Art & Law by Dr Hannes Hartung


Art and law is a pair of terms that, at first glance, hardly harmonises: while law stands for a fixed, predictable set of norms to solve conflicts of interest in the most balanced but precise way possible, art often does not want to be so precise. This tension has also given rise to an extremely attractive field of law in this country that addresses practical issues and the resulting legal and tax problems.

A precise delimitation of art law into legal paradigms cannot succeed due to the rich facets of this discipline. Anyone who would attempt to do so would certainly forget many things. On the whole, however, art law can be classified both as a classical field of law and as a genuinely art law issue. As a cross-sectional subject, art law in the sense of commercial law naturally touches on copyright law (examples: copyright protection of art objects, the much-discussed resale right and the freedom of catalogue images), tax law (valuation of art objects, tax claims for cultural activities), general commercial law (commercial law of galleries) and related constellations (the concept of an art fund may be mentioned here as a catchword).

Art law in the narrower sense can be found in particular where the law has to deal with the extremely difficult classification of art, although art itself sometimes cannot or does not want to do this. This refers, on the one hand, to extremely sensitive issues such as the examination of the authenticity of an art object - and not only according to art historical criteria - and the resulting attribution (so-called authentication: appraisal and expertise). Finally, art theft during war, colonial times and persecution, or unclear ownership, lead to heated debates, as was impressively demonstrated by the restitution of the Berlin street scene by Ernst Ludwig Kirchner from the Berlin museum "Brücke".

In order not to go beyond the scope of this presentation, let me pick out two classic examples from the wealth of issues that have been hinted at. In the following, we will discuss the graceful bust of Nefertiti, which I am sure you are familiar with (in the context of issues in the international protection of cultural property), as well as the valuation of art objects in private collections and companies (for the advisory field of asset succession/tax law).

Must Nefertiti go home to Egypt?

The Amber Room, the Treasure of Priam, the Elgin Marbles, ...- the journey of art through "irregular transfers of ownership" run like a thread through world history. History repeats itself over and over again: Vae victis! Scholars call this an "anthropological constant". In much more subtle forms, the often dubious art transports in the age of imperialism and colonialism await reappraisal - if one still wants to do so at all. In 1812, for example, Lord Elgin received permission from a Turkish occupier to remove "some stones" from the Acropolis in Athens. A walk through the British Museum shows that he interpreted this quite generously.

The case of Nefertiti is (probably) also a question of interpretation. According to the applicable doctrine in Egypt at the time, an excavator could obtain ownership of one half of the finds by obtaining the consent of the competent authority. On 20 January 1913, Ludwig Borchardt spread out his finds for the purpose of dividing them up and cleverly concealed the beautiful Nefertiti among meaningless antiquities. Happy about the Egyptian official's indulgence, the Jewish patron James Simon transported his Nefertiti to Berlin, where it was not exhibited publicly for the first time until 1924 on the Museum Island. While Göring wanted to return it to Cairo in 1933, Hitler's word of power prevented this request. 70 years later, Nefertiti was placed on a perfectly fitting naked female corpus by Polish artists in Berlin, which caused horror in Egypt (opponents of restitution see this as a sign of ignorance).

Egypt still insists today that it never issued an export permit for Nefertiti and demands her return. A loan to Egypt is refused by the Berlin curators for conservation reasons - a commission of experts is now to review this. In principle, a claim for the return of Nefertiti would be time-barred under German law. It was only after the Second World War that international conventions on the restitution of illegally transferred art treasures were adopted. However, these regulations are not retroactive.

Current owners like to argue that only the removal to "civilisation" "saved" the art treasures from their certain demise on site. According to this line of argument, however, anyone who has the supposedly better means of conservation or because a later event would have destroyed the object anyway is allowed to steal cultural assets. How is one supposed to know that?

For this reason alone, what matters in international law is whether the current owner can be considered to be in bad faith and whether the claimant has made continuous efforts to recover the property. In the case of Nefertiti, both must be answered in the affirmative; for once, Germany is not in the victim role here. While one rightly complains about the blocking attitude of Russia or Poland in the looted art debate, one is reluctant to part with key works that came here especially in the age of imperialism. Conclusion arguments can only be accepted, however, if they apply without distinction to every art theft - be it looted art or art treasures from former colonies (or not even that). But this is still a long way off.

The valuation of art objects

"Things only have the value that you give them". Whether Molière also had art in mind, we do not know. But surely you know from your own experience how differently art is appraised - with sometimes astonishing results. Decisive factors are the quality that reveals itself to the eye of the beholder, an impeccable provenance (some histories are more exciting than their paintings), "market freshness", contemporary taste, the "performance" on the market and, last but not least, authenticity. Ultimately, intuition, heart, mind and wallet decide, depending on the personal mix. While a work of art wants to appear as insignificant as possible before the tax, it cannot be expensive enough when sold. The price of a work of art can only ever be that paid for it in a concrete acquisition situation. This shows that a valuation of works of art can only ever be as good as the fundamentals and background taken into account in it. A complete valuation should be able to do justice to the classic valuation occasions (sale, case of damage, loss, donation, inheritance) without knowing exactly what may come next.

From the point of view of the entrepreneur-patron, the above results nominally in "lowest" (tax/inheritance), "middle" (insurance) and highest values (for sale). In contrast, appraisers like to speak only of replacement value. What is decisive, however, is the fair market value, which is of sole interest to the tax authorities and which can deviate considerably from the replacement value due to fluctuations in value on the market. As a rule, the fair market value is calculated from the hammer price at an auction minus the specific ancillary fees of the auction house (discount) and a safety discount (for the determination of which an intimate knowledge of the market conditions is required). If no hammer price is available, comparable auction prices (for example at can be used.

If you can be sure that you only need the assessment for a specific occasion, you can calmly focus your assignment on this. As seen, however, this will almost never be the case. The art of the valuer is always to match the valuation occasion(s) with the individual quality of the exhibit (so-called comparison procedure) as well as to make the specific valuation approach and its associated process transparent. For the tax treatment, a valuation date must be indicated.

In the light of these criteria, a pure insurance appraisal is often not useful for other purposes (e.g. inheritance or disposal). Please also consider future developments, as authorities will always ask for an independent expert opinion due to the Federal Fiscal Court's case law on inheritance tax. In addition, a collection can only be divided reasonably in a will, for example, if it has been fully recorded with a valuation approach. Finally, the valuation is decisive for art objects brought into companies, for the establishment of an art foundation and for the tax-optimised structuring of asset succession.

In the end, however, none of the values mentioned can outweigh the imaterial, if not emotional (affection) value that you - and only you - have for your work of art and establish with your affection. This factor, which should never be underestimated in the art market, cannot be taken away from you by any appraiser.

In conclusion

As you can see, art law is an extremely exciting and inspiring subject. In principle, special expertise in art law is always in demand when art forms or is to form in the future a not insignificant asset component in the portfolio of the private individual or in the company. The experienced art lawyer can offer you assistance in particular in the areas of collection succession (as part of the overall asset succession) and in the coordination and support of cultural activities in the company (e.g. in the areas of art investment, art funds and art sponsoring). Tax issues should not be neglected here and should be addressed by specialised professionals (accountants/tax advisors). Finally, (cost-) effective cooperation with art historians and experts in art consulting (including curatorial support, collection consulting) should be ensured to provide advice from a single source.

If these lines have perhaps inspired you to expand your cultural activities in your company, the author would be pleased. "Old hands" in dealing with art in companies know anyway how diversified and complex some issues can become.

The author is always available for your suggestions, discussion requests and queries.

I wish you continued enjoyment with art and hope that I have made a small contribution to this with these lines.

With best regards from Munich

Your Hannes Hartung