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Germany

iii Economic rights

German copyright law provides as a principle that the author of a work should be appropriately remunerated for its exploitation.

German copyright law65 provides for the following economic rights:

athe right to make a work available to the public;

bthe right of distribution;

cthe right of reproduction; and

dthe right of broadcasting.

Generally speaking, each use of an artwork or its reproduction, other than exhibiting the artwork, requires the prior consent of the artist.

According to a recent case currently still pending at the European Court of Justice, this might also be true for ‘framing’. According to Advocate General Szpunar, the embedding of works from other websites in a web page by means of automatic links (inline linking) requires the authorisation of the holder of the rights in those works.66

Reproduction rights as well as the broadcasting rights of artists are often administered by the German copyright collecting society, VG Bild Kunst, or its international sister copyright collecting societies.

According to German jurisprudence, total buy-out contracts are regarded very critically and in most cases viewed as being invalid.

VII TRUSTS, FOUNDATIONS AND ESTATES

There are different options when it comes to keeping a collection or an artist’s legacy together. The classical option is to set up a private foundation. However, the assets of the foundation must guarantee that the foundation can pursue its purpose in a self-sustaining way. Therefore, and particularly in times of very low or even negative interest rates, it takes a considerable financial effort to set up a foundation. In addition, the foundation must have a long-term objective. In all, it can be said that a foundation is not necessarily the most

flexible structure.

Alternatively, it is also possible to set up a limited liability company or an association or other type of entity.

All such entities can, under certain conditions, apply for official non-profit status to be able to receive charitable gifts and obtain certain tax benefits. No gift tax or inheritance tax applies to gifts or bequests to non-profit organisations and non-profit museums.

To give or bequeath artworks can be beneficial as far as gift tax or inheritance tax (which are actually provided for in one and the same statute) is concerned: in general, the rate of gift tax or inheritance tax is currently levied at up to 30 per cent, or even 50 per cent in certain cases, depending on the asset and the degree of kinship of the parties. Transactions concerning art gifts or bequests of artworks can be exempted from the applicable tax to the

65§ 15 ff UrhG.

66However, embedding by means of clickable links using framing technique does not require such authorisation, which is deemed to have been given by the right holder when the work was initially made available. The same applies even where that embedding circumvents technological protection measures against framing adopted or imposed by the rights holder; see press release regarding the opinion of the Advocate General: https://curia.europa.eu/jcms/upload/docs/application/pdf/2020-09/cp200103en.pdf.

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extent of 60 per cent, or even 100 per cent under certain conditions, if there is a public interest in safeguarding the artworks and if they are publicly accessible for the purpose of educating the general public for at least 10 years.67

There is no such legal entity as an ‘estate’ in German law. If an artist or a collector, for example, dies without having provided for any of the options mentioned above, the heirs simply step into the shoes of the artist.68

VIII OUTLOOK AND CONCLUSIONS

Art law in Germany is a complex field, as very different kinds of general legal rules apply, stemming from civil law, commercial law, public law and criminal law, as well as certain special legal rules (e.g., those concerning cultural property) and finally external legally established rules, such as the Washington Principles. Art law in Germany is permanently evolving through case law and new legislation.

67§ 13 Abs. 1 Nr. 2(a) and (b) Inheritance Tax and Gift Tax Law.

68§ 1922 BGB.

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Chapter 16

GREECE

Dimitris E Paraskevas1

I INTRODUCTION

Greece has produced great artists and collectors throughout the past 2,500 years or so. Other than works of the Greek antiquity, which are not traded in Greece for legal and commercial reasons, the artists El Greco, Kounelis (from the Arte Povera movement), Rallis (the Orientalist), Takis (with exhibitions at the Tate in London and Palais de Tokyo in Paris), Chryssa and Samaras, both Greek-American artists, Moralis, Gikas, Tsarouchis, Akrithakis, Lytras, Gyzis, Iakovidis, Volanakis, Altamouras and Fassianos are among those whose works have been traded successful on the art market in Greece and abroad.

