Published by Lexology at https://www.lexology.com/library/detail.aspx?g=46e0b90e-9c7a-4aa3-96da-76fc961bf120 on 13 March 2019
Buying and selling
Passing of title
When does ownership of art, antiques and collectibles pass from seller to buyer?
According to article 1376 of the Italian Civil Code (ICC), ownership of movable art, antiques or collectibles is transferred from the seller to the buyer when the parties enter into a sale agreement. There are no formalities required for finalising the sale agreement of a movable good.
It is customary in the Italian art market that art sale agreements are made with retention of title, which means that the title passes to the buyer when the seller has received full payment of the sale price in cash or cleared funds.
Implied warranty of title
Does the law of your jurisdiction provide that the seller gives the buyer an implied warranty of title?
Article 1476, paragraph 1(2) of the ICC provides that sellers must warrant that they are the owners or have been legitimately authorised by the owners to sell the asset.
Pursuant to article 1483 of the ICC, the seller shall warrant the buyer against dispossession. If the buyer is dispossessed by a third party, he or she is entitled to rescind the contract if he or she had ignored in good faith that the seller did not own the purchased item when he or she entered into the contract. Furthermore, he or she is entitled to the reimbursement of the price paid, the expenses borne in relation to the purchased asset (including restoration expenses) and the damages suffered as a result of the dispossession (article 1479, ICC).
The parties may agree that the seller limits or excludes the warranty of title, but the seller always remains liable if the buyer suffers dispossession as a result of the seller’s misconduct.
If a third party sues the buyer alleging that it is the owner of the asset, the buyer can file a third-party complaint against the seller. If he or she fails to do so and an irrevocable judgment by a court orders him or her to release the purchased asset to the third party, he or she no longer has a warranty of title against the seller, if the latter proves that there was a sufficient ground to dismiss the dispossession claim.
The warranty of title claim limitation period is 10 years (article 2946, ICC) and commences from the date the dispossession is confirmed by an irrevocable judgment (Cassation Court, 10 January 1997, No. 184).
Can the ownership of art, antiques or collectibles be registered? Can theft or loss of a work be recorded on a public register or database?
There is no public register of movable goods, including art, antiques and collectibles.
There is a public register of lost and stolen artworks managed by the art protection and enforcement unit of the carabinieri, which is accessible online.
Good-faith acquisition of stolen art
Does the law of your jurisdiction tend to prefer the victim of theft or the acquirer in good faith of stolen art?
Under Italian law, a good-faith acquirer is preferred to the victim of the theft. According to article 1153 of the ICC, if a person acquires a movable asset from a person who is not the owner, ownership passes to the acquirer, provided that: (i) the acquirer is in good faith and acquires the possession of the good; and (ii) the ownership is transferred pursuant to a contract that provides for the transfer of title from one party to the other (eg, sale agreement, donation).
The good faith of the acquirer is presumed and the burden of proving his or her bad faith vests with the claimant.
If the acquirer is in good faith but the asset was not acquired pursuant to a contract that provides for the transfer of title from one party to the other (eg, a loan agreement), the ownership of the asset shall vest in the acquirer after 10 years of uninterrupted possession (article 1161, paragraph 1, ICC).
If the acquirer is in bad faith, he or she shall become the owner of the asset after 20 years of uninterrupted possession (article 1161, paragraph 1, ICC).
The above principles do not apply to assets that were either stolen or illegally removed from the state’s or other public entities’ collections: no one can ever acquire the ownership of an asset that was part of the state’s (or other public entities’) patrimony and was either stolen or otherwise illicitly disposed of by a public officer. The same exception applies to art, antiques or collectibles belonging to ecclesiastical entities (article 828, ICC).
In a case regarding two paintings illegally sold by a priest in charge of a church in Tuscany to a dealer, who then resold them to a lawyer, the Cassation Court held that the lawyer could not legitimately claim that he had acquired ownership of the paintings (Cassation Court, 7 April 1992, No. 4260).
Acquiring title to stolen art through prescription
If ownership in stolen art, antiques or collectibles does not vest in the acquirer in good faith, is the new acquirer protected from a claim by the victim of theft after a certain period?
See question 4.
Can ownership in art, antiques or collectibles vest in the acquirer in bad faith after a period?
Pursuant to article 1161, paragraph 2 of the ICC, the bad-faith acquirer of a movable asset who has maintained its possession for an uninterrupted period of 20 years becomes the rightful owner of that asset. However, if the possession was acquired by means of duress or in a clandestine fashion, the period will start running from the date the duress or the secret possession has ceased (article 1163, ICC).
