London Art Market (Hansard, 20 April 1998)

§ Mr. Ian McCartney

The principal EU regulations and directives which affect the London art market are as follows:

Customs and VAT Directives Commission Regulation (EEC) No. 2454/93 which implements the Community Customs Code (Council Regulation (EEC) No. 92/2913, Council Regulation (EEC) No. 918/83, Council Directive 83/181/EEC and the Sixth VAT Directive (77/388/EEC) as amended by the Seventh VAT Directive (94/5/EC). Their effect is thus:

Commission Regulation (EEC) No. 2454/93 Article 682 suspends the payment of customs duty and import VAT for second-hand goods temporarily imported for sale by auction and also works of art, collectors' items, and antiques temporarily removed for exhibition, with a view to possible sale. Other measures include the following: Council Regulation (EEC) No. 3911/92 of 9 December 1992 on the export of cultural goods; Council Regulation (EC) No. 2469/96 of 16 December 1996 amending the Annex to Regulation (EEC) No. 3911/92 on the export of cultural goods; Council Directive 93/7 EEC of 15 March 1993 on the return of cultural objects unlawfully removed from the territory of a Member State; Directive 96/100/EEC of the European Parliament and of the Council of 17 February 1997 amending the Annex to Directive 93/7/EEC on the return of cultural objects unlawfully removed from the territory of a Member State. However, the latter two have not been used to date.

Council Regulation (EEC) No. 918/83 and Council Directive 83/181/EEC Article 51 of Regulation 918/83 and Article 79(r) of Directive 83/181 provide relief from customs duty and import VAT respectively, under certain conditions, for items imported by approved museums of galleries for their collections.

Sixth VAT Directive Article 16(E) enables relief from VAT on the sale of temporarily imported works of art and second-hand goods. Article 26a allows VAT on the sale of eligible works of art to be calculated by reference to the profit margin instead of the full sales value. Article 28 (I)a enables the UK to apply until 30 June 1999 an effective 2.5% VAT rate on the importation of works of art, collectors' items, or antiques which had been relieved from VAT before the implementation of the Seventh VAT Directive (94/5/EC). No further measures are anticipated in this area.

Copyright In the field of copyright, the principal measure is an amended proposal (still under negotiation) for a European Parliament and Council Directive on the resale right for the benefit of an author of an original work of art—Com (1998) 78 final. No further measures are anticipated in this area.

Sale of Consumer Goods A draft Directive on the sale of consumer goods and associated guarantees, which would harmonise at a minimum level consumers' sale of goods rights, is currently being negotiated. The Directive, unlike UK law, does not make any special provision for the liability of sellers at auction and could have an adverse effect on the sale of goods—including art and antiques—at auction. However, the UK is seeking a derogation that would allow Member States to exclude used goods sold at auction.

Trade in Endangered Species The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) controls international trade of specimens of species listed in its appendices—including antiques. In the EU, it is given legal force by Council Regulation EC No. 338/97 and Commission Regulation EC No. 939/97. These regulations set out the rules for the import, 510W export, re-export, sale and movement of species to which the controls apply. The regulation on trade is based on a system of permits and certificates which may only be issued where certain conditions are met. No further measures are anticipated in this area.