Memorandum submitted by Sotheby's
1. Sotheby's engages primarily in the public
auction sale of fine and decorative works of art and has offices
located in more than 30 countries. Auctions are conducted in 14
auction centres throughout the world. Sotheby's has, therefore,
a commercial interest in not having stolen or smuggled works of
art circulating in the art market, and strongly opposes the destruction
of archaeological sites, art theft and illegal export. The Company
fully supports the goal of suppressing the illicit traffic in
works of art and takes numerous precautions, as outlined below,
to minimise the risk of inadvertently offering for sale any objects
that may constitute part of the illicit market.
2. Sotheby's submits information on the
following topics identified by the Committee in its Press Notice
as being of interest:
Sotheby's role in combating the illicit art market;
the UNIDROIT and UNESCO Conventions;
the 1993 European Directive;
the effects of the illicit market;
practical solutions to fight the illicit market; and
spoliation in connection with the loss of works of art during
the Nazi era.
SOTHEBY'S
ROLE IN
COMBATING THE
ILLICIT ART
MARKET
3. Sotheby's Worldwide Compliance Department.
To strengthen our defence against the illicit trade in works of
art, Sotheby's was the first in the art industry to establish
a Worldwide Compliance Department, including a European Compliance
Officer. The Compliance Department reports to the Audit Committee
of the Board of Directors of Sotheby's Holdings, Inc and has primary
responsibility for ensuring the implementation of Company policies
on such issues as the international movement of works of art.
These policies are periodically reviewed and revised by the Compliance
Department.
4. Each employee is personally responsible
for understanding and complying with Sotheby's internal policies.
The Compliance Department trains employees; monitors observance
of company policies; conducts systematic audits to track compliance;
answers employees' questions about Company policy and investigates
complaints. Violations of the Company's rules may subject employees
to disciplinary action, including termination of employment.
5. Employees are obliged to comply with
Sotheby's internal policies and the laws of the countries in which
the employees are doing business, including applicable export
or import laws. Employees have been instructed to report any potential
or actual violations of Sotheby's policies or of local law to
either the Legal Department or the Compliance Department.
6. The Worldwide Compliance Department includes
three qualified lawyers, who work closely with, and are supported
by, Sotheby's Worldwide Legal Department, which has been expanded
to include nine lawyers based in the major auction locations of
London and New York. A network of law firms around the world support
the Legal and Compliance Departments.
7. Sotheby's policies. Sotheby's will not
sell property if it knows that it was illegally exported or imported
unless irregularities can be legally rectified before the sale.
If an employee suspects, or has knowledge of, an illegal export
or import, they must report their concerns to the Legal Department.
8. When providing either pre-sale estimates
to clients abroad or receipting property from clients in a country
with relevant export controls, it is Sotheby's policy to advise
the client in writing that they must comply with applicable export
and import control laws.
9. To ensure that works of art are offered
for sale by Sotheby's with good title, all sellers are required
to provide written confirmation of their legal ownership. Sotheby's
requires sellers to warrant that they have good title and that
both title and right to possession will pass to the buyer. In
addition, sellers agree to indemnify the buyer for breaches of
this warranty.
10. Sotheby's also requires sellers to:
— confirm in writing that the property
has been lawfully exported as required by the laws of any country
in which it was located, that required declarations upon the export
and import of the property have been properly made, and that any
duties and taxes on the export and import of the property have
been paid;
— indemnify the purchaser if there
is any third party claim to the property; and
— provide Sotheby's with all information
they have regarding the provenance of the property.
11. Catalogue circulation. To minimise the
risk that lost or stolen items have inadvertently been included
in a Sotheby's sale catalogue:
— all lots with a low pre-sale estimate
of £500 or more are routinely reviewed at Sotheby's expense
by the Art Loss Register;
— relevant catalogues are circulated
to appropriate international governmental and law enforcement
agencies; and
— if there is reasonable basis to believe
that property has been stolen, Sotheby's Legal Department is to
be informed immediately.
12. Provenance. Provenance is the history
of ownership of an item. Sotheby's generally publishes provenance
that in its opinion contributes to scholarship or assists in distinguishing
the work of art. The identity of the seller or prior owners may
be withheld for a variety of reasons.
13. As is evident by the broad public support
for such measures as the Data Protection Act there are numerous
legitimate reasons a person may want to protect their privacy.
It may be uncomfortable for the seller to advertise their identity
in public if they are selling out of financial necessity. In addition,
the seller may have bona fide concerns about unwanted solicitation
from auction houses, dealers, art insurance brokers or others.