The above principle does not apply to goods that were either stolen or illegally removed from the state’s or other public entities’ collections (see question 4).
Risk of loss or damage
When does risk of loss or damage pass from seller to buyer if the contract is silent on the issue?
Normally, the risk of loss or damage lies with the actual owner of the lost or damaged asset.
If the contract is silent on the issue, the risk is passed on to the buyer when the contract is entered into, regardless of whether the asset was delivered to the buyer or the latter had paid the purchase price (article 1465, paragraph 1, ICC).
However, if the sale was agreed upon with retention of title and the asset was delivered to the buyer, the risk passes to him or her at the time of delivery, even if he or she has not yet become the owner of the asset (article 1523, ICC). In contrast, if the transfer of title is subject to a condition precedent and the asset is lost when the condition precedent has not occurred, the risk remains with the seller (article 1465, last paragraph 4, ICC).
If the asset needs to be shipped by the seller to the buyer, the former is released from any obligations related to the asset (and, consequently, to the risk of loss or damage) at the time of delivery to the shipping agent (article 1510, paragraph 2, ICC).
Must the buyer conduct due diligence enquiries? Are there non-compulsory enquiries that the buyer typically carries out?
In addition to the general obligation of the parties to negotiate the contract in order to finalise in good faith (article 1337, ICC), the buyer does not have specific due diligence enquiry obligations.
However, it is customary for buyers (or their professional agents) to verify the following aspects before entering into a sale contract:
- provenance of the artwork, including checking the Carabinieri database on stolen artworks or the Art Loss Register;
- whether or not the asset was declared to be of cultural interest by the state;
- documents on authenticity or attribution; and
- physical condition of the asset.
Must the seller conduct due diligence enquiries?
In addition to the general obligation of the parties to negotiate the contract in order to finalise in good faith (article 1337, ICC), the seller does not have due diligence enquiry obligations.
Other implied warranties
Does the law provide that the seller gives the buyer implied warranties other than an implied warranty of title?
Sellers must warrant that they are the owners or have been legitimately authorised by the owners to sell the asset (article 1476, paragraph 1(2), ICC).
In addition to the implied warranty of title (see question 2), a general rule on sale contracts provides that sellers must guarantee that the asset does not have defects that would make it inadequate for its designated use or may significantly reduce its value, and has the qualities promised in the contract or those that are necessary for its designated use (article 1490 et seq., ICC). False provenance or misattribution may be considered as a ‘defect’ under the general rule.
The above guarantees may be waived or limited, although any waiver or limitation of the warranty would not apply if the seller has intentionally or by gross negligence not disclosed defects or has not highlighted an absence of certain qualities of the assets (article 1229, ICC).
If the contract is silent, the buyer must denounce the defects and the absence of certain qualities within eight days of his or her discovery. The warranty claim is time-barred once one year has elapsed from the delivery date.
According to article 64 of Legislative Decree No. 42 of 22 January 2004 (the Cultural Heritage Code (CHC)) professional sellers must deliver to their clients a certificate of authenticity and provenance of the asset or, in the absence of this, a declaration (possibly printed on a photograph of the asset) on any available information on the authenticity or possible attribution and provenance of the asset.
Voiding purchase of forgeries
If the buyer discovers that the art, antique or collectible is a forgery, what claims and remedies does the buyer have?
The buyer has the following options for claims and remedies if he or she discovers that the art, antique or collectible that he or she bought is a forgery:
- Rescission of the contract based on alleged defects of the purchased asset (article 1490 et seq., ICC) (see question 10); the claim is time-barred if the defect was not communicated to the seller within eight days of its discovery and one year after delivery of the good to the buyer.
- Rescission of the contract based on alleged lack of promised or essential qualities (article 1497, ICC); the claim is time-barred if the defect was not communicated to the seller within eight days of its discovery and one year after delivery of the good to the buyer. The absence of required qualities must exceed the limits of tolerance that are established by general use.
- Termination of the contract based on a situation in which the asset sold is different to the asset promised in the contract (article 1453, ICC). The claim is time-barred once 10 years have elapsed from the date of the sale.
- Annulment of the contract based on mutual mistake or wilful misconduct (articles 1429 and 1439, ICC). The claim is subject to the statute of limitation of five years commencing from the date the mistake or the wilful misconduct is discovered by the claimant.
Voiding inadvertent sales of works by masters
Can a seller successfully void the sale of an artwork of uncertain attribution subsequently proved to be an autograph work by a famous master by proving mistake or error?
A seller can request that the sale of an artwork of uncertain attribution subsequently proven to be an autograph work by a famous master be declared void by proving mistake. In 1998, the Cassation Court held that the seller of a fifteenth-century wooden statue attributed to an unknown master from Siena at the time of the sale to the state and later re-attributed to Jacopo della Quercia could be voided to the benefit of the seller (Cassation Court, 2 February 1998, No. 985).
Export and import controls
Are there any export controls for cultural property in your jurisdiction? What are the consequences of failing to comply with export controls?
Pursuant to articles 10 and 65 of the CHC, the following categories of goods cannot be exported on a permanent basis from Italian territory:
- goods with an artistic, historical, archaeological and ethno-anthropological interest owned by the state (or other public entities) and non-profit private organisations made by deceased artists more than 70 years ago; and
- privately owned goods made by deceased artists more than 70 years ago, provided that they were classified as cultural goods by the Ministry of Cultural Heritage (the Ministry).
Privately owned goods of cultural interest that were made more than 70 years ago by a deceased artist and have a monetary value of more than €13,500 may be exported on a permanent basis from Italy if the competent export office of the Ministry grants an export permit.
Export control is carried out at a local level by the 18 export offices located in Italy.
The export permit is called a free circulation certificate (article 68, CHC) if the goods have to be sent to an EU member state. If the goods need to be exported outside the European Union, in addition to the free circulation certificate, the export office must issue an export licence (article 74, CHC).
To obtain an export permit, the interested party must file an export licence request and physically submit the goods to the export office.
The export office can either issue an export permit or deny it, if it considers that the goods have particular cultural significance.
In granting export licences, the export offices must follow the criteria set forth by the Ministry on 6 December 2017. These criteria refer to the aesthetic quality of the goods, their rarity, their provenance from a relevant collection and their historic relevance, which gives wide discretion to the export offices.
The export office generally concludes the proceeding within 40 days of the date the goods are presented to it, but this time frame is not mandatory.
If the export permit is denied, the interested party is entitled to file a petition within 30 days of the date of service of the denial to the Ministry’s General Director. Within 60 days of the date of service of the Director’s decision, the interested party may file a complaint against the decision confirming the export denial before the competent administrative regional tribunal. The administrative tribunal will not assess whether the goods have particular cultural significance, but whether the public administration correctly applied the law and made appropriate use of its discretionary power (eg, by providing adequate motivation to the export denial, based on thorough art historical research).
If a person wants to export artwork made by a living artist, artwork of a non-living artist that is less than 70 years old or artwork that is more than 70 years old and worth less than €13,500, he or she does not need an export permit, but must file a unilateral declaration detailing the work, the author and the year of creation. The declaration must be filed through the online system available on the website of the Ministry to the competent export office, which shall acknowledge receipt of the declaration by applying a stamp and delivering the original to the interested party.
However, if the export office deems that an artwork by a deceased artist that is between 50 and 70 years old, for which a unilateral declaration was filed, has exceptional cultural significance for the completeness and integrity of the cultural patrimony of Italy, it can request that the General Director of the Ministry classifies the artwork as cultural property and, consequently, the export of that artwork will be prohibited.
The violation of export control provisions results in the following sanctions: an administrative fine from €77.50 to €465 (article 165, CHC) and one to four years’ imprisonment or a criminal fine from €258 to €5,165 (article 174, CHC).
The judge may also order the forfeiture of the artwork, unless it belongs to a person who is not involved in the crime (article 174, CHC).
Import controls Export and import tax
Does any liability to pay tax arise upon exporting or importing art, antiques or collectibles?
Exporting art, antiques or collectibles is not subject to any tax.
Pursuant to article 36 et sequitur of Legislative Decree No. 41 of 23 February 1995, a rate of 10 per cent value added tax (VAT) applies to the import of artworks (the ordinary rate is 22 per cent).
The import of artworks that are wholly handmade by the artist and that have up to eight sculpture casts (made with supervision of the artist or his or her heirs) is subject to the reduced VAT rate of 10 per cent.
Pursuant to article 250 of EU Regulation No. 950 of 9 October 2013, it is possible to apply the regime of temporary admission, which grants a total or partial exemption from import tax (eg, in case of import for expositions, exhibitions and art fairs).
