The restitution case of Felix Hildesheimer’s heirs against the Hagemann Foundation made news recently: On 18 January 2021, the Advisory Commission (Limbach Commission) issued a press release that for the first time in its history, a recommendation it had made had not been implemented. The Hildesheimer case also highlighted an argument that the law on private foundations might be an impediment to restitution.
In 2016, the Advisory Commission had issued a recommendation that the Franz Hofmann and Sophie Hagemann Foundation (Stiftung) pay EUR 100,000 to the heirs of Felix Hildesheimer as compensation for a Guarneri violin in its possession. The Hagemann Foundation had, in defending its failure to implement the recommendation and to make the payment, cited inter alia legal restrictions governing the use of the foundation’s assets to satisfy its commitment to pay the compensation.
Shortly afterwards, on 3 February 2021, the German Federal Government approved draft legislation that reforms the German aw governing private foundations (Stiftungsrecht) and Germany’s Federal State Minister for Culture, Monika Grütters, issued a press release that pointed to the impact of the new law on that very issue:
“It is positive that the clarification in the explanatory memorandum to the new foundation law facilitates the voluntary restitution of cultural property, including from foundation endowments. I hope that this will now help to implement the restitutions required to implement the Washington Principles in particular. For such restitution is also in the well-understood interest of the foundations concerned.”
This statement was picked up by the press and reported as a “change to the law” which was designed to make recitations easier for foundations,
The real story behind Minister Grütter’s statement is somewhat more trivial: The “change in the law” is not primarily about looted art, and it’s not really a change in the law in the strict sense either: The German law governing private foundations (Stiftungen) currently differs from federal state to federal state. A project to unify and modernise the law had been in the works for quite some time, with first drafts having been published years ago. The main thrust behind the new law is hence completely unrelated to the issue of looted art and restitution. The bill is now in its final form and awaiting parliamentary approval; the approval will be a mere formality since the bill is proposed by the government and its substance is uncontroversial.
It appears that some modifications to the legislative materials were made fairly late in the process to address the restitution issue. The explanatory memorandum (Gesetzesbegründung) of the bill – not the provisions of the new law itself – now includes language aimed at helping board members of private foundations to take pro-restitution decisions. It reads as follows:
“A foundation is not prevented from returning cultural property that is part of the foundation’s endowment by the fact that the object is part of the endowment assets if a claim for restitution is made against the foundation. If a claim for restitution is statute-barred or if the foundation wishes to voluntarily restitute the cultural property, the decision in each individual case shall take into account in particular the founder’s intention with regard to the object in question, the value of the possession or ownership of the cultural property for the foundation, as well as the effects which invoking the defence under the statute of limitation or the refusal to restitute for other reasons may have, as well as the foundation’s well-understood interest in restitution, in particular also with regard to the reputation of the foundation. This also applies to the restitution of cultural property seized from claimants in the Soviet Occupation Zone / German Democratic Republic. The satisfaction of justified restitution claims that implement the Washington Principles and the “Joint Declaration of the Federal Government, the Länder and the leading municipal associations” issued in this regard is regularly in the best interests of a foundation. The restitution of cultural property seized as a result of Nazi persecution is an essential element in coming to terms with the injustice of the National Socialist regime. It is the stated intention of the Federal Government, the Länder and the central municipal associations that private individuals and institutions also follow the “Joint Declaration”, which in turn implements the Washington Declaration. Moreover, the return of cultural property is not only in the well-understood interest of a foundation when there is a claim for return under the Cultural Property Protection Act (Kulturschutzgesetz), but regularly also in every case in which unlawfully removed cultural property of other states can be returned to them. The same applies to the return of collection items from colonial contexts that were appropriated in a way that is no longer legally and/or ethically justifiable today.”*
The Hagemann Foundation has welcomed this clarification, and it remains to be seen what effect the new language will have.
While it is true that the directors of a private foundation were restricted in their freedom to dispose of assets that are part of the endowment of a foundation, these restrictions remain, as a matter of principle in place under the new law. The current Bavarian Foundation Act (Stiftungsgesetz) that applies to the Hagemann Foundation states in Article 6 para. 2 that a foundation’s endowment (Grundstockvermögen) has to be maintained undiminished. The respective acts of the other federal states contain identical or similar language; this is not a Bavarian peculiarity. The new federal law (to be incorporated into the German Civil Code as a new § 83c BGB) will contain almost identical language (“Das Grundstockvermögen ist ungeschmälert zu erhalten.”)
The explanatory memorandum quoted above therefore will only assist in interpreting the law. State bodies supervising private foundations (Stiftungsaufsicht) and courts will take that language into account if they have to assess the decision of a foundation to restitute a work of art. The law maker had made it clear that, while the reasons in favour of restitution weigh heavily, various interests must still be balanced in coming to a decision. In my current view, the explanatory memorandum would appear to support an interpretation of the law that, I would argue, would have been always possible to adopt. Still, having it in writing from the legislator does help.
* The German original reads in full as follows: “Auch an der Rückgabe von Kulturgut, das Teil des Grundstockvermögens ist, ist eine Stiftung nicht dadurch gehindert, dass es Teil des Grundstockvermögens ist, wenn gegen die Stiftung ein Herausgabeanspruch erhoben wird. Ist ein Herausgabeanspruch verjährt oder möchte die Stiftung das Kulturgut freiwillig herausgeben, sind bei der Entscheidung im jeweiligen Einzelfall insbesondere der Stifterwille hinsichtlich des betreffenden Objekts, der Wert des Besitzes oder des Eigentums an dem Kulturgut für die Stiftung sowie die Auswirkungen, die die Erhebung der Verjährungseinrede oder die Verweigerung der Herausgabe aus anderen Gründen erwarten lässt, sowie das wohlverstandene Interesse der Stiftung an einer Rückgabe, insbesondere auch hinsichtlich der Reputation der Stiftung, zu berücksichtigen. Das gilt auch für die Rückgabe von Kulturgütern, die Anspruchstellern in der SBZ/DDR entzogen worden sind. Im wohlverstandenen Interesse einer Stiftung liegt regelmäßig die Erfüllung gerechtfertigter Restitutionsansprüche in Umsetzung der Washingtoner Prinzipien und der hierzu ergangenen Gemeinsamen Erklärung der Bundesregierung, der Länder und der kommunalen Spitzenverbände. Die Restitution von NS-verfolgungsbedingt entzogenen Kulturgütern ist ein wesentliches Element der Aufarbeitung des nationalsozialistischen Unrechtregimes. Es ist der erklärte Wille der Bundesregierung, der Länder und der kommunalen Spitzenverbände, dass auch Privatpersonen und privatrechtlich organisierte Einrichtungen der Gemeinsamen Erklärung folgen, die ihrerseits die Washingtoner Erklärung umsetzt. Zudem liegt die Rückgabe von Kulturgut nicht nur dann im wohlverstandenen Interesse einer Stiftung, wenn ein Rückgabeanspruch nach dem Kulturgutschutzgesetz besteht, sondern regelmäßig auch in jedem Fall, in dem durch die Rückgabe unrechtmäßig verbrachtes Kulturgut anderer Staaten an diese zurückzugeben werden kann. