Buying and selling
Passing of title
When does ownership of art, antiques and collectibles pass from seller to buyer?
The contract for the sale of goods obliges the seller to deliver them to the buyer and the buyer to pay the agreed price. Principally, ownership of movable goods can only be transferred when the goods are delivered to the buyer. However, according to article 279 of the Turkish Code of Obligations (TCO), the title of a movable asset is transferred to the bidder as soon as he or she places a successful bid. The parties may agree on the retention of title for movable goods. By doing this, they may postpone the transfer of title past the possession date even if the buyer receives possession of the movable asset. However, this contract must be executed before a notary and recorded in a specific registry for ownership to be legally enforceable.
Implied warranty of title
Does the law of your jurisdiction provide that the seller gives the buyer an implied warranty of title?
According to the TCO, the seller gives warranty to deliver assets free from any encumbrances. However, the buyer may agree to take the assets subject to encumbrances. In this case, the seller’s liability terminates. The parties may also execute an agreement to limit or exclude the implied warranty. However if the seller acts in bad faith, the agreement will be void. The buyer is obliged to give the seller notice of litigation, and the seller may then assist or represent the buyer in the litigation. If the notice of litigation is given in due time, a judgment against the buyer also applies for the seller unless he or she proves that the unfavourable judgment was the result of malicious intent or the gross negligence of the buyer. However, if the notice of litigation is not given in due time, the seller may be released from his or her warranty by proving that a more favourable judgment could have been achieved if notice had been given in due time. According to article 216 of the TCO, under certain circumstances the buyer’s obligation to warrant title also exists in the absence of a court decision. Turkish law is silent on the limitation period and its starting date with regard to the implied warranty of title. Therefore, the general provisions of the TCO and Supreme Court decisions must be considered. Accordingly, the statue of limitations is 10 years from the dispossession.
Can the ownership of art, antiques or collectibles be registered? Can theft or loss of a work be recorded on a public register or database?
There is no official or established register for the ownership of art, antiques or collectibles. However, if the aforementioned is cultural property, the collectors have an obligation to notify the Ministry of Culture and Tourism for its registration. Stolen or lost works may also be recorded in a public register. The Ministry of Cultural Affairs publishes these works on its website (www.kulturvarliklari.gov.tr/TR,195650/bakanligimiza-bagli-muzeler--birimlerden-calinan--kaybo-.html) and regularly sends a list of them to the auction houses. There are also databases including Interpol, the ICOM Red List, the Art Loss Register and Art Recovery International.
Good-faith acquisition of stolen art
Does the law of your jurisdiction tend to prefer the victim of theft or the acquirer in good faith of stolen art?
It is a general principle of Turkish law to protect the acquirer in good faith, whose title is considered superior to the victim of theft. Therefore, all buyers of movable property, regardless of whether it is stolen, are presumed to act in good faith. The acquirer in good faith cannot have known or should not have been expected to know about the absence of ownership at the time of the purchase. It is worth emphasising that the concept of a good-faith acquirer may change depending on the position of the transferor. The original owner (victim of theft) is entitled to claim the return of the stolen artwork from the acquirer within five years of the date the artwork was lost. In this case, the claimant must prove that the buyer acted in bad faith and that possession was lost unwillingly, and the original owner bears the burden of establishing otherwise. However, if the stolen art has been bought from a market, an auction or a dealer of objects of the same nature by the good-faith buyer, the claimant must reimburse the price paid by the good-faith buyer in order to start a legal proceeding. The good-faith buyer also reserves the right to request an indemnification for the expenses arising from the stolen art.
The concept of acquisitions in good faith does not apply to cultural property.
Acquiring title to stolen art through prescription
If ownership in stolen art, antiques or collectibles does not vest in the acquirer in good faith, is the new acquirer protected from a claim by the victim of theft after a certain period?
It must be determined whether the new acquirer is the bona fide possessor. In principle, the statute of limitation starts from the date of possession. However, if the new acquirer is in good faith, he or she may also add the period of time that the artwork was possessed by his or her predecessor. However, if the predecessor did not act in good faith, this is not allowed.
Can ownership in art, antiques or collectibles vest in the acquirer in bad faith after a period?
No. The victim of theft is always entitled to claim against the acquirer in bad faith and recover the artwork.
Risk of loss or damage
When does risk of loss or damage pass from seller to buyer if the contract is silent on the issue?
If the contract is silent on risk of loss or damage, according to the TCO, the risk passes to the buyer when possession of movable goods is transferred on movables and when the sale of immovable goods is registered. The United Nations Convention on Contracts for the International Sale of Goods (CISG) includes detailed provisions with respect to the passing of risk on movable goods. The rule adopted in the TCO is embodied in article 69 of the CISG, which stipulates that risk passes to the buyer when he or she becomes the owner of the goods or, if he or she does not do so in due time, from the time when the goods are placed at his or her disposal and he or she commits a breach of contract by failing to take delivery. Article 67 of the CISG regulates two different risk-transfer mechanisms for contracts of sale involving the transit of the assets. Accordingly, if the seller is not bound to hand over the assets at a particular place, the risk passes to the buyer when the assets are handed over to the first carrier to be transported to him or her. If the seller is bound to hand over the assets to a carrier at a particular place, the risk passes to the buyer when this is carried out.
Must the buyer conduct due diligence enquiries? Are there non-compulsory enquiries that the buyer typically carries out?
Under Turkish law, there are no regulations that specifically govern the liability of the buyer or the seller to investigate the provenance or originality of art and antiques. A buyer has a general duty of diligence and must act in good faith. In practice, the buyer generally seeks a general condition report or specific expert report. However, the buyer must be particularly diligent when he or she wishes to purchase cultural property. The degree of due diligence should be determined on a case-by-case basis.
Must the seller conduct due diligence enquiries?
The seller is not legally obligated to conduct due diligence enquiries other than the general duty of information in accordance with the rules of good faith and prudence. According to the UNESCO International Code of Ethics for Dealers in Cultural Property, to which Turkey is a party, the sellers must be satisfied that the object has not been stolen or taken against the will of its owner, does not come from a clandestine excavation or has not been imported in breach of the export regulations of a foreign country. Moreover, like the buyer, the seller is under a general duty of diligence to prevent money laundering. However, according to the Law on Prevention of Laundering Proceeds of Crime and its regulations, which gave effect to the Financial Action Task Force recommendations to prevent money laundering in Turkey, if the seller qualifies as a dealer or auctioneer, it must provide a higher standard of diligence. Under the above-mentioned Law and its regulations, dealers and auction houses should be required to undertake customer due diligence as follows.
If the asset is sold for 20,000 Turkish lira or more (or 2,000 Turkish lira for electronic sales), or the transaction appears suspicious, the customer must be identified and his or her identity verified using reliable, independent source documents, data or information. If this occurs, the dealer or auction house must notify the Financial Crimes Investigation Board. Moreover, auction houses and dealers are obliged to keep a written record (register) of each customer’s identity and details of the provenance and description of the artwork and the price paid. Breach of a dealer’s or auction house’s special duty of diligence may result in criminal prosecution.
Other implied warranties
Does the law provide that the seller gives the buyer implied warranties other than an implied warranty of title?
According to article 219 of the TCO, similar to the implied warranty principle in English law, the seller will be liable if the assets sold contain deficiencies that affect their value or adequacy with respect to their prescribed and intended use, even if the seller is not aware of this particular use. However, the seller is not liable if the purchaser knew that the sold asset was defective (the seller must accept the defect). Therefore, the seller is only liable for defects that can be discovered by the buyer by adequately inspecting the sold asset if he or she has assured the buyer that they do not exist. Under the TCO, the buyer must examine the assets once they are delivered in accordance with usual customs and must notify the seller immediately once the assets have been delivered or if defects are found to exist. However, if there is evidence of gross negligence or fault on the part of the seller, he or she cannot claim that the buyer did not examine the sold asset. If the defect could not have been discovered upon inspection, the purchaser has to notify the seller immediately after discovery of the defect in order not to forfeit his or her right to a remedy. In light of all the facts mentioned above, the conditions for the seller’s warranty liability for defects are as follows:
- the defect must be significant;
- the purchaser must not have knowledge of the defect;
- the defect must be present at the time of delivery;
- the seller’s warranty must not be excluded or limited by contract; the supplier’s fault is not a condition; and
- the buyer is liable for examination (with regard to obvious defects) and notification.