Direct and indirect taxation
Outline the main types of tax liability arising from ownership and transfer of art, antiques and collectibles.
In Italy there is no wealth tax based solely on the possession of art, antiques and collectibles.
Private sales of art, antiques and collectibles are not subject to a capital gains tax. If a sale is made by a professional dealer, he or she will be subject to income tax.
The inheritance and gift tax varies depending on the degree of kinship between the deceased and his or her heirs: for the spouse and lineal relatives, 4 per cent of the total value of the inherited goods in excess of the threshold of €1 million for each of the heirs; for each of the siblings the tax rate is 6 per cent of the total value in excess of €100,000; for other relatives within the fourth degree of kinship the rate is 6 per cent; and for any other subjects the rate is 8 per cent. There is no de minimis threshold in the last two instances.
Goods classified as cultural property are exempted from inheritance and gift taxation.
VAT only applies to sales involving a professional seller, for which the rate is 22 per cent. If the artist or his or her heirs are the sellers, the rate is reduced to 10 per cent.
Outline any tax exemptions or special conditions applicable to art, antiques and collectibles.
There are tax exemptions and special conditions applicable to art, antiques and collectibles. A margin VAT scheme is applicable to sales of used goods. Article 40-bis of Legislative Decree No. 41/1995 introduced a special regime for auction companies acting as intermediaries in the secondary market and operating in their own name and on behalf of the seller. The tax base is the hammer price minus the seller’s commission.
Notified cultural goods are not subject to taxation. There is no tax on transfers to the state and other public entities, private foundations and recognised non-profit organisations.
Law No. 106 of 29 July 2014 introduced a tax credit for three consecutive tax years on donations made by private individuals or companies by means of traceable payment instruments for maintenance, protection and restoration of cultural goods belonging to public entities, for support to cultural sites belonging to public entities.
Borrowing against art
Types of security interest
In your jurisdiction what is the usual type of security interest taken against art, antiques and collectibles?
Art, antiques and collectibles, as with all movable goods, may be pledged as collateral to secure a loan (article 2784, ICC).
If the borrower borrowing against art assets in your jurisdiction qualifies as a consumer, does the loan automatically qualify as a consumer loan, and are there any exemptions allowing the lender to make a non-consumer loan to a private borrower?
If the borrower qualifies as a consumer (ie, as a natural person who is acting for purposes that are outside his or her trade, business or profession) and the credit agreement falls within the scope of the Consumer Credit Directive (2008/48/EC), transposed into Italian law by Legislative Decree No. 141 of 13 August 2010, the loan automatically qualifies as a consumer loan.
Consumer credit provisions do not apply, inter alia, to loans to natural persons for an amount exceeding €75,000 (article 122, paragraph 1(a) of Legislative Decree No. 385 of 1 September 1993).
Register of security interests
Is there a public register where security interests over art, antiques or collectibles can be registered? What is the effect of registration? Is the security interest registered against the borrower or the art?
There is no public register for security interests over art, antiques or collectibles as collateral for loans.
However, Law No. 119 of 30 June 2016 introduced the possibility for professional dealers to create non-possessory liens to secure credits related to their business activity (which are not private loans). This lien must be registered in the online register managed by the Revenue Agency of the Ministry of Economy and Finance.
Non-possessory security interests Sale of collateral on default
If the borrower defaults on the loan, may the lender sell the collateral under the loan agreement, or must the lender seek permission from the courts?
Lenders can sell the collateral and do not need to obtain a court’s permission. However, prior to selling the pledged item, the creditor must serve a demand notice on the pledger requesting payment within five days of the service date. If no payment is made, the creditor is entitled to sell the collateral at a public auction under the court’s supervision. Article 2797 of the ICC provides that the parties to a collateral agreement may agree that the sale can be carried out by a private auction company.
Ranking of creditors
Does the lender with a valid and perfected first-priority security interest over the art collateral take precedence over all other creditors?
According to article 2748 of the ICC, the lender with a valid and perfected first-priority security interest takes precedence over the other creditors.
Intellectual property rights
Does copyright vest automatically in the creator, or must the creator register copyright to benefit from protection?
Copyright vests automatically in the creator without the need to register (article 6 of Law No. 633 of 22 April 1941 - the Italian Copyright Law (ICL)). In order to establish the date of creation in case of dispute on conflicting copyrights, it is advisable to deposit a photograph of the copyrighted work with the Italian Society of Authors and Publishers (SIAE) or a notary public.
