Art Talk is a series of rotating columns which explore current issues in the art market.

ART LAW
    · Limits of Ownership 1
    · Limits of Ownership 2
    · Statute of Limitations
    · The Discovery Rule
    · Nazi Confiscated Art
    · Abandoned Property
    · Taxation
ART THEFT
ART TERMS
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DETERMINING THE VALUE OF
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INSURING FINE ART

NAZI CONFISCATED ART

an excerpt from
ARTFUL OWNERSHIP
by Aaron Milrad

The possession and ownership of significant numbers of artworks has been affected by the Second World War. Hitler intended to create his own museum, and he and senior members of his staff wanted to enhance their own art collections by confiscating master works from private collections in conquered countries; this motivated a significant number art thefts. The works that were stolen were often hidden for years or placed in collections that were not open to the public, which makes it more difficult to identify the original owners. Only recently have such works begun to reenter the art market, giving rise to conflicting claims of ownership.52

The repatriation and return of art confiscated by the Nazi regime or sold to the Nazis under duress has been a continuing and difficult area of legal concern. The art affected has, in some cases, passed through many hands, which increases the number of innocent purchasers who would bear loss if the works were returned to their original owners. Works that have been purchased by museums or given to them as gifts may previously have been owned by families exterminated in the Holocaust. What law is applicable to transactions involving art that originated in one country and passed through the hands of purchasers in various other countries, ending in a third or fourth country? The choice of law will determine the applicability of a particular statute of limitations.

In 1998, forty-four nations and thirteen nongovernmental organizations met formally at the Washington Conference on Holocaust-Era Assets (November 30­December 3, 1998) and the National Archive Symposium on Records and Research Relating to Holocaust-Era Assets (December 4, 1998) to discuss the problems posed by unsettled questions of assets, including art and art objects.

The following principles with respect to Nazi-confiscated art53 emerged as a consensus of the participants.
1. Art that was confiscated by the Nazis and not subsequently restituted should be identified.
2. Relevant records and archives should be open and accessible to researchers, in accordance with the guidelines of the International Conference on Archives.
3. Resources and personnel should be made available to facilitate the identification of all art confiscated by the Nazis and not subsequently restituted.
4. In establishing that a work of art was confiscated by the Nazis and not subsequently restituted, an agreement should be made to excuse unavoidable gaps or ambiguities in the provenance in light of the passage of time and the circumstances of the Holocaust era.
5. When art is found to have been confiscated by the Nazis and not subsequently restituted, every effort should be made to publicize the known facts in order to locate its pre-war owners or their heirs.
6. Efforts should be made to establish a central registry of such information.
7. Prewar owners and their heirs should be encouraged to come forward and make known their claims to art that was confiscated by the Nazis and not subsequently restituted.
8. If the prewar owners of such art-or their heirs-can be identified, steps should be taken expeditiously to achieve a just and fair solution, recognizing that this may vary according to the facts and circumstances surrounding a specific case.
9. If the prewar owners (or heirs) of art that is found to have been confiscated by the Nazis cannot be identified, steps should be taken expeditiously to achieve a just and fair solution.
10. Commissions or other bodies established to identify art that was confiscated by the Nazis and to assist in addressing ownership issues should have a balanced membership.
11. Nations are encouraged to develop national processes to implement these principles, particularly as they relate to alternative dispute resolution mechanisms for resolving ownership issues.

The conference did not make a point of focusing on the differences between civil- and common-law systems regarding good title to chattels. When the issue was brought up, it was usually to say that no statutes of limitations should apply to art looted by the Nazis and their collaborators.

Russia made news by stating it was open to claims from individuals through their governments, but it defended its controversial law nationalizing all the art the Soviets found on German soil at the end of the war.

New Restitution Guidelines for Holocaust-Era Art in Museums
In June of 1998 the Association of Art Museum Directors (AAMD) adopted guidelines for American museums to deal with works of art confiscated during World War II and not yet returned to their legitimate owner. The guidelines are not binding but carry the force of the AAMD's 175 member museums in the United States, Canada, and Mexico.

Guidelines+-
The Association of Art Museum Directors (AAMD) has developed the following guidelines to assist museums in resolving claims, reconciling the interest of individuals or their heirs who were dispossessed of works of art with the fiduciary and legal obligations and responsibilities of art museums and their trustees to the public for whom they hold works of art in trust.

A. Research Regarding Existing Collections
1. As part of the standard research on each work of art in their collections, members of the AAMD, if they have not already done so, should begin immediately to review the provenance of works in their collections to attempt to ascertain whether any were unlawfully confiscated during the Nazi/World War II era and never restituted.
2. Member museums should search their own records thoroughly and, in addition, should take all reasonable steps to contact established archives, databases, art dealers, auction houses, donors, art historians, and other scholars and researchers who may be able to provide Nazi/World War II era provenance information.
3. AAMD recognizes that research regarding Nazi/World War II era provenance may take years to complete, may be inconclusive, and may require additional funding. The AAMD Art Issues Committee will address the matter of such research and how to facilitate it.

B. Future Gifts, Bequests, and Purchases
1. As part of the standard research on each work of art,
a. member museums should ask donors of works of art (or executors in the case of bequests) to provide as much provenance information as possible with regard to the Nazi/World War II era; and
b. member museums should ask sellers of works of art to provide as much provenance information as possible with regard to the Nazi/World War II era.
2. Where the Nazi/World War II era provenance is incomplete for a gift, bequest, or purchase, the museum should search available records and consult appropriate databases of unlawfully confiscated art.
a. In the absence of evidence of unlawful confiscation, the work is presumed not to have been confiscated, and the acquisition may proceed.
b. If there is evidence of unlawful confiscation but there is no evidence of restitution, the museum should not proceed to acquire the object and should take appropriate further action.
3. Consistent with current museum practice, member museums should publish, display, or otherwise make accessible all recent gifts, bequests, and purchases, thereby making them available for further research, examination, and study.
4. When purchasing works of art, museums should seek representations and warranties from the seller that the seller has valid title and that the work of art is free from any claims.