In addition to sales of Greek artworks, most of which fetch prices below €1 million, Greece’s contribution to the international art market includes some of the world’s leading collectors of non-Greek artworks. The Cézanne painting The Card Players sold to the royal family of Qatar for around US$250 million was one of the Goulandris collection masterpieces, and the Niarchos collection, worth several billion dollars, is arguably the best privately held Impressionists collection in the world. Notable among the numerous other significant Greek collections are the Ioannou collection (a patron of Jeff Koons and George Condo among others), the Economou collection, the Martinos collection and the Daskalopoulos collection.

Bonhams international auction house holds dedicated ‘Greek sales’ twice a year in London with the help of leading Greek experts Art Expertise SA, while Christie’s and Sotheby’s often include Greek works in their European sales. The leading local auction house, Vergos, specialises in books and philhellenic materials.

There are about 30 established galleries in Greece, with Bernier, Zouboulakis, Breeder and Kappatos being, perhaps, the most well known.

The market perception is that only about 20 per cent percent of the works traded become public knowledge as, in addition to auction house and gallery sales, collector-to- collector transactions or direct transactions with the artist or the artist’s estate are not uncommon in the Greek market.

The number of collectors and the domestic market in Greek artworks are small, with annual turnover of probably less than €10 million, whereas the scale of the international market in Greece (i.e., for international artworks) and the Greek collectors operating in this sphere are pretty substantial. One should not forget that about 50 per cent of Greeks reside abroad and Greek shipping is number one in the world, with many billionaires, some of whom have both a passion and an eye for the arts.

1 Dimitris E Paraskevas is the managing partner at Paraskevas Law Firm.

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Art transactions are contracts of sale governed by the provisions of the Greek Civil Code (which is similar to the German and Swiss ones) and the Code of Civil Procedure when transactions are carried out locally. Otherwise, English law is the law most commonly chosen by the parties in transactions. With regard to antiquities, there is a market in New York and as a result US law is applicable in these cases.

Disputes are usually related to tort, fakes, intellectual property and breach of compulsory law provisions in relation to antiquities and works from the Byzantine period (mostly icons). Perhaps the most publicised case was Diamantidis v. Sotheby’s. Diamantidis, a Greek shipowner, claimed successfully that works he had bought at auction at Sotheby’s by a Greek artist named Parthenis were in fact fakes. This was an unfortunate incident for Sotheby’s, which has had a respected presence in the Greek market for decades.

II THE YEAR IN REVIEW

Clearly, the covid-19 situation has been the hot topic of 2020 and there have been no other local developments that have had such a major impact.

There have not really been any distinct trends in art law in Greece over the past year, although transactions have been subject to greater scrutiny from an anti money-laundering perspective, as is the case in general internationally.

Yiannis Moralis is perhaps the artist whose work is most in demand locally, with works easily fetching between €200,000 and €500,000. Allegedly, there are works that have exchanged hands for just under €1 million.

Greece has seen a couple of significant thefts and criminal law-related cases, including the purchase of a manuscript that proved to have been stolen from a monastery years ago. The collectors established that they had no knowledge of the crime and could not have anticipated that the work was stolen, as there was no description connecting the work with Greece in the auction’s catalogue, so no charges were pressed against them.

Finally, an offer of several hundred million euros was made for a masterpiece in one of the country’s most well-known collections but was not successful, as the owners were not interested in selling the work at any price.

IIIART DISPUTES

iTitle in art

The Greek Civil Code regulates contracts of sale in Article 513 et seq.

In accordance with a contract of sale, a seller has the obligation to transfer ownership and possession of the artwork and the buyer to pay the agreed price.

Title passes according to the stipulations in the contract of sale.

If a buyer buys a work remotely (e.g., by participating in an auction) the buyer, as a consumer, has the right to withdraw from the sale within 14 days of the purchase. Clearly, a bidder who behaves in this way may be blacklisted, so the exercise of this legal right ultimately may not be commercially beneficial.