There are also reasonable concerns about security from theft.
14. Moreover, the identity of prior owners
may no longer be known given the age of an object or the fact
that it is not unique. If Sotheby's receives an inquiry from an
interested party to provide additional provenance, and such provenance
exists, then it can, under appropriate circumstances, be made
available. In some cases, Sotheby's may be restricted to giving
a generic provenance such as "the seller was a French nobleman
who acquired the work directly from the artist in the 1960s".
In response to an informal inquiry regarding title to an object,
Sotheby's may request that the seller release the auction house
from its duty of confidentiality or that the seller appoint an
intermediary to speak with a claimant. Information may also be
provided in response to valid legal process such as a binding
Court order.
THE UNIDROIT AND
UNESCO CONVENTIONS
15. Sotheby's welcomes initiatives in this
area including the Government's conclusion that the UNIDROIT Convention
on the Means of Prohibiting and Preventing the Illicit Import,
Export and Transfer of Ownership of Cultural Property and the
UNIDROIT Convention on the Return of Stolen or Illegally Exported
Cultural Objects are inconsistent with English law (House of Commons
Written Answer,7 February 2000).
16. Sotheby's supports and endorses the
principles outlined in the document previously submitted to this
Committee by the British Art Market Federation regarding the UNIDROIT
and UNESCO Conventions, and includes the statements made therein
by reference.
THE 1993 EU RESTITUTION
DIRECTIVE REGARDING
RECOVERY OF
CULTURAL OBJECTS
UNLAWFULLY REMOVED
FROM A
MEMBER STATE
17. The 1993 EU Directive governs movement
of cultural objects within the European Union and grants the right
to a Member State to bring an action in another Member State for
recovery of an item that was unlawfully removed from the requesting
Member State's territory. The 1993 EU Directive has essentially
codified a key feature of the UNIDROIT and UNESCO Treaties by
granting to Member States the right to have their export control
laws enforced or respected by other Member States. Despite the
availability of this option, during the last seven years there
have been less than a dozen instances in which any Member State
has taken advantage of this right.
EFFECTS OF
THE ILLICIT
MARKET
18. Sotheby's draws the Committee's attention
to the Art Loss Register's submission that although the number
of lost or stolen items in the ALR database has increased dramatically
in the last 10 years, the number of allegedly stolen items that
appear to match items in auction catalogues has decreased. This
suggests that there is an ever-widening gap between the illicit
market and the legitimate market. This may be due, in part, to
the commitment of Sotheby's and others in the legitimate art market
to avoid selling looted, stolen or smuggled property as well as
to the increased public awareness of the activities of the Art
Loss Register.
19. A very few stolen/looted property inquiries
are received by Sotheby's outside of those few received as a result
of the Art Loss Register's work. For example, in the UK during
1999 there were inquiries about approximately 0.25 per cent of
the lots included in catalogues for sale.
20. Although Sotheby's believes that the
problem affects a comparatively small number of objects, all the
major UK auction houses are greatly concerned about the negative
effects of publicity given to the illicit art market. The often
repeated, but to date unsubstantiated, allegations in the press
that the illicit market is second only to the illegal drug market,
taint the legitimate trade in works of art. Therefore, the auction
houses have a strong business interest in the elimination of the
illicit market. Sotheby's are suggesting for consideration the
following measures to help in the battle against the illicit market.
PRACTICAL INITIATIVES
TO COMBAT
THE ILLICIT
ART MARKET
21. Given that there are already numerous
laws in effect in the United Kingdom governing different aspects
of the art market, and given the great gap between the legitimate
and the illicit markets, the enactment of further laws or regulations
does not seem justified. Further legislation risks the unintended
effect of overburdening and weakening the legitimate art market
without solving the underlying problem of the illicit market.
The lack of cases brought by signatories to the UNESCO Convention
and the negligible number of claims arising out of the 1993 Directive
during the last seven years further indicate that legislative
remedies are not perhaps the most practical solution to this complex
and serious problem.