It is possible for the parties to contractually waive or limit the seller’s warranty if there is no evidence of gross negligence or fault. The statute of limitations is two years from the delivery date of the asset. However, this period does not apply if gross negligence is found on the part of the seller. (If the transaction is carried out between traders, special provisions exist under the Turkish Commercial Code.)
Voiding purchase of forgeries
If the buyer discovers that the art, antique or collectible is a forgery, what claims and remedies does the buyer have?
In the presence of all conditions required for the seller’s warranty liability, the buyer will be entitled to choose from the following rights, set forth in article 227 of the TCO: rescind the contract; reduce the price or seek reparation; or replace the asset with something similar. In addition to these optional rights, the buyer is entitled to claim compensation according to the general provisions (breach of contract) unless the seller proves that he or she is not at fault. Moreover, the buyer has a 10-year limitation period from the date of the notification that the artwork is a forgery. Where a defect leads to rescission of the sale, the buyer is entitled to recover the contract price with interest, and to claim for payment of damages for all losses that have been the direct result of the defective goods. In addition, the seller is liable for any indirect loss caused by the defective goods (eg, lost profit), unless the seller is able to prove that he or she did not commit any fault. The Supreme Court has held that the buyer of defective goods may also base his or her claim on the presence of an error for rescission of the sale. However, this is not applicable if he or she has already made a claim based on warranty. Furthermore, if there is evidence that the seller has acted in bad faith, the buyer may also base his or her claim on fraud. In this case, the limitation period will be one year from the date of the discovery.
Voiding inadvertent sales of works by masters
Can a seller successfully void the sale of an artwork of uncertain attribution subsequently proved to be an autograph work by a famous master by proving mistake or error?
The seller may base his or her claim on an error. According to article 30 of the TCO, a party entering into a contract under a material error (mistake) will not be bound by the contract. There are two types of mistake: (i) mistake in the declaration of intention; and (ii) mistake in motive. As a rule, a mistake in motive is not considered to be a material mistake; rather it is a discrepancy between a party’s knowledge when entering into a contract and the actual circumstances relevant to the contract (TCO, article 32). However, the TCO can be broadly applied on this point, which means that, in certain cases, a mistake in motive is deemed to be material and can affect the validity of the contract. Conditions for a mistake in motive deemed to be material are as follows: (i) the erring party must have considered the error as a necessary basis for concluding the contract (the subjective element); (ii) the error must have been a necessary basis for concluding the contract under rules of good faith in the course of business (the objective element); and (iii) the erring party’s motive must have been known or able to have been known by the other party (the recognisability element). According to article 39 of the TCO, the party at fault may void the sale provided that it makes a claim within one year of the date the error was discovered. The erring party that is terminating the sale on the legal ground of error is liable for any damages if the misunderstanding was the result of its own negligence in examining and understanding the situation.
Export and import controls
Are there any export controls for cultural property in your jurisdiction? What are the consequences of failing to comply with export controls?
According to the Law on Conservation of Cultural and Natural Property (Law No. 2863), movable cultural property must be protected within the borders of Turkey. However, there are some exceptions, such as temporary exhibitions and the right of embassies and consulates to take back, on their departure, any cultural property that they brought into Turkey. Moreover, any property that is not listed in the Regulation on Movable Cultural Property of Ethnographic Quality may be removed from the country subject to museums’ authorisation. Failing to comply with export control rules may result in five to 12 years’ imprisonment and a pecuniary penalty of up to 5,000 days (the fine per day generally ranges from 20 Turkish lira to 100 Turkish lira depending on the circumstances; the final amount is decided by the judge). Turkey has strict customs examinations and is a member of the World Customs Organization.
Other than in relation to endangered species, are there any import controls for cultural property in your jurisdiction? What are the consequences of failing to comply with import controls?