If a buyer buys from, for example, a gallery a work that proves not to meet the advertised criteria or to be defective, the seller would have to repair, replace or reduce the price of the work or return the purchase price to the buyer.

Good faith plays a role, with the buyer assumed to be acting in good faith when buying at an auction or from a gallery.

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ii Nazi-looted art and cultural property

There are no specific provisions or precedents on Nazi-looted art in Greek law. Greece has publicly suggested that it has claims against Germany in respect of looted art, but it has never pursued any such claims (perhaps reflecting the fact that Germany is Greece’s number one trading partner). Similarly, Greece has stated that it has a claim against the British Museum for the Elgin Marbles, also known as the Parthenon Marbles, but it has never pursued this claim, contrary to the advice of high-profile barrister Amal Clooney.

iii Limitation periods

Generally, there is a five-year limitation period from the day of the transaction, which may be extended if the buyer formally informs the seller of defects within the five-year period.

The position with regard to looted art is not totally clear and there is a view that there is no limitation period in cases of this kind – such as that of the Parthenon Marbles.

iv Alternative dispute resolution

There are provisions and procedures for resolving disputes via arbitration or mediation. Law 4640/19 encourages mediation in general, while a mediation effort is now mandatory for amounts in dispute in excess of €30,000.

Sadly, there are no specialised art mediators and the local field of experts is quite thin.

IV FAKES, FORGERIES AND AUTHENTICATION

Greek law provides protection at both the civil and the criminal law level. From a civil law perspective, a buyer can request that a transaction is reversed, the price adjusted, the seller provide another artwork or rectify defects (although that is generally not possible in the case of fakes).2

In addition to the above, a seller may be prosecuted for fraud or forgery if the transaction in question comes to the attention of a prosecutor or the buyer (or another) files a criminal complaint.

Warranties are regulated as in other civil law jurisdictions. A seller warrants title and authenticity by law as a matter of course, even if there is no express warranty.

The roles of experts, artist foundations and catalogues raisonnés are no different from those in any other mature market.

VART TRANSACTIONS

iPrivate sales and auctions

The dispute that may arise from private sales and auctions locally are subject to the provisions of the Greek Civil Code and the Greek Code of Civil Procedure. The Greek Consumer Protection Law3 also applies.

According to the Consumer Protection Law, a buyer may change his or her mind within 14 days of the date the sale took place. This period may be extended to one year if the seller did not inform the consumer of this right to change his or her mind. This right is

2Article 534 Greek Civil Code.

3Law 2251/1994.

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also applicable to online auctions and purchases (e.g., from eBay), in which case, the right of withdrawal commences on the day the consumer receives the artwork. It follows that if a consumer exercises this right, he or she is entitled to the return of the purchase price.

ii Art loans

There is some growth in this market; however, the market domestically is in its infancy and at present artworks on loan may be subject to seizure.

iii Cross-border transactions

Cross-border transactions are generally governed by English law, while the provisions of Greek private international law may also play a role. A major concern locally is what will happen when the United Kingdom finally exits the EU, in particular with regard to works purchased in the United Kingdom or imported from, for example, the United States via the United Kingdom.

For an artwork to be exported, a licence is required from the National Gallery. Antiquities and icons are subject to special regulations, which generally restrict their export. This is also the case for a handful of other artists’ works, (e.g., the artist Theophilos), which form part of the list of domestic cultural treasures.