22. Rather than introducing new legislation,
Sotheby's believes that the public should be made aware of the
risks and problems associated with the illicit market backed by
a substantially increased government commitment. Sotheby's believes
the stronger enforcement of existing laws and remedies and increased
financial support of the art fraud sections of law enforcement
may be more practical solutions. Sotheby's suggests the following
ideas for consideration:
(i) Commit resources of staff and money to
assist in staffing and training foreign and domestic customs and
law enforcement officers regarding methods to prosecute and understand
issues of art theft and smuggling;
(ii) Encourage enactment and enforcement
of anti-corruption laws in art source countries, followed by training
in anti-corruption investigation and prosecution techniques;
(iii) Promote the revision of tax laws regarding
ownership, donation and inheritance of works of art in those countries
with an active black market in order to create incentives for
citizens in those countries to report finds, to collect their
own heritage and to donate their collections back to the source
countries;
(iv) Increase criminal and civil penalties
within the context of each country's existing legal systems for
looting, art theft and smuggling of cultural patrimony;
(v) Benefit from the dramatic improvements
in modern technology to develop publicly and internationally available
registries that would include items of truly outstanding cultural
patrimony (including archaeological sites);
(vi) Develop publicly available, sophisticated
art loss registries, that would accept descriptions and photographs
of stolen items, whether from archaeological digs, churches, museums
or private collections;
(vii) Maintain a publicly available registry
requiring archaeologists excavating in source countries to provide
photographs and descriptions of the objects found on the digs
within a short and reasonable time from the date of each find;
(viii) Research methods to support prompt
completion of archaeological digs and to make mandatory publication
of the finds without delay; and
(ix) Create a task force among government
representatives of art market countries, source countries, archaeologists,
members of the art market and financial specialists to explore
creative ways to fund the above activities.
SPOLIATION IN
CONNECTION WITH
THE LOSS
OF WORKS
OF ART
DURING THE
NAZI ERA
(1933-1945)
23. It has been Sotheby's longstanding policy
not to sell any work of art that is known to have been stolen
or where there is credible evidence that it may have been stolen—whether
by the Nazis or by anyone else. Sotheby's increased focus in this
area over recent years stems, not from a change in this policy,
but from an increase in scholarship in the area of looted art
and the greater accessibility of archival material.
24. The international exposure given to
a work offered at public auction by Sotheby's and the wide circulation
of Sotheby's catalogues gives potential claimants and research
bodies a good opportunity to identify works which they believe
may have been looted. However, Sotheby's appreciates that this
alone may be insufficient to enable the heirs of victims to identify
their families' missing property.
25. To supplement the international public
notice inherent through the circulation of our catalogues worldwide,
Sotheby's has focused its work in this field in the following
main areas:
— trying, through Due Diligence, to
prevent the inadvertent sale by Sotheby's of unrestituted looted
art;
— developing working relationships
with researchers, scholars and institutions in this field; and
— consulting with families of the victims
of looting.
26. To achieve these goals Sotheby's has
taken the following steps:
27. Sotheby's Task Force. Sotheby's has
formed an International Task Force to support its specialists
throughout the world in dealing with Holocaust issues. The Force
comprises of two full-time professional war loot researchers based
in New York and London and in-house lawyers. To its knowledge,
Sotheby's is the only institution in the art market to employ
full-time, trained researchers who are multi-lingual and devoted
exclusively to researching provenance issues related to the Nazi
era. Sotheby's is advised by a network of specialist consultants
in Europe and the Americas.
28. Request for unified international database.
In February 1998, in a public statement made to the Banking &
Financial Services Committee of the United States Congress, Sotheby's
called for the formation of a single, reliable, database which
would allow victims, auction houses, dealers and museums to determine
quickly and accurately whether a particular work of art was looted
during World War II.
29. Financial support of the Art Loss Register
database. In June 1998, together with Aon Insurance, Sotheby's
took the decision to lead the financial sponsorship of the Art
Loss Register's Holocaust Initiative. As a result, since 1998,
Sotheby's worldwide catalogues have been reviewed by the Art Loss
Register, both in respect of recently stolen property, and art
seized during the Holocaust.
30. Sotheby's database. Sotheby's has created
a database of nearly 2,500 names which, in the event of any appearing
with a war time provenance, can trigger further inquiries ascertaining
the legality of the work in question. This database is available
to all Sotheby's specialists.
31. Gratis catalogue circulation. We provide
gratis copies of relevant catalogues to the key organisations
involved in this area including:
— The Commission for Art Recovery;
— The Commission for Looted Art in
Europe (formerly the European Commission on Looted Art);
— Holocaust Art Research Project located
in Washington DC; and
— The New York State Holocaust Claims
Processing Office.
32. Consultation with leading researchers
in the field. Sotheby's works with the above specialist organisations,
when researching works of art which are of concern. It regularly
consults and shares information with the leading individuals in
the field including Konstantin Akinsha, Monica Dugot, Hector Feliciano,
Willi Korte, Marc Masurovsky, Lynn Nicholas and Jonathan Petropoulos.