Under article 33 of Law No. 2863, cultural property can be freely brought into the country. However, there are some import controls for the cultural properties. According to the Regulation on Movable Cultural Property of Ethnographic Quality, importers will be obliged to declare inventory list which includes the photos, names, sizes and the classification of the cultural property to customs and copy of this inventory list should be submitted to the authorised museums in Turkey as they have a right of pre-emption and also valuation, trade must be under state control. Moreover, Turkey ratified the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property in 1979 and implemented it without any reservations; under article 6 of this convention the states parties undertake to ‘introduce an appropriate certificate in which the exporting state would specify the export of the cultural property in question is authorized’. The import from a state party without an appropriate certificate shall be illicit under this convention. Thus, the customs may seize the cultural property for its restitution.
Export and import tax
Does any liability to pay tax arise upon exporting or importing art, antiques or collectibles?
All goods within the customs tariff schedule imported in order to be exhibited in private or public museums must be exempted from customs duties, fees and funds. However, if the art, antiques or collectibles are not imported for exhibition purposes, import VAT and other customs duties will be applied. The Customs Law, customs regulations, the Convention relating to temporary admission and the ATA Carnet regulate the temporary import regime in Turkey. Accordingly, artworks can be temporarily imported for sale purposes without value added tax (VAT) and customs duties. However, if a person decides to proceed with ATA carnet as a temporary import regime, only goods that will be used in exhibitions, fairs and meetings, etc, can be accepted. VAT may be charged on sales for export but the VAT can be reclaimed from the seller once the goods have been exported.
Direct and indirect taxation
Outline the main types of tax liability arising from ownership and transfer of art, antiques and collectibles.
VAT is levied at a standard rate of 18 per cent on the sale price of art by dealers, auction houses and artists, if they qualify to register for VAT. The taxpayer should be the deliverer of the property, not the owner of the property that is being sold. However, delivery signifies assignment of the right of disposition to the purchaser or seller. If there is a commission invoice with regard to selling of art, antiques or collectibles, this commission should be also subject to VAT.
In addition, traders of art, antiques or collectibles may be taxpayers subject to personal and corporate income tax in the context of the direct taxation system. Personal income tax is levied on the income of individuals (ie, natural persons). For the purposes of income tax, partnerships are not deemed to be separate entities and each partner is taxed individually on his or her share of the profit. Artists have an exemption on personal income tax through tax cuts. Corporate tax is levied on the profits of a company following the addition of disallowable expenses and the deduction of tax-exempt income. If a corporation buys a work of art for 5,000 Turkish lira and sells it through an auction house for 5,500 Turkish lira, based on the margin scheme, it should pay corporate income tax on the difference (ie, 500 Turkish lira).
Outline any tax exemptions or special conditions applicable to art, antiques and collectibles.
The Income Tax Law provides tax exemptions for cultural activities; deposits and gifts given for the following purposes that are authorised and supported by the public authorities are exempt from any tax duties. Tax exemptions apply to the following:
- national or international cultural and artistic organisations that are non-commercial;
- protection of manuscripts and rare cultural objects, and their delivery to the collections of the Ministry of Culture and Tourism;
- restoration, care, survey and transfer of cultural property;
- delivery of cultural property (as defined by law) and other contemporary or traditional artworks to the collections of the Ministry of Culture and Tourism, and provision of their security;
- production and activities concerning intangible cultural heritage, fine arts, cinema, contemporary and traditional handcraft objects, and research and film productions; and
- restitution from outside the country
Additional tax exemptions apply for private museums founded by stock corporations. If this type of museum is sponsored or approved by the Ministry of Culture and Tourism, its expenses can be wholly exempt from corporate income tax, provided that they are declared. The Turkish Inheritance Law also lists some exceptions: certain cultural property, such as personal belongings of deceased persons and family heirlooms such as paintings, swords and medals, are not taxable. (See also questions 13 to 16.)
Borrowing against art
Types of security interest
In your jurisdiction what is the usual type of security interest taken against art, antiques and collectibles?
