Written by Hugo López Coll, Luis Torres and Guillermo Miranda*

It is impossible not to be deeply moved by Diego Rivera’s Vendedora de Alcatraces, Frida Kahlo’s incredible self-portraits, or José Clemente Orozco’s El hombre en llamas, all of which have become cornerstones of Mexican identity and cultural heritage. However, what people may not realize is that Mexico strictly regulates the exportation of such artworks.

Mexico has established a series of laws and regulations concerning the country’s cultural, artistic and anthropological heritage, including explicit references in the Mexican Federal Constitution, specialized laws and regulations, as well as standards published by institutes devoted to protect such heritage, like the National Institute of Anthropology and History (INAH) and the National Institute of Fine Arts (INBA).

To protect the country’s cultural heritage (including these 20th century masterpieces), Mexican presidents have issued a number of decrees over the last several decades, designating all the works of José Clemente Orozco, Diego Rivera, José María Velasco, and Gerardo Murillo Coronado (known as Dr. Atl) as “historical monuments.” Under Mexican law, historical monuments are regulated and maintained by the INAH. A designation as a historical monument carries obligations even for private owners of these works, requiring them to maintain specific levels of care, maintenance, and restoration of the works. A designation as a historical monument also requires that the works be retained in Mexico.

The Mexican government has also protected a large number of works by other artists by designating them as “artistic monuments.” This designation, which is overseen by the INBA, also requires owners of works so designated to certain care and restoration obligations and a prohibition on shipping such works out of the country. Many works by Frida Kahlo, David Alfaro Siqueiros, Remedios Varo, and others, have been designated as artistic monuments.

In recent years, steps have been taken toward producing a comprehensive census of Mexican cultural heritage, by establishing public registries where both artistic monuments and historical monuments are recorded. These registries are meant to assist in tracking these monuments and supervising their state of conservation.

Artistic monuments and historical monuments may only be exported from Mexico temporarily, for exhibitions or other cultural reasons. Before any such temporary export is approved, the exporter must obtain a special export permit issued by the INBA (for artistic monuments) or the INAH (for historical monuments), and must post a bond in favor of the Mexican federal treasury, to ensure the return and preservation of the artistic or historical monument.

Mexican law also imposes reporting requirements on the sale of artworks above a specific value. Under the Federal Law for Prevention and Identification of Transactions Involving Funds from Illegal Activities and used to Finance Terrorism (commonly known as the “Mexican Anti-Money Laundering Law”), the sale of any work of art having a value of at least 150,000 pesos (approximately US $13,000) is deemed to be a “vulnerable activity.” For such sales, each of the following reporting requirements must be met (i) the beneficiary of the sale (i.e., a buyer of a Diego Rivera painting) must be identified, (ii) all relevant documentation concerning the sale must be preserved, (iii) all relevant information about the sale must be made available to the applicable authorities, and (iv) the details of the sale must be reported to the Mexican Ministry of Finance and Public Credit.

The services of custom brokers and special custom clearance agents are also deemed to be “vulnerable activities” under the Mexican Anti-Money Laundering Law when the services are to have an artwork with a value of at least US $20,000 cleared through Mexican customs. As vulnerable activities, such customs clearance services trigger the same reporting obligations as art sales.

Understanding what restrictions apply to the sale and export of Mexican art has become all the more necessary as the prices paid for Mexican art at auction have risen dramatically, with Rivera paintings bringing as much as US $6 million. But there is a catch: although a buyer can purchase the painting, it must be enjoyed in Mexico, since it cannot leave the country. Buyers should also be aware that illegally exported art is considered contraband under Mexican law and may be criminally prosecuted.

Legal rules and restrictions may not be what an art collector wants to have to think about, but they must be taken into account when considering buying the work of a Mexican artist. Before taking the next step, it is wise for a collector to contact a legal expert to help them evaluate the best structure to acquire artwork and avoid unexpected restrictions on rights of ownership.

 *Not admitted to the practice of law.