On Jan. 1, 2021, the U.S. Senate joined the House in voting to override President Trump’s veto of the National Defense Authorization Act of 2021 (NDAA), which includes several new
Continue Reading Implications for Art Dealers in Anti-Money Laundering Provisions of the National Defense Authorization Act of 2021

In response to concerns that poaching of African elephants is rapidly driving the species to extinction, the U.S. Fish & Wildlife Service (USFWS) issued Director’s Order No. 210, which tightened previous practice involving the import, export, and sale of African elephant ivory. The changes met with considerable resistance from a wide range of persons, including museum professionals, musicians, antiques dealers, and collectors. There has been not only consternation, but also confusion about what these changes mean for many transactions involving objects that may contain ivory components.  I have previously discussed these changes here and here.

To help provide some clarity on what precipitated these changes, what the changes are, and what impact they may have, I spoke with Craig Hoover, Chief of the U.S. Fish and Wildlife Service Wildlife Trade and Conservation Branch, for a brief Q&A.


Continue Reading U.S. Ivory Regulation: A Q&A with Craig Hoover, U.S. Fish & Wildlife Service

More than seven years is a long time to wait for a loaned painting to be returned. But after such a long wait, Sandro Botticelli’s Madonna and Child (1485) is being returned to its owner, Kraken Investments Limited (Kraken).   Kraken had consigned the painting to a gallery for sale, but the gallery’s bankruptcy intervened. For a time, it seemed that the painting would never be returned to Kraken, and that instead the gallery’s lender’s security interest would take priority, leaving Kraken within only an unsecured claim in the bankruptcy case. That dispute has only recently been resolved, with a reversal giving the Botticelli back to Kraken. [See Kraken Investments Ltd. v. Jacobs (In re Salander-O’Reilly Galleries, LLC), Case No. 14-cv-03544 (S.D.N.Y. Nov. 25, 2014)] It has been, for many, a cautionary tale.

Recent years have seen the collapse of several major art galleries, some from financial conflicts with lenders or other parties, other from shady business practices and outright fraud. Perhaps the most spectacular was the collapse of Salander O’Reilly Galleries, LLC (SOG). In 2007, SOG was facing numerous lawsuits alleging that SOG and its founder and principal Larry Salander (Salander) had double-pledged works, and had sold others but failed to pay their consignors the proceeds from the sales. Several of SOG’s creditors filed an involuntary bankruptcy petition against the gallery in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court), which was subsequently converted to a voluntary petition under chapter 11 of the Bankruptcy Code. At the time of the bankruptcy petition, SOG possessed more than 4,000 artworks, some of which it owned (in whole or in part), but many were not owned by SOG, and had been consigned to SOG by artists, artists’ estates, collectors, or other dealers. SOG’s victims included Earl Davis, who consigned more than 90 of his father, Earl Davis’s paintings (Davis v. Carroll) , Robert De Niro, Jr., who consigned 12 of his father, Robert De Niro, Sr.’s paintings, and John McEnroe, who had entered into a joint-ownership arrangement with Salander to acquire two paintings by Arshile Gorky, only to find himself a victim of double-dealing. The fall of SOG presents, in microcosm, almost every possible way in which a secured transaction, consignment or entrustment of art or cultural property can go awry, and it spurred amendments to the art consignment provisions of New York’s Art and Cultural Affairs Law. [1]


Continue Reading Botticelli’s ‘Madonna and Child’: The Risks of Art Consignment

InstrumentsBefore the new rule went into effect, objects at least 100 years old that are either made of African elephant ivory or included ivory components were exempt from the general Endangered Species Act (ESA) and Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) ivory prohibition.[1] This changed dramatically under the original version of the rule that was issued in February, which (i) wholly eliminated the antique exception for commercial transactions (i.e., sales), and (ii) retained the antique exception for non-commercial transactions only if the object has not been sold after Feb. 26, 1976. Recognizing that the “non-commercial movement of musical instruments and certain other CITES pre-Convention” objects are not “contributing to the poaching crisis or to illegal trade,” the service amended its earlier order.

As modified in May, the rule now allows qualified antiques to be imported for non-commercial purposes (loans, traveling exhibitions, etc.). However, no commercial importation of any African elephant ivory is allowed, even if those objects would otherwise qualify as antique.
Continue Reading U.S. Criteria for The Antique Exception to the Ivory Ban

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.
Continue Reading In love with Diego or Frida? A brief look at Mexican art regulations

The artist resale royalty right, what in Europe is often called the droit de suite, is a form of intellectual property right that allows primarily visual artists (who produce work in single objects or limited editions) with a right to receive a percentage of the purchase price when their works are resold. The resale royalty’s purpose is to allow artists to share in the increased value of their work over time. Each time a work is sold for a higher price than was originally paid for the work, a percentage of that sale price is required to be paid to the artist or the artist’s estate or heirs. Typically, the resale royalty falls within copyright law (and is provided for in the Berne Convention, Art. 14ter), and attempts to bring the visual artist’s rights into closer alignment with the rights of authors and recording artists, where the right to receive royalties is not cut off at the time of the original sale of a work or a copy. Although the droit de suite originated in France, it has been widely incorporated into copyright law in Europe and elsewhere. Currently, more than seventy countries provide in some measure for a resale royalty.1 However, it is not currently incorporated into U.S. copyright law. That may be changing.    
Continue Reading Droit de Suite: California Resale Royalty Revisited