across the sector. In the few weeks since 1st January, nothing has gone terribly awry. But many of the changes discussed will only truly be felt in the time ahead, whether that takes weeks, months or years.