What is the duration of copyright protection?
Copyright protection lasts for 70 years after the death of the author (article 25, ICL).
Display without right holder's consent
Can an artwork protected by copyright be exhibited in public without the copyright owner’s consent?
Artists have the right to publish their work and this right includes the right to exhibit their creation in a public venue (article 12, ICL).
It is questionable whether this right should prevail over the owner’s right to exhibit his or her artwork. Owners have the full and exclusive right to enjoy and dispose of their property, within the limits established by law (article 832, ICC). It could be argued that when the artist has sold his or her work to a collector, especially if this has occurred during a fair or an exhibition, his or her right to publish the work is exhausted. However, the artist could always try to enforce his or her moral right in case his or her artwork is exhibited in a manner or venue that he or she considers detrimental to his or her honour or reputation (see question 28). Furthermore, the copyright holder’s consent is always required for reproductions of the artist’s work in catalogues and marketing material related to an exhibition.
Owners and exhibition curators should not be considered liable if they fail to secure the artist’s consent prior to an exhibition, although it is customary and advisable to obtain to do so.
Reproduction of copyright works in catalogues and adverts
Can artworks protected by copyright be reproduced in printed and digital museum catalogues or in advertisements for exhibitions without the copyright owner’s consent?
The copyright owner’s consent always needs to be obtained for the reproduction of artworks in printed and digital museum catalogues or in advertisements for exhibitions.
An exception is provided in article 70 of the ICL for low-resolution reproductions, whose publication on the internet is permitted for non-profit, scientific and educational purposes, although the entry into force of the exception is subject to an implementing decree defining the meaning of scientific and educational purposes, which has not been enacted yet.
Copyright in public artworks
Are public artworks protected by copyright?
Public works are protected by copyright. In Italy there is no copyright exception allowing reproduction of public monuments (ie, freedom of panorama; see article 5, paragraph 3(h) of Directive 2001/29/EC).
Street art is also subject to copyright, although most cases involving street artists have been criminal law cases, where the artist faced criminal liability based on the specific offence consisting of damaging or spoiling a public space or private property (article 639, ICC).
Artist's resale right
Does the artist’s resale right apply?
The artist’s resale right (ARR) is provided by articles 144 et seq. of the ICL (implementing Directive 2001/84/EC) and is an inalienable right, which cannot be waived, even in advance, to receive a royalty based on the sale price obtained for any resale of the work, subsequent to the first transfer of the work by the author.
The ARR applies to all acts of resale involving sellers, buyers or intermediaries who are art market professionals, such as auction companies, art galleries and, in general, any dealers in works of art.
The ARR lasts for 70 years after the death of the artist, and its beneficiaries are the artists and their heirs. It is granted to Italian artists or non-EU artists residing in Italy; EU nationals; and citizens of a third country, provided the laws of that country recognise the same right applicable to Italian nationals.
The ARR is set at the following rates:
- 4 per cent for the portion of the sale price up to €50,000;
- 3 per cent for the portion of the sale price from €50,000.01 to €200,000;
- 1 per cent for the portion of the sale price from €200,000.01 to €350,000;
- 0.5 per cent for the portion of the sale price from €350,000.01 to €500,000; and
- 0.25 per cent for the portion of the sale price exceeding €500,000.
The total amount of the royalty may not exceed €12,500. The ARR does not apply if the sale price is lower than €3,000.
According to article 144, paragraph 3 of the ICL, the ARR shall not apply to acts of resale where the seller has acquired the work directly from the author less than three years before the resale and where the resale price does not exceed €10,000.
Although article 152 of the ICL provides that the ARR should be charged to the seller, following the European Court of Justice judgment of 26 February 2015 (Case C-41/14, Christie’s France SNC v Syndicat national des antiquaires), the prevailing interpretation of article 152 of the ICL is that the parties to the sale contract may provide that the ARR vests in the buyer.
The Society of Authors and Publishers is the only entity entitled to collect the ARR and pay it to the right holder.
What are the moral rights for visual artists? Can they be waived or assigned?
Pursuant to article 20 et seq. of the ICL moral rights are the rights to claim authorship of the work and object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, that would be prejudicial to the artist’s honour or reputation.
Moral rights are perpetual and, after the death of the author, can be enforced by the spouse, the children or, in their absence, the parents or the lineal descendants or, in their absence, the siblings and their descendants.