Greece has ratified the following related international conventions and implemented them in national law:

athe Hague Convention for the Protection of Cultural Property in the Event of Armed Conflict;4

bthe Convention Concerning the Protection of the World Cultural and Natural Heritage;5 and

cthe Convention for the Protection of the Architectural Heritage of Europe.6

Moreover, the following national laws are applicable:

aLaw 3028/2002 defines matters related to the protection of cultural heritage and, in particular, matters related to the access to, reproduction and disposal (for simple or further use) of the reproductions of cultural monuments;

bLaw 3317/2005 on ratification of the Second Protocol to the 1954 Hague Convention for the Protection of Cultural Property in the Event of Armed Conflict;

cLaw 3348/2005 on the UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects;

dLaw 3378/2005 on the revised Convention for the Protection of the Architectural Heritage of Europe;

eLaw 3520/2006 on the Convention on the Protection and Promotion of the Diversity of Cultural Expressions;

fLaw 3521/2006 on the Convention for the Safeguarding of the Intangible Cultural Heritage; and

gLaw 3658/2008 defines measures for the protection of cultural property.

4Law 1114/1981.

5Law 1126/1981.

6Law 2039/1992.

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Postal items upon being imported from third (non-EU) countries in the customs territory of the EU, regardless of the type of their content, are subject to customs control and customs clearance, if required, in accordance with customs legislation. Artworks belong to this category of items and are subject to customs clearance and to value added tax.

iv Art finance

Although in theory some local banks provide art finance services, in practice there is no local art finance ‘market’. Major collectors may use the facilities of international banks, which are now generally limited, or they may pledge liquid assets and invest in art.

There is no special legislation on art loans.

Greece has transposed the Fifth Anti-Money Laundering Directive7 into national law through Law 4557/2018 and its recent amendment by Law 4734/2020, ensuring stricter controls in the financial environment, in line with the trend internationally.

VI ARTIST RIGHTS

i Moral rights

Under national law, artists have the right to exploit their artwork (property right) and safeguard their personal connection with it (moral right.)

The artist’s moral rights include the right to publication, recognition, the integrity of the work (i.e., no unauthorised alteration of the work) and access.

ii Resale rights

Having transposed the Resale Right Directive8 into the Greek legal system, Article 5 of Law 2121/93 recognises the resale right of a creator.

iii Economic rights

A creator may allow or restrict registration, reproduction and translation of an artwork and, generally, enjoys the economic rights recognised according to international practice.

VII TRUSTS, FOUNDATIONS AND ESTATES

Generally, the concept of a ‘trust’ as a legal relationship is not formally recognised in Greece. However, there is an understanding of the concept and legislation has developed to treat trusts as taxable entities. Distributions are taxed as dividends (at 5 per cent), but the transfer of assets for the formation of a trust is viewed as a gift. This is a complex area. In a nutshell, wealthy Greek collectors have become non-residents of Greece and have settled trusts and established foundations just as other international collectors do.

7Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU.

8Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of art.

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From a domestic practice perspective, contributions to a trust may be viewed as gifts, but the bottom line is that there are no established guidelines in the form of either precedent or case law.

VIII OUTLOOK AND CONCLUSIONS

Greece’s awareness of the importance of its culture has in recent years been reflected in a renewed emphasis on investing in its museums, promoting cultural tourism and modernising its legislation and practices in these areas, which offer enormous potential for development.

The domestic market is likely to remain small while financial conditions (as in many parts of the world) continue to be characterised by increased inequality. Some works will rise and rise in value, while others will be sold for next to nothing. Greek collectors will continue to play a significant role in the international market and new wealth will generate demand for new collections, artists, galleries, etc.

As part of the EU, Greece will follow and adopt European legislation, while the country’s efforts to introduce a Greek non-domiciled tax resident regime (following the example of the United Kingdom and other countries such as Portugal and Italy) and to welcome pensioners will put pressure on the system to develop a greater level of depth and sophistication.

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Chapter 17

HONG KONG

Angus Forsyth1

I INTRODUCTION

Twenty-first century Hong Kong has a growing and increasingly vigorous art scene.

There are two principal cultural concepts embraced here, which are, first, the law relating to what one might describe as cultural objects being tangible, physical facts that by being of a tangible and physical nature excludes literature and music per se but can and does include their physical means of expression such as musical instruments and rare books.