Sotheby's consults with various owners of private archives, such
as dealers, victims and private collectors. It also turns to the
Art Loss Register for help on specific lots and encourages victims
to lodge their lists of lost property with the Art Loss Register.
33. Sotheby's Training Programme. Sotheby's
operates a rolling programme to train relevant art specialists
in their offices around the world: to check the provenance of
works which come in for sale against its database; to consult
with its specialist war loot researchers; and to examine paintings
physically for the appearance of brands and markings on canvases
that indicate it may have come from a Holocaust victim or been
seized by the Nazis. In response to requests from the specialists
and as part of the training process, Sotheby's lawyers have developed
written standards of research that have been circulated to relevant
specialists. If the specialists discover any possibility that
an item was wrongfully taken during the Nazi era, they have been
instructed to contact the Task Force lawyers immediately. Sotheby's
has also organised seminars for museums and research bodies to
exchange their knowledge and experience in this field.
34. Provenance. In respect of works of art
created prior to 1933 (the beginning of the Nazi regime), it is
Sotheby's policy to disclose in its catalogues the fullest possible
provenance for the war years. It further requires every consignor
to disclose by contract what they know of the provenance of a
consignment.
35. Where provenance information may sometimes
be lost for the years 1933 to 1946, or the owner may simply not
have independent proof of the location from which an object came
or as to the identity of past owners, Sotheby's believes that
the absence of such documentary proof should not of itself taint
a work.
36. There are a variety of reasons that
provenance information from more than 50 years ago no longer exists.
It is, of course, much easier to trace and reconstruct the history
of an important or well-known object. In contrast, it is understandably
far more difficult to uncover the provenance of less important
works. There is likely to be a lack of any published exhibition
history for these items and they typically are owned by less well-known
collectors.
37. The difficulty of provenance research
is compounded by the fact that many of the items are not unique
(such as prints or multiple paintings of the same subject by the
same artist). The change in attribution of the work from one artist
or maker to another may further frustrate research efforts. Finally,
the titles or descriptions of an item may change over time. A
painting may at one time be described as "a tap room scene",
and later be called "a carousing couple" and still later
be called "a Dutch interior".
38. Sotheby's may discover through its own
research that property was taken during the Nazi era. In these
cases, it either arranges for the consignor or their agent to
contact directly the victim or the heirs or work directly with
the consignor and the heirs to reach resolution. There are often,
in effect, two victims involved: an innocent current owner and
the losers or their heirs. Given this possibility, it is important
to consider each matter on a case by case basis.
39. Sotheby's has offered assistance to
the National Museum Directors' Conference in the investigation
of provenance of works in public collections acquired through
Sotheby's.
40. Consolidation of governmental archives.
The issues involved are international in scope and are best solved
by using global resources and contacts. For example, there are
currently publicly available governmental archives in a variety
of locations worldwide, including: the United States, Berlin,
Koblenz and Magdeburg, Germany, Amsterdam, The Netherlands and
in various locations in Eastern Europe. Each of these archives
contains potentially valuable information to victims. Sotheby's
would, therefore, encourage a greater governmental commitment
to provide funding and resources to copy and organise these materials
and make them publicly available in one repository and on the
Internet.
41. Mediation. The claims in this field
are often complex. Whenever possible, Sotheby's has actively encouraged
independent mediation and discussion as opposed to litigation
to facilitate resolution of a claim. It has been Sotheby's experience
to find that when current possessors and victims elect to mediate
rather than litigate their respective claims, the process has
been more productive.
42. Spoliation Advisory Panel. Sotheby's
supports the creation of the Spoliation Advisory Panel as an alternative
to litigation of Nazi era claims in connection with property in
a UK national collection or a UK museum or gallery established
for the benefit of the public.
43. Database. Though not, as previously
mentioned, a complete solution, to this problem Sotheby's strongly
endorses a unified, international database that will facilitate
the research of provenance and provide a place for victims to
list lost items. The Art Loss Register has already made substantial
progress toward achieving this goal. However, Sotheby's is requesting
that more institutions, victims, collectors and governments both
submit available information to expand the existing ALR database
and more regularly search the database.
44. Lists of buyers and sellers. Sotheby's
already has a practice of obtaining and maintaining the names
and addresses of buyers and sellers. Sotheby's would support legislation
requiring all auction houses, fairs and dealers to maintain records
of the names and addresses of sellers and buyers. As always, such
information could be made available to appropriate interested
parties, subject to Sotheby's duties of agency and confidentiality,
or pursuant to applicable legal process, such as a court order.
May 2000
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