Art law
Australia
Australia joins droit de suite scheme
Latest sign-up reignites controversy as UK anticipates end of “70 years” exemption
By Maura Cahill Pettengill. Market, Issue 214, June 2010
Published online: 23 June 2010
Fair deal? Australia's new droit de suite law should help prevent exploitation of native Australian artists (Photo: Anoek De Groot/AFP/Getty Images)
presto, pennsylvania. This month, Australia joins 52 other countries in enacting droit de suite or “artist resale royalty” legislation. The Australian art trade “is very anxious”, said Alida Stanley, interim chief executive of Viscopy, the foremost lobbyist for resale royalty in Australia: “They don’t know how it is going to work and are frustrated because they don’t think it’s a workable scheme.”
Stanley stressed that it will most benefit Australia’s indigenous artists, who have often been exploited.
Droit de suite affords artists a cut of the profits from secondary market sales—which usually fetch higher prices than primary market transactions. While the Australian scheme differs from other countries’ in having a flat uncapped royalty of 5%, and in exempting the first resale of the work, all European countries, except Switzerland, have a version of the system.
Several trade sources argue that it is an added tax that drives down prices, hurting both artists and dealers. “Dealers are having to discount work by as much as 30%, particularly in the mid-section of the market—£10,000 to £2m—because the artist resale royalty is a significant amount relative to the price,” said art economist Clare McAndrew.
“It only really helps those that are already doing well,” said Christopher Battiscombe, director general of the Society of London Art Dealers. “The significant sums are going to a…small group of artists—the top 10%.”
New York-based art advisor Avi Spira, director of Art Ventures International, said the scheme is punitive. Referring to his purchase of an early Damien Hirst work at Christie’s London last October, at auction for the fourth time, he said: “In that case, a £10,000 royalty—on top of the hammer price and buyer’s premium—went far afield of the intention to provide for artists.”
Two of the largest international markets do not currently participate in the scheme: the United States (barring California) and China, which some believe causes market distortions. “It is a very leaky boat unless there is global enforcement,” said Lisson Gallery director Nicholas Logsdail. New York art advisor Todd Levin, director of Levin Art Group, generally favours the concept but echoed the need for universal application: “The problem is that not everyone is on an even footing—when L&M in LA, Gagosian in New York, White Cube in London and Roslyn Oxley9 in Australia are all subject to [the legislation], no one will care about paying it.”
Nevertheless, some in the UK are particularly concerned. Since its inception in 2006, the UK has only applied the royalty to living artists—unlike most other EU countries, it has been exempt from paying royalties on works by artists who have been dead for less than 70 years. But this is set to change in 2012, according to the EU directive, and the British trade is worried about losing its market share—currently the second largest internationally—to its competitors in China and the US.
“The UK art market employs 60,000 people, and gradually there will be jobs lost as the London market will become less attractive internationally,” according to Anthony Brown, chairman of the British Art Market Federation.
However, London-based René Gimpel, director of Gimpel Fils, reproached the British trade for squabbling over “a relatively small, capped amount that benefits artists”. As for the feared flight of art to non-European markets outside Europe, Gimpel pointed out the issue of the European 5% import tax: “If a European collector buys in New York to avoid the capped resale royalty of E12,500, they will have to pay an uncapped 5% import tax to bring the work back into a European country.”
New York counterparts are understandably more relaxed. Lucy Mitchell-Innes, president of the Art Dealers Association of America, said droit de suite was unlikely to be implemented across the US any time soon, saying: “It’s not a widely discussed matter.”
Meanwhile, China is staying out of it. “I was in Beijing recently, and they have never even heard of the European directive,” said McAndrew.
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