C. Access to Museum Records
1. Member museums should facilitate access to the Nazi/World War II era provenance information of all works of art in their collections.
2. Although a linked database of all museum holdings throughout the United States does not exist at this time, individual museums are establishing Web sites with information about collections. Others are making their holdings accessible through printed publications or archives. To assist research, AAMD is exploring the linkage of existing sites that contain collection information.

D. Discovery of Unlawfully Confiscated Works of Art
1. If a member museum determines that a work of art in its collection was illegally confiscated during the Nazi/World War II era and not restituted, the museum should make such information public.
2. In the event that a legitimate claimant comes forward, the museum should offer to resolve the matter in an equitable, appropriate, and mutually agreeable manner.
3. In the event that no legitimate claimant comes forward, the museum should acknowledge the history of the work of art on labels and publications referring to such a work.

E. Response to Claims Against the Museum
1. If a member museum receives a claim against a work of art in its collection related to an illegal confiscation during the Nazi/World War II era, it should seek to review such a claim promptly and thoroughly. The museum should request evidence of ownership from the claimant in order to assist in determining the provenance of the work of art.
2. If after working with the claimant to determine the provenance, a member museum should determine that a work of art in its collection was illegally confiscated during the Nazi/World War II era and not restituted, the museum should offer to resolve the matter in an equitable, appropriate, and mutually agreeable manner.
3. AAMD recommends that member museums consider using mediation wherever reasonably practical to help resolve claims regarding art illegally confiscated during the Nazi/World War II era and not restituted.

F. Incoming Loans
1. In preparing for exhibitions, member museums should endeavor to review provenance information regarding incoming loans.
2. Member museums should not borrow works of art known to have been illegally confiscated during the Nazi/World War II era and not restituted unless the matter has been otherwise resolved (for example, guideline D3 above).

U.S. Law
The federal statutes of the United States (U.S. Code) contain various provisions relating to theft, stolen property, and cultural property, the most important of which are outlined below.

The National Stolen Property Act
The National Stolen Property Act,55 first enacted in 1934, was created as part of title 18 (Crimes and Criminal Procedure), chapter 113 (Stolen Property), of the U.S. Code provisions regarding, among other things, transportation of stolen property and the sale or receipt of stolen property.

Transportation of stolen goods: Whoever transports in interstate or foreign commerce any goods of the value of $5,000 or more, knowing the goods to have been stolen, converted, or taken by fraud, shall be fined and/or imprisoned for not more than ten years (Section 2314).56

Sale or receipt of stolen goods: Whoever receives, possesses, conceals, stores, or sells any goods of the value of $5,000 or more, or pledges or accepts as security for a loan any goods of the value of $500 or more that have crossed a state or United States boundary after being stolen, knowing the goods to have been stolen, shall be fined and/or imprisoned for not more than ten years (Section 2315).

National Stolen Property Act has been held to apply to dealings in pre-Columbian artifacts. These were classified as stolen because the Mexican government enacted a law declaring national ownership of its patrimony. However, the courts have also held that, as a declaration of national ownership is necessary before illegal exportation of an article can be considered theft, and as Mexico did not make a clear and unequivocal declaration as to its ownership of all pre-Columbian artifacts until 1972, the law would not apply to pre-1972 dealings in such artifacts.57 In Canada, there is also the Cultural Property Export and Import Act, which deals with illegal import and export of cultural artifacts. This is discussed in chapter 9, "Cultural Property Legislation."

Theft of major artwork: A person who (a) steals or obtains by fraud any object of cultural heritage from the care, custody, or control of a museum or (b) knowing that an object of cultural heritage has been stolen or obtained by fraud (whether or not the person knows that the object was taken from a museum), receives, conceals, exhibits, or disposes of the object shall be fined and/or imprisoned for not more than ten years (Section 668). "Museum" refers to a museum situated in the United States, and "object of cultural heritage" is defined as an object that is more than one hundred years old and worth more than $5,000, or an object worth at least $100,000. The limitation period for the prosecution of an offense under Section 668 is twenty years (Section 3294). This statute and cases under it are discussed more fully in chapter 9, "Cultural Property Legislation."
United States Customs rules prohibit the importation into the United States of pre-Columbian monumental or architectural sculpture or murals exported from the country of origin (that is, the country in which such sculpture or mural was discovered). Pre-Columbian monumental or architectural sculpture or mural means any stone carving or wall art that is the product of a pre-Columbian Indian culture of Latin America subject to export control by the country of origin.58

Next Installment: Abandoned Property

About the Author

Aaron M. Milrad is a member of Fraser Milner, Barristers & Soliciters, a Canadian national law firm headquartered in Toronto. At Fraser Milner he provides specialized legal services to clients across Canda, the United States, and other countries who are involved in the visual, performing, and literary arts, music, publishing, media, and mutlimedia. Mr. Milrad also provides consulting services, including strategic planing and marketing for creators, companies, nonprofit organizations, and foundations and tax estate planning for creators, collectors and arts professionals.

To purchase a copy of Artful Ownership, please contact:
American Society of Appraisers, International Headquarters, 555 Herndon Parkway, Suite 125, Herndon, VA 20170

ISBN 0-937828-03-3

Copyright © 2000 by the American Society of Appraisers and Aaron M. Milrad.

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