Moral rights cannot be waived or assigned (article 22, ICL).
Accounting to the principal
Does the law require the agent to account to the principal for any commission or other compensation received by the agent while conducting the principal’s business?
Pursuant to article 1713 of the ICC, the agent is required to account to the principal for any commission or other compensation received by him or her while conducting the principal’s business.
Disclosed agent commission
Does disclosure to the principal that the agent will receive a commission allow the agent to keep the commission unless the principal objects?
The parties are free to negotiate whether the agent is entitled to receive the sale proceeds from the buyer and withhold his or her commission from that amount (which is customary), or whether the commission shall be paid directly by the principal. Any amount that the agent receives (including from the buyer) or pays (eg, to an introducer) should be adequately disclosed to the principal.
Undisclosed agent commission
If a third party pays a commission to an agent that is not disclosed to the principal, can the principal claim the commission from the third party?
The principal does not have a claim against a third party, which may have paid a commission to the agent, as long as the payment of that commission did not cause damage to the principal. For example, the agent may have introduced the principal to auction company A (which paid the commission), although auction company B offered a better deal to the principal. In such a case, the principal could sue both the agent and the auction company.
Protection of interests in consigned works
How can consignors of artworks to dealers protect their interest in the artwork if the dealer goes into liquidation?
In case of a voluntary liquidation, the consignor may request immediate restitution of the consigned work and obtain a restitution order pursuant to article 633 of the Italian Civil Procedure Code.
In case of bankruptcy or other reorganisation proceedings, a court-appointed administrator or trustee will prepare an inventory of the dealer’s assets and an inventory of the third party’s assets in consignment.
Dealers are obliged to list in a register all the works they have on consignment (article 120 of Royal Decree No. 773 of 18 June 1931) but that register is not available online.
The register will be used by the court-appointed administrator or trustee to process the restitution claims filed by consignors (see articles 87 and 103 of the Italian Bankruptcy Law).
Are auctions of art, antiques or collectibles subject to specific regulation in your jurisdiction?
There are no specific regulations for auctions of art, antiques or collectibles in Italy.
May auctioneers in your jurisdiction sell art, antiques or collectibles privately; offer advances or loans against art, antiques or collectibles; and offer auction guarantees?
Auctioneers are allowed to sell art, antiques or collectibles privately.
Offering advances or granting loans or other credit facilities are activities reserved for financial institutions subject to the supervisory control of the Bank of Italy. Likewise, auction companies cannot guarantee the payment of a hammer price to a consigner for a fee.
Irrevocable bids from bidders who will be compensated in the event that their bid is not successful are permitted.
Spoliation during the Nazi era
Claims to Nazi-looted art
In your jurisdiction, in what circumstances would the heirs of the party wrongly dispossessed typically prevail over the current possessor, if a court accepts jurisdiction and applied local law to a claim to art lost during the Nazi era?
There are no specific provisions currently in force in Italy regulating claims to art lost or looted during the Nazi era in Italy.
General provisions regarding private ownership and acquisition of movable goods as a result of uninterrupted possession for a period corresponding to the statutory provisions (see questions 4, 5 and 6) would regulate these claims.
Is there an ad hoc body set up to hear claims to Nazi-looted art?
Lending to museums
Responsibility for insurance
Who is responsible for insuring art, antiques or collectibles loaned to a public museum in your jurisdiction?
Public museums normally provide all risks nail-to-nail insurance coverage to art, antiques or collectibles exhibited at their premises. The insurance premium is paid by the borrowing institution.
As an alternative to private insurance coverage, the Italy offers an indemnity covering the risks of loss and damage related to privately owned goods declared to be of cultural interest to be shown in exhibitions promoted by the Ministry of Cultural Heritage in Italy or with the support of other public entities.
Immunity from seizure
Are artworks, antiques or collectibles loaned to a public museum in your jurisdiction immune from seizure?
There is no legislation on immunity from seizure.
Is there a list of national treasures?
There is no list of national treasures accessible by the public. As the Italian heritage law (Law No. 364 of 20 June) dates back to 1909 and there is no central database listing all classified artworks, even the state itself does not have an accurate knowledge of the art, antiques and collectibles that have been declared to be of cultural interest.
The main consequences arising from an object that is declared to be of cultural interest are the following: (i) the work cannot be permanently exported from Italy; (ii) the state has a pre-emption right in any sale transaction regarding a work classified as cultural property; (iii) the state must be notified of any event regarding a ‘notified’ work (eg, succession or relocation of the work following the owner’s move to a different home); and (iv) any restoration must be authorised in advance by the state.
