Nearly two decades have passed since more than 40 governments and many international non-governmental organizations gathered in Washington, DC, for the Washington Conference on Holocaust-Era Assets (the “Washington Conference”). The states attending that conference endorsed a set of 11 principles, known as the Washington Conference Principles, broadly calling upon states, institutions, individuals, and others to identify Nazi-confiscated art and to provide for the restitution of such art to its rightful owners or their heirs. I have discussed the context of the Washington Conference Principles here and here. Last fall, the Conference on Jewish Material Claims Against Germany issued a report, Holocaust-Era Looted Art: A Current World-Wide Overview, assessing (and largely critiquing) states’ efforts to implement the Washington Conference Principles. I have discussed that report here.
In recent weeks, two potentially important bills that would establish significant rights in favor of artists were re-introduced in the United States Congress. One, the Artist-Museum Partnership Act, would allow artists (as well as writers, composers, and others) to receive charitable tax deductions for donations of self-created work to museums, libraries, and other qualified charitable organizations. The other, the American Royalties Too (ART) Act, which is more controversial, would establish a federal artist’s resale royalty right, under which visual artists would receive a percentage royalty upon the resale of their work.
Iconoclasm and Looting
The recent destruction of sculptures and other objects in the Mosul Museum, as well as the ancient cities and archaeological sites of Nimrud, Hatra, and Dur Sharrukin by the Islamic State of Iraq and Syria (ISIS), sometimes also referred to as the Islamic State of Iraq and the Levant (ISIL), has been widely condemned. Many have identified the motivation behind the destruction as an ideology-driven iconoclasm. [UNESCO Director-General, Irina Bokova, condemned the destruction, noting that “the attack was in direct violation to the most recent Security Council resolution 2199 that condemns the destruction of cultural heritage and adopts legally-binding measures to counter illicit trafficking of antiquities and cultural objects from Iraq and Syria.” See “Iraq: UNESCO Outraged over Terrorist Attack against Mosul Museum,” UN News Centre, Feb. 26, 2015. To view a video of the destruction at the museum, see Ben Wedeman and Dana Ford, “Video Shows ISIS Militants Destroying Antiquities in Iraq,” CNN, Feb. 27, 2015. See also Kareen Shaheen, “Isis fighters destroy ancient artefacts at Mosul museum,” The Guardian, Feb. 26, 2015.] Continue Reading
This article is the second in a five-part series discussing the restitution, repatriation, and return of cultural objects. Each part addresses a different category of return. The first article in the series available here, addressed the restitution of stolen cultural objects. This article is the continuation of Part 1 and discusses developments in the restitution of cultural objects taken during World War II. The remaining articles address: (1) the restitution of illicitly excavated and/or illicitly exported cultural objects, (2) repatriation of tribal and indigenous cultural objects, and (3) the return of cultural objects removed during colonial occupation.
Museums’ Use of Technical Defenses: Von Saher and Beyond
The question of museums waiving defenses, as the AAM Standards suggest, has emerged as an important point of conflict in Nazi-era restitution cases. In a few instances, museums have filed quiet title actions against restitution claimants, asking courts to issue declaratory judgments that the museums have good title to the objects and/or the claimants’ rights have been lost due to statutes of limitations or laches. [See, e.g., Toledo Museum of Art v. Ullin, 477 F. Supp. 2d 802 (N.D. Ohio 2006); Detroit Inst. of Arts v. Ullin, No. 06-10333, 2007 WL 1016996, at *1 (E.D. Mich. Mar. 31, 2007); Museum of Fine Arts, Boston v. Seger-Thomschitz, Case No. 08-10097-RWZ, 2009 WL 6506658 (D. Mass. June 12, 2009); Museum of Fine Art v. Schoeps, 549 F.Supp.2d 543 (S.D.N.Y. 2008).] Such cases remain rare, and are controversial. [See, e.g., Grosz v. Museum of Modern Art, 772 F.Supp.2d 473 (S.D.N.Y. 2010); Simon J. Frankel and Ethan Forrest, “Museums’ Initiation of Declaratory Judgment Actions and Assertion of Statutes of Limitations in Response to Nazi-Era Restitution Claims – A Defense,” 23 DePaul J. Art, Tech. & Intell. Prop. L. 279, 281 (2013).] However, museums asserting statutes of limitations and laches defenses – what have become known as “technical defenses” – rather than allowing cases to be decided solely on the merits is not less controversial. 