The real but disembodied second concept is concerned with what might be described as ‘cultural heritage’ as a conceptual essence of any realised intangible asset of or appertaining to the software comprising what a person appreciates in his or her life as his or her surroundings and environment.

The realistic and accepted status of both of these concepts in the Hong Kong community has been a slow one to take off as will be seen but is now a strong and firmly embedded cultural reality.

Since its founding by commercially aggressive Scottish pioneers in 1841, the needs and requirements of international entrepôt trade have been the paramount focus of Hong Kong’s existence.

There was an established Hong Kong museum in the 1860s but this was subsequently demolished in the late nineteenth century and was not replaced. Hong Kong became a place of fast trade, horse racing and society balls – in short, a cultural desert.

Following the end of the Second World War in 1945, Hong Kong, with a population then of some 600,000, became an attractive magnet for refugees fleeing from the turmoil demonstrated by the Civil War in China, and huge numbers of people poured into Hong Kong with scant means to support themselves other than hard work and little time for, or interest in, the softer side of life such as any form of art appreciation.

The laws that apply to art and art-related matters today were all on the statute book but only as a utility available to businessmen for court resolution of commercial disputes. It took the huge growth in the art market to find that this body of law also flexibly applies to art market issues and is respected by all participants.

In the 1950s there were no formal degree schools or programmes in any way related to art. There were very few galleries and the Hong Kong Museum of Art did not exist.

1 Angus Forsyth is a sole practitioner at Angus Forsyth & Co.

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i Statute law

In Hong Kong, the following statutory enactments, although limited in application and effect, were and have been a revolutionary attempt to come towards and to address and create the cultural educational toolbox available to the growing numbers of people interested in and caring for cultural heritage as a bedrock to nurture arts appreciation.

Antiquities and Monuments Ordinance

This Law was first enacted in 1976 as a response to increasing cultural unrest in the community, which was a rapidly growing phenomenon of which the Hong Kong government had been entirely unaware.

The background to the Antiquities and Monuments Ordinance (AMO) was the government’s vision of a massive need in a place basically formed of mountains and with very little flat land to address the fast-growing priority requirement for high-rise property development. In the absence of new developable land, this need was provided for by way of the physical destruction and redevelopment of existing built heritage into high rise. Accordingly, from the early 1970s, the Hong Kong government encouraged the demolition of the often century-old built heritage of Hong Kong of usually one-, twoor three-storey brick and granite buildings and their replacement by huge new concrete structures much better able to accommodate the growing numbers of human participators in Hong Kong life, providing new and secure environments for both commercial and residential use and with scant regard for any cultural softening in life.

However, as a legislative innovation, the AMO did introduce to Hong Kong statute law for the first time a definition of ‘antiquity’ to mean:

(a)a relic;

(b)a place, building, site or structure erected, formed, or built by human agency before the year 1800 and the ruins or remains of any such place, building, site or structure whether or not the same has been modified, added to or restored after the year 1799.

Two interesting real points emerged from these definitions, which are, first, that in a revolutionary marker for Hong Kong legislation the AMO recognises the existence of a ‘relic’ and second, given that Hong Kong was ceded to the United Kingdom in 1841, the AMO provides for no recognition of antiquity in the buildings of the colonial period after 1841. Accordingly, the AMO takes no position on preservation of buildings from the colonial era.

However, ‘relic’ is defined as:

(a)a movable object made, shaped, painted, carved, inscribed or otherwise created, manufactured, produced or modified by human agency before the year 1800, whether or not it has been modified, added to or restored after the year 1979; and

(b)fossil remains or impressions.

For the purposes of art law, ‘relics’ were and are covered by the AMO but with the limited effect to enact that the ownership of every relic discovered in Hong Kong after the commencement of the AMO vests in the government from the moment of discovery.

This automatic vesting in the government upon discovery of a relic in Hong Kong can be disclaimed by the Secretary for Development empowered under the AMO and, if so

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