Although the above consequences significantly affect the owner’s rights, there is no compensation if an object is declared to be of cultural interest.
Right of pre-emption
If the state is interested in buying an artwork for the public collections, does it have a right of pre-emption?
According to article 61 of the CHC the state has a right of pre-emption when a classified artwork is sold.
Both the seller and the buyer (or the intermediary on their behalf) must inform the local office of the Ministry of Cultural Heritage of the sale and provide all the details (including the price of the artwork) within 30 days of the sale date. Within the following 60 days, the state must communicate whether it intends to buy the artwork at the same price as the sale.
Pending the 60-day time frame, the sale contract is subject to the condition precedent that the state will not exercise its pre-emption right and the artwork must not be delivered to the buyer. The payment of the sale price, as well as the buyer’s premium and all other costs associated with the sale (such as the ARR), are suspended.
If the state exercises its pre-emption right, it will only pay the sale price and will not be obliged to pay the buyer’s premium and all other costs associated with the sale.
If the state does not exercise its pre-emption right, the sale between the original parties will become effective.
Automatic vesting in the state
In what circumstances does ownership in cultural property automatically vest in the state?
There is a presumption of the state’s ownership for archaeological objjects discovered after 1909.
If the owner is not able to prove that the archaeological object in his or her possession was found or purchased before 1909, the state’s ownership of it is established.
Illegally exported property claimed by foreign states
How can a foreign state reclaim in your jurisdiction cultural property illegally exported from its territory?
Pursuant to article 77 of the CHC (implementing Directive 2014/60/EU), EU member states are entitled to a restitution claim aimed at repatriating cultural property that was illegally exported from the territory of the requesting member state.
The claim must be filed before the court that has jurisdiction over the place where the cultural property is located. The claim may not be brought (i) more than one year after the competent central authority of the requesting member state became aware of the location of the cultural property and of the identity of its possessor or holder; and (ii) more than 30 years after the object was unlawfully removed from the territory of the requesting member state.
The procedure is regulated by the Italian lex fori. The requesting member state must submit as exhibits to the complaint: a document describing the property and qualifying it as cultural property; and a declaration by the competent authority of the requesting state with regard to the illicit export from the national territory.
The statement of claims must be served on the possessor of the property and the Ministry of Cultural Heritage.
According to article 79 of the CHC, the competent court may order that fair and equitable compensation be paid to the bona fide possessor of an illegally exported cultural object.
Italy ratified the following international conventions related to the export of cultural property:
- 2001 UNESCO Convention on the Protection of Underwater Cultural Heritage;
- 1972 UNESCO Convention concerning the Protection of World Cultural and Natural Heritage;
- 1969 European Convention on the Protection of Archaeological Heritage;
- 1954 European Cultural Convention; and
- 1954 UNESCO Convention on the Protection and Promotion of the diversity of Cultural Expression.
Italy has also entered into a number of bilateral agreements, including the following:
- 2008 Bilateral Agreement between Italy and Switzerland on the import and repatriation of cultural property; and
- 2001 Memorandum of understanding on import restrictions of archaeological material to fight art trafficking between Italy and the United States (amended in 2006).
What are the anti-money laundering compliance obligations placed on the art trade?
The Fourth Anti-Money Laundering Directive (AMLD) has been transposed into Italian national law by Legislative Decree No. 90 of 25 May 2017, which amended Legislative Decree No. 231 of 21 November 2007 (AML).
Art galleries, antiquities dealers and auction houses are specifically listed among the ‘other non-financial operators’ that are subject to AML obligations (article 3, paragraph 5).
The AML requires that art market professionals comply with the following obligations:
- carry out adequate customer due diligence by identifying the customer and the beneficial owner (article 17 et seq., AML);
- conduct ongoing monitoring of the business relationship, which encompasses scrutiny of transactions undertaken throughout the course of the relationship to ensure that the transactions being conducted are consistent with the knowledge of the customer and the business and risk profile, including where necessary the source of the funds and ensuring that the documents, data or information held are kept up to date (article 19, AML);
- store documents, data and information on possible money laundering activities (article 31, AML);
- communicate the suspect transactions to the Financial Intelligence Unit at the Bank of Italy (article 35, AML); and
- a prohibition to communicate to the interested client or third party information on the communication of the suspect transaction (article 39, AML).