This article is the second in a five-part series discussing the restitution, repatriation, and return of cultural objects. Each part addresses a different category of return. The first article, available here, addressed the restitution of stolen cultural objects. This article discusses developments in the restitution of cultural objects taken during World War II. The remaining articles address: (1) the restitution of illicitly excavated and/or illicitly exported cultural objects, (2) repatriation of tribal and indigenous cultural objects, and (3) the return of cultural objects removed during colonial occupation.
Although it may seem counter-intuitive, some of the most important developments in the restitution of cultural objects and other assets confiscated in the period surrounding World War II have occurred only within the last decade or so. Some restitution was done, of course, at the conclusion of the war. The cultural objects that the Allied forces recovered were returned to the countries from whose citizens or museums they had been taken (in a process known as “external restitution”), for those countries to then return to their owners (“internal restitution”). However, those actions were complicated by the loss of people, records, communities, and communal memory. They were also complicated, prevented, or delayed by the resistance of governments and legal systems to adequately address the question of restitution, as well as a variety of political complications, not least of which was the Cold War, which locked people, cultural objects, and information behind the Iron Curtain. It took a combination of the end of Communism (with the unlocking of museums and archives in the former Soviet territories), the publication of pioneering studies of Nazi-era looting, and the persistent efforts of organizations like the Claims Conference and the World Jewish Congress to raise public awareness of the continuing problem of restitution. The statements of principles, statements of ethics, settlements, and court decisions have produced (and continue to produce) a profound change in the art trade and museum practice with respect to the understanding and treatment of confiscated and duress sale cultural objects. These efforts have produced an on-going reassessment of the question of restitution, whose effects will be felt in many other restitution contexts as well.
An important and frequently misunderstood development in the law of art and cultural property in recent decades has been the elaboration in national laws, international instruments, and customary international law of the rights of individuals, groups, nations or other entities to obtain the return of cultural objects that were taken from them, their ancestors or predecessor, or their territory at some point in the past. I have previously discussed differing views on the repatriation of certain types of cultural property and the discussion is available here. This article is the first in a five-part series discussing restitution, repatriation, and return of cultural objects. Each part addresses a different category of return: (1) restitution of stolen cultural objects, (2) restitution of cultural objects taken during World War II, (3) restitution of illicitly excavated and/or illicitly exported cultural objects, (4) repatriation of tribal and indigenous cultural objects, and (5) the return of cultural objects removed during colonial occupation.
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.
Written by William E. Keenen
Under U.S. law, a tax generally is imposed whenever one individual gratuitously transfers an interest in property to another. This tax is computed on the value of the property interest transferred, whether during one’s life (to which the gift tax applies) or at one’s death (to which the estate tax applies). In some instances, a discount in the value of an interest in property may be taken by a donor or the executor of an estate when filing a gift or estate tax return, as the case may be. The 5th Circuit Court of Appeals recently decided Estate of Elkins v. Commissioner [767 F.3d 443 (5th Cir. 2014)] in which the court considered discounts to establish the value of fractional interests in artwork.
When James Elkins, son of the founding partner of the Vinson and Elkins law firm, died, he owned fractional interests in 64 very valuable works of art. Mr. Elkins and his wife had accumulated the artwork over the course of their marriage, which constituted the couple’s community property under the laws of Texas, where they resided during their marriage. Prior to Mr. Elkins’ death, the artwork had been maintained in his home, his office, the homes and offices of his children as well as on display in various public places. Mr. and Mrs. Elkins each settled a so-called grantor retained income trust (a GRIT) to which each of them transferred his or her respective interests in three works of art, which the Tax Court termed the “GRIT Art”. The other 61 pieces, which, for the reasons discussed next, were referred to by the Tax Court as the “Disclaimer Art”, were owned outright by Mr. and Mrs. Elkins.
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. 
Before 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. 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