Last Thursday, 18th February 2016, the German parliament discussed the latest draft of the new Cultural Heritage Protection Law at the first of three readings. The draft law has been massively criticized ever since Minister of Culture Monika Grütters, proposed the first draft.
The amendment to Germany’s Cultural Heritage Protection Law (Kulturgutschutzgesetz, KGSG) from 1955 aims to suppress the trade in illicit artefacts and the financing of terrorism by it, prevent the migration of nationally significant artworks and to facilitate the return of foreign and illicit cultural goods and furthermore to implement the EU Directive 2014/60/EU and the UNESCO Convention from 1970.
What are the substantial changes implemented by the new law? According to the current draft, there will be an export license requirement on works older than 70 years and valued at over € 300,000. This will apply also to an export to EU member states. This is a major deviation from the status quo under which exports into the EU do not require such a license. An exception exists to works of living artists. Such works will not require an export license, regardless of when they were created.
Artworks that are considered to be a „cultural property of unique national importance“ will be listed in registers of the federal states and cannot be granted a permanent export permit. As a result, such works can only be sold within Germany. For the first time, the KGSG will contain a legal definition of what such a cultural property of unique national importance might be. However, given that any such definition will necessarily have to be vague, the courts will eventually decide on the question.
Works that are permanently loaned to public institutions will have a cultural protection status until they are withdrawn or until the loan agreement expires.
Furthermore, the import of cultural property into Germany requires an export permit from the country of origin. Provenance has to be examined and documented with every domestic sale. Also a guarantee for the return of illicit cultural goods to the countries of origin is provided.
As to the practical effects of the amendments, in particular the export license requirement will most likely have a stifling effect on the market. Market participants will have less interest importing works of art into Germany if there is a risk that such works will then fall under the export license requirement. Such works that are already in Germany when the amendments come into force will lose value in the event of them being placed on the list.
As regards the legislative goal to limit the illegal art trade, in particular with artefacts from war stricken places like Syria, the consensus is that, while the amendments are well intended, the practical impact will be limited as there are too many loopholes with respect to the documentation requirements.
While the current draft is still under discussion, it is not expected that significant changes will still be made. We expect that the new act will come into force mid year.
Minutes of the parliamentary hearing: http://dip21.bundestag.de/dip21/btp/18/18155.pdf