Congress has passed and President Obama is expected to sign two bills related to looted art and the availability of U.S. courts to hear disputes over them. The Holocaust Expropriated Art Recovery (HEAR) Act of 2016 and the Foreign Cultural Exchange Jurisdictional Clarification Act (FCEJCA, for lack of a handy acronym) were both passed without objection both the House of Representatives on December 10, 2016, and are expected to be signed by President Obama shortly. The HEAR Act is a major shift in the law of Nazi-looted art claims specifically, while the FCEJCA is controversial but unlikely to have a broad impact one way or another. It is perhaps most remarkable that in an era of unique partisanship and political polarization, members of Congress from both parties and the President agreed on anything, let alone unanimously (sponsors include such unusual allies as Ted Cruz, Richard Blumenthal, John Cornyn, and Charles Schumer).

Both bills have been covered here before. The HEAR Act creates a uniform, federal statute of limitations for claims to Nazi-looted art at six years from the date of discovery of the circumstances of the claim (including the location of the work) for claims not yet known. For others that are either already time barred, or within some existing state statute of limitations, the “date of discovery” is deemed to be the effective date of the law. That legislates out of existence New York’s well-known “demand and refusal” rule, under which the statute of limitations for conversion or replevin claims does not run until the plaintiff makes demand for the property’s return and the defendant unequivocally refuses (the rule is unchanged for other kinds of personal property).

It will be interesting to see what effect this has in the short term including, for example, whether there is a category of as-yet un-asserted claims in New York that will be filed in court within the next six years (claims that otherwise would not expire until the defendant refused return). Also unknown is the volume of claims that might have been time-barred under other states’ three-year statute of limitations that will spring back to life.

But the law is a positive for two reasons. The first should be welcomed by both plaintiffs and defendants. An extraordinary amount of time and resources have been spent arguing choice of law issues on statutes of limitations, or on the constitutionality of state law amendments (the first few years of the Von Saher case was devoted principally to litigating California’s attempted abolition of the statute of limitations, an abolition ruled unconstitutional by the Ninth Circuit). Little if any of that litigation vindicated either claimant or possessor. This law tees up more substantive inquiries.

The second important component is the law’s affirmance of restitution as consistent with U.S. policy. Since the so-called London Declaration of 1943, U.S. policy has explicitly supported the restitution of Nazi-looted art to its true owners, yet there has likewise been considerable litigation over whether that policy ended with the “Monuments Men” return of art to its source country. The case law is, in fact, clear, but defendants (like Germany in my clients’ claims for the return of the Welfenschatz, or Guelph Treasure), continue to argue to courts that they (the courts) should abstain from hearing the case under this view of U.S. policy. The law puts that debate to rest, and supports unequivocally claimants’ right to be heard.

The FCEJCA has always been more of a problem in search of a solution. It amends the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605 (the FSIA), which provides federal court jurisdiction over foreign sovereign defendants and provides a number of exceptions to sovereign immunity such that the otherwise immune defendant may be sued. The expropriation exception embodied in § 1605(a)(3) of the FSIA states that where the claim concerns rights in property taken in violation of international law, and the foreign sovereign defendant is engaged presently in commercial activity in the United States, it may be sued (this is the provision on which the claims we filed last week on behalf of the heirs of Alfred Flechtheim is based, for example).

The new law eliminates a very particular version of this exception, and one that has happened only once. Namely, if the sovereign defendant’s only commercial activity is the loan of a cultural object that has been granted immunity from seizure under 22 U.S.C. § 2459, the Immunity from Seizure Act (IFSA), then sovereign immunity will remain and the defendant cannot be sued on that basis in U.S. court. The instance in which this arose was when the Stedelijk Museum loaned several paintings by Kazimir Malevicz to the United States, and the painter’s heirs sued and argued that that loan constituted commercial activity despite the paintings’ IFSA immunity. The U.S. District Court held that the loan was sufficient commercial activity and denied the defendant’s motion to dismiss, after which the case settled.

There have been vociferous protestations that the law will effectively excuse the loan of stolen art (putting aside that the law also has a sub-exception for Nazi-looted claims). This criticism misses the mark because it is IFSA—the law since 1965—not the new law, that creates this immunity. Whether allegedly looted art should be immune from seizure is a very different, and important, question, but not one that the new law addresses. Constructively, the Holocaust Art Recovery Project (HARP), which has denounced each iteration of this new law, has performed a detailed analysis of objects immunized from seizure to make the point that the State Department (which administers the applications) is not up to the task. This study (entitled “The U.S. Department of State Is Structurally Unable To Perform Appropriate Provenance Research On Immunity From Seizure Applications Submitted By Foreign Museums”) is important work, because quite unlike the bipartisan passage the recent legislation it is anyone’s guess what the incoming administration’s view of IFSA will be.

Lastly, the FCEJCA has been covered extensively as related to the ongoing embargo that Russia has instituted on loans of cultural artifacts after it lost an FSIA motion to dismiss in its litigation with the Chabad movement several years ago. Rather than continue to litigate the case after an interim setback, Russia fired its lawyers, insulted the independence of the U.S. judiciary, sued the Library of Congress in Russia and refused further participation. They have been in contempt of the U.S. District Court for nearly four years.

Yet that unilateral embargo could have been lifted any time. The law will change nothing as it relates to Russia. Assuming for the sake of argument that the exact same fact pattern occurred as had in the Chabad case, the result would be exactly the same, and Russia would still be subject to U.S. court jurisdiction.

Broad art-related federal legislation is rare, and this is an unusual moment to witness two such laws.