The Ministry of Economy and Finance, based on a proposal by the Financial Security Committee, may exempt persons engaged in a financial activity on an occasional or very limited basis where there is a low risk of money laundering or terrorism financing (article 4, paragraph 3, AML).
Is your jurisdiction a party to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)?
Italy ratified the CITES Convention through Law No. 150 of 7 February 1992, which is enforced by the Ministry of the Environment. The Ministry of Economic Development is in charge of export and import licences. The carabinieri and Guardia di Finanza (military enforcement units) both have competence to control the enforcement of the Convention and EU and Italian provisions on environmental protection.
Is the sale, import or export of pre-CITES endangered species subject to a licence?
A CITES permit must be requested from the Ministry of Economic Development for the export or import of pre-1947 worked endangered species. The permit is normally issued 30 days after the filing date. In case of import, the applicant should submit the export permit issued by the third country of origin and evidence that the work was legally purchased.
For more details, see www.mise.gov.it/index.php/en/cites-convention-on-flora-and-fauna.
Is the sale, import or export of post-CITES worked or antique endangered species authorised? On what conditions?
Yes; if approved, an import or export licence will be released within 30 days from the date of the request. This term is suspended if the National Scientific Committee has not released an opinion. Foreign CITES authorities may also be consulted by the Italian issuing authority.
Specific endangered animal products
Are there any special rules for works of art made of elephant ivory, rhino horn or other specific endangered animal products?
There are no special rules for works of art made of elephant ivory, rhino horn or other specific endangered animal products.
In what circumstances may consumers cancel the sale of art, antiques or collectibles?
Consumers may avail themselves of the remedies set forth by the general provision of the ICC if the sale was of a forgery (see question 11).
Furthermore, consumers are entitled to withdraw, without giving a reason, from the sale of art, antiques or collectibles in the case of distance contracts or contracts negotiated off-premises with professional counterparties (article 52 of Legislative Decree No. 206 of 6 September 2005 (the Consumer Code)), within 14 days of the day on which the consumer or a third party other than the carrier and indicated by the consumer acquires physical possession of the good.
The withdrawal right does not apply in the case of contracts concluded at a public auction (ie, by a method of sale where goods or services are offered by the trader to consumers who attend or are given the possibility to attend the auction in person) through a transparent, competitive bidding procedure run by an auctioneer, and where the successful bidder is bound to purchase the goods or services (article 59 of the Consumer Code). Conversely, the right of withdrawal exists in case of sales concluded at online-only auctions where the bidder is not able to attend the auction in person.
Duties of businesses selling to consumers
Are there any other obligations for art businesses selling to consumers?
Art businesses selling to consumers must comply with article 1341 of the ICC, which requires for standard terms and conditions unilaterally drafted by the seller and submitted to the other party (regardless of whether the latter is a professional or a consumer) that the party specifically approves in writing clauses limiting the liability of the seller or the right of the assenting party to raise claims against the seller, or modifying the statutory judicial venue in case of disputes.
Professional sellers entering a distance or an off-premises contract must provide the mandatory relevant information prescribed by article 49 et seq. of the Consumer Code before the consumer is bound to the contract. The relevant information to be provided by professional sellers includes the description of the artwork, the identity of the trader, the total price and means of payment, and whether or not a right of withdrawal exists - and, if it does, the conditions, time limit and procedures for exercising that right.
Finally, pursuant to article 64 of the CHC, art businesses must provide the buyer with a certificate of authenticity or attribution and provenance of the artwork.
Update and trends
Update and trends
Updates and trends
Law No. 124 of 3 August 2017 introduced amendments to the CHC regarding the international circulation of artworks. The two main aspects of the reform are: (i) the extension of the age of an artwork by a deceased person from 50 to 70 years from the date of creation as the relevant age for heritage protection purposes; (ii) the possibility for the state to classify objects aged between 50 and 70 years as cultural property if they significantly contribute to the integrity of the national cultural heritage; and (iii) the introduction of a de minimis threshold (€13,500) for allowing the free circulation outside of Italy of works by deceased authors that over 70 years old.
The approval of the Ministry of Cultural Heritage’s decrees implementing the reform are currently underway. New guidelines setting forth criteria for an export licence were approved on 7 December 2017.
Following the political elections of 4 March 2018, the new parliament is likely to approve a tax reform that will introduce a capital gains tax for private sellers.