A pledge (possessory or non-possessory) may be taken over stock, or movable property. According to article 939 of the TCO, the main form of collateral for movable property is the pledge. A pledge transfers the lender only a limited right in rem over the collateral. As a rule, a pledge may only be validly affected through delivery of the pledged assets to the lender, or to a third party trustee by an agreement, established between the lender and the borrower. However, there was a change in Turkish legislation regarding lending markets in the form of the Law on the Pledge of Movable Properties in Commercial Transactions (No. 6750) and its secondary legislation, which were introduced on 1 January 2017, to create an alternative method, particularly for small and medium-sized enterprises, to use movable pledges as security for financing purposes. Accordingly, this Law allows the borrower to keep possession of the movable property, which has a limited impact on art assets.
If the borrower borrowing against art assets in your jurisdiction qualifies as a consumer, does the loan automatically qualify as a consumer loan, and are there any exemptions allowing the lender to make a non-consumer loan to a private borrower?
Despite the fact that a limited number of private banks accept art as collateral because of legal, art-related and risk complexities, under Turkish legislation, if the borrower is acting for non-commercial reasons, he or she will qualify as a consumer and the loan will be accepted as a consumer loan.
Register of security interests
Is there a public register where security interests over art, antiques or collectibles can be registered? What is the effect of registration? Is the security interest registered against the borrower or the art?
No. Transfer of the physical possession of movable property to the pledgee or a reliable third party is the only requirement for a successful pledge under the TCO, with certain exceptions. However, the newly adopted Law on the Pledge of Movable Properties in Commercial Transactions does not require a physical delivery but instead provides for specific procedural requirements. The pledge agreement must be prepared either in written form and signed before an official of the Pledged Movable Property Registry, or certified before the notary public; or in electronic form, and signed using a secured electronic signature. The pledge agreement shall be registered to the Pledged Movable Property Registry, which was established for the perfection, monitoring and public disclosure of the pledged assets, determining priority among the pledgees and registering disposals on the pledged movable assets.
Non-possessory security interests
Can the lender against art collateral perfect its security interest without taking physical possession of the art?
See question 18.
Sale of collateral on default
If the borrower defaults on the loan, may the lender sell the collateral under the loan agreement, or must the lender seek permission from the courts?
Under general principles of Turkish law, any agreement stating that the pledged property (movable or immovable) would become the absolute property of the pledgee in the event of a default by the pledgor will be null and void. The Enforcement and Bankruptcy Law provides for two separate proceedings for the enforcement of security interests, which are the following:
- Execution proceeding without judgment. The lender can apply to the execution office along with the documents proving the existence of its receivables.
- Execution proceeding with judgment. The lender can apply to the execution office with a decision given by the competent court, or a document with similar legal effect.
Ranking of creditors
Does the lender with a valid and perfected first-priority security interest over the art collateral take precedence over all other creditors?
Yes. The lender with a valid and perfected first-priority security interest over the art collateral takes precedence over all creditors. However, debts arising from the expenses of the bankrupt estate administration or taxes arising from the assets of the bankrupt company have priority over all foregoing debts during the liquidation of the bankrupt estate. According to the Enforcement and Bankruptcy Law, the proceeds of sale of the debtor’s assets are distributed among creditors in the following order:
- debts incurred during the administration of the bankrupt estate;
- taxes, duties, fees and other governmental charges;
- secured obligations;
- employees’ wages for the past year, severance payments and unemployment insurance funds;
- certain debts of the bankrupt estate under domestic family law;
- privileged receivables of the bankrupt estate under specific laws (eg, attorneys’ fees, utilities debts); and
- unsecured receivables.
Intellectual property rights
Does copyright vest automatically in the creator, or must the creator register copyright to benefit from protection?
It is not mandatory to register copyright in order to establish certain rights, and registration is not a prerequisite for the enforcement of copyright. Copyright protection starts from the creation of the work (from the first communication of the work to the public) without the necessity for notification or registration. However, cinematographic and musical works must be registered to exploit rights and facilitate proof of ownership (not for creation of the rights). It is optional to register copyright for artworks. However, registration creates a presumption with respect to the date of creation.
What is the duration of copyright protection?
Copyright protection starts when the work becomes public and subsists for the life of the author, plus 70 years following the death of the author. The 70-year period starts from 1 January of the year following the author’s death. If there is collective ownership of a work, the 70-year period begins from the date when the last surviving author dies.
Display without right holder's consent
Can an artwork protected by copyright be exhibited in public without the copyright owner’s consent?
Yes. The consent of the author or copyright owner is not required for the act of displaying a work in public if ownership of the artwork was transferred and the copyright owner used his or her right to publicise, unless the author has expressly prohibited such exhibition or dishonoured the author. Moreover, the name of the author must be omitted unless there is a contrary customary usage.
Reproduction of copyright works in catalogues and adverts
Can artworks protected by copyright be reproduced in printed and digital museum catalogues or in advertisements for exhibitions without the copyright owner’s consent?
No. This should be considered as copying and issuing copies of the work to the public. Therefore, it should be accepted as a copyright infringement unless permission from the copyright owner is obtained.
Copyright in public artworks
Are public artworks protected by copyright?
Yes. Copyright has the characteristics of absolute rights. Accordingly, only the financial rights of the author may be assigned, wholly or partially, although he or she may license the right to use the moral rights. Usually, the artist will hold copyright in the work and the government only has a licence to use the work. There are also some exemptions, such as fair use in the common law, which includes public interest, public order and private (personal) use. According to article 40 of the Copyright Law, ‘works of fine art permanently placed on public streets, avenues or squares may be reproduced by drawings, graphics, photographs and the like, distributed, shown by projection in public premises or broadcast by radio or similar means. For architectural works, this freedom is only valid for the exterior form.’
Artist's resale right
Does the artist’s resale right apply?
Yes. Under article 45 of the Copyright Law, authors of original works of art and their heirs are entitled to a royalty each time one of their works is resold (the sale must be of more than 5,000 Turkish lira) through an art market professional. Accordingly, if the price of the first sale is lower than that of the second sale, the author of the artwork (or his or her heir) may request compensation from the reseller after each sale. However, compensation can only be requested within the protection period of 70 years starting from the first date of sale. The resale right cannot be claimed for all artworks - those that are subject to the resale right should be originals bearing the signature of the author. The artist’s resale right does not apply to architectural works.
What are the moral rights for visual artists? Can they be waived or assigned?
The moral rights for visual artists include the right to publish, the right of attribution and the right of integrity. Unlike the financial rights of the author, moral rights cannot be waived or assigned. However, the copyright holder may license the right to use the moral rights. Any agreement to the contrary is considered void. The duration of protection is the lifetime of the author plus 70 years following his or her death. Copyright covers the author’s moral rights, such as the right to publicise the work and designate the author’s name, prohibition of modification of the work and rights against the owner or possessor of the work.
Accounting to the principal
Does the law require the agent to account to the principal for any commission or other compensation received by the agent while conducting the principal’s business?
Under article 532 of the TCO, a commission agent refers to a person who buys or sells movable property or securities in his or her own name on behalf of the principal in return for a commission. Accordingly, this compensation will be payable where it is agreed or customary.
Disclosed agent commission
Does disclosure to the principal that the agent will receive a commission allow the agent to keep the commission unless the principal objects?
The agent has a number of statutory obligations, including loyalty and duty of care towards the principal. Moreover, according to article 533 of the TCO, the agent has an obligation to keep the principal informed of the performance of the commission contract (duty to account) and compliance with the principle’s instructions. Thus, the agent has a duty to disclose any commission to the principal, who has to authorise it. It is generally recommended to define in the contract when the agent is entitled to commission, the amount of commission and when payment of the commission is due.
Undisclosed agent commission
If a third party pays a commission to an agent that is not disclosed to the principal, can the principal claim the commission from the third party?
No. Turkish law recognises privity of contracts, therefore, only parties to a contract can be bound by the provisions of the contract. For example, if a sales contract exists between an agent and a third party, the principal will not be able to claim any right, as he or she is not a party to the contract.
Protection of interests in consigned works
How can consignors of artworks to dealers protect their interest in the artwork if the dealer goes into liquidation?
Under article 509 of the TCO, ‘the agent acting on the principal’s behalf acquires claims in his own name against third parties, such claims pass to the principal provided that he has fulfilled all his obligations towards the agent under the agency relationship.’ The transfer of acquired rights to the principal has no other condition than payment of the agent including his or her fees and reimbursement of all his or her costs and expenses. Article 509 also provides for when the agent is bankrupt. Similarly, liquidation of the agent will not prevent this legal assignment of claims in favour of the principal. Accordingly, the principal can claim for movable goods that the agent took possession of in his or her own name but on the principal’s behalf, subject to the agent’s own rights of lien.
Are auctions of art, antiques or collectibles subject to specific regulation in your jurisdiction?
There are limited provisions under the TCO that specifically regulate the sale and purchase of art, antiques or collectibles at voluntary live auctions. However, these provisions do not cover all aspects of the transaction, which means that the general provisions of the TCO and the Turkish Commercial Code must also be applied.
May auctioneers in your country sell art, antiques or collectibles privately; offer advances or loans against art, antiques or collectibles; and offer auction guarantees?
Yes, auctioneers may sell art, antiques or collectibles privately. In very rare cases auctioneers may also offer advances or loans against art and offer auction guarantees.
Spoliation during the Nazi era
Claims to Nazi-looted art
In what circumstances would the heirs of the party wrongly dispossessed typically prevail over the current possessor, if a court in your country accepted jurisdiction and applied its own law to a claim to art lost during the Nazi era?
There are no regulations that are specifically related to the Holocaust in Turkey. Claims may be governed by the general rules against transactions in stolen property, including in particular those pertaining to the protection of the acquirer in good faith (see question 4).
Is there an ad hoc body set up to hear claims to Nazi-looted art?
Lending to museums
Responsibility for insurance
Who is responsible for insuring art, antiques or collectibles loaned to a public museum in your jurisdiction?
If a public museum has been loaned art, antiques or collectibles for an exhibition, even it is cultural property, the artwork will usually be covered by commercial insurance as Turkey does not have a particular system in place, such as the Government Indemnity Scheme in the United Kingdom. There is no regulation of loans to public museums in Turkey. The parties may freely decide on the responsible party for insurance, which must be nail-to-nail fine art insurance.
Immunity from seizure
Are artworks, antiques or collectibles loaned to a public museum in your country immune from seizure?
Yes. Public museums provide anti-seizure guarantees to the lender, public body or cultural institution. The Ministry for Culture and Tourism is the competent authority to issue the necessary authorisations.
Is there a list of national treasures?
The term ‘national treasure’ is not included in Turkish legislation. According to Law No. 2863, cultural property encompasses all public or privately owned immovable or movable property that is related to science, culture, religion or fine arts and that belongs to prehistoric and historic periods, or that are artefacts of prehistoric and historic periods that have scientific or cultural value, and that may be above ground, underground or underwater. National treasures may be considered movable cultural property that belongs to public collections and collections of national museums, and all immovable cultural property. There are different valuation elements in order to list an artwork as cultural property, such as rarity and public interest. If an artwork is listed as cultural property, which is subject to public ownership, the former owner is entitled to compensation.
Right of pre-emption
If the state is interested in buying an artwork for the public collections, does it have a right of pre-emption?
Yes. According to article 30 of Law No. 286:
Public institutions and organisations, foundations, real and legal persons shall be obliged to, first of all, inform and show state museums movable cultural and natural property and collections that are commodities and estates for sale or objects for sale at an auction.
Therefore, collectors may exchange or sell the items in their collections to each other unless they notified the public authority 15 days before the exchange and the museum registers it. However, priority of purchase is retained by the state. A commission established by the Ministry of Culture and Tourism designates the purchase price.
Automatic vesting in the state
In what circumstances does ownership in cultural property automatically vest in the state?
According to article 5 of Law No. 2863, all cultural property (whether belonging to the state, public institutions or private institutions or individuals) is under state control and considered to be state property. In other words, the state has de jure and absolute right of ownership at all times even before the discovery. Therefore, there is an obligation to notify the government authority for classification and registration of the cultural property. Accordingly, if the cultural property is not deemed necessary to be acquired by public museums, it will be returned back to its owner with a document. By doing this, the private owner will have a limited ownership right on the cultural property.
Illegally exported property claimed by foreign states
How can a foreign state reclaim in your jurisdiction cultural property illegally exported from its territory?
Turkey ratified the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property in 1979 and implemented it without any reservations.
Turkey is also a signatory to the following international conventions relating to cultural property:
- the Convention for the Protection of the Architectural Heritage of Europe (the Granada Convention, 1985), which was ratified in 1989 and entered into force in 1990;
- the Convention for the Protection of the Archaeological Heritage of Europe (the Valetta Convention, 1992), which was ratified in 1999 and entered into force in 2000;
- the Convention Concerning the Protection of the World Cultural and Natural Heritage (Paris, 14 November 1957), which was ratified in 1982 and entered into force in 1983;
- the Convention for the Protection of Cultural Property in the Event of Armed Conflict (The Hague, 14 May 1954), which was ratified and entered in force in 1965; and
- the Convention on the safeguarding of the intangible Cultural Heritage (Paris, 17 October 2003), which was ratified and entered into force in 2006.
Turkey is also a member of UNIDROIT, but it has not ratified the 1995 Convention on Stolen or Illegally Exported Cultural Objects.
In addition to asking for restitution under Turkish law, the requesting state (if a member) can claim restitution in compliance with the UNESCO Convention. According to article 7 of this Convention, a requesting state may take appropriate steps to recover and return any cultural property imported after the entry into force of the Convention provided that the requesting state pays the appropriate compensation to an innocent purchaser or to a person who has valid title to the property.
What are the anti-money laundering compliance obligations placed on the art trade?
See question 9.
Is your jurisdiction a party to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)?
Although the CITES Convention entered into force in Turkey in 1996, the regulations implementing the convention took effect five years later in December 2001. However, these regulations are not sufficient as they have limited sanctions. In addition, Turkish criminal law does not contain any special provisions on wildlife trade (only general provisions are being implemented). Fines have been anticipated in the Customs Law in this regard.
Is the sale, import or export of pre-CITES endangered species subject to a licence?
If a pre-CITES certificate issued by the CITES management authorities verifies that the specimen was acquired before Turkey became a party to the CITES Convention or before the date the species was listed under CITES, it may be exempt from sale, import or export controls.
Is the sale, import or export of post-CITES worked or antique endangered species authorised? On what conditions?
The Ministry of Forest and Water Management has the authority to issue CITES certificates for the sale, import, export and re-export of each species listed in Turkey’s CITES regulations. Exporters must attach the certificate, which is valid for six months, to their customs declaration form. Certificates for import are valid for 12 months.
Specific endangered animal products
Are there any special rules for works of art made of elephant ivory, rhino horn or other specific endangered animal products?
In what circumstances may consumers cancel the sale of art, antiques or collectibles?
Any natural person or legal entity buying art, antiques or collectibles for non-commercial purposes will be considered a consumer under article 2(k) of the Turkish Civil Procedure Law (TCPL). The consumer may cancel (or withdraw) from a sale contract without giving a reason if that type of contract is identified in the TCPL. The concept of off-premises sales and distance sales contracts, which provide the right to cancel without a reason and without incurring any penalties, are available under the TCPL. Where the right to cancel applies, the TCPL places the responsibility of informing the consumer of this right directly on the trader and the consumer has to exercise it within the statutory period. In particular, for distance and off-premises contracts the seller must notify the consumer that he or she has the right to cancel the contract within 14 days of receiving the items bought. If the trader fails to inform the consumer of their right to cancel, TCPL and relevant regulations extend the cancellation period by one year from the end of the initial 14-day period. However, the circumstances in which a contract is made on- or off-premises are not always clear. In instalment sales contracts, the consumer’s cancellation right should be exercised in seven days, unless the dealer has not informed the consumer of their right to cancel.
Duties of businesses selling to consumers
Are there any other obligations for art businesses selling to consumers?
The TCPL provides obligations for sellers that apply to all consumer agreements, including the following: fair provisions in a contract; liabilities owing to defects (second-hand goods sold at auction where the buyer had the opportunity to be personally present at the time of sale are deemed to be sold in ‘as is’ condition); adequate information; and transparency. (See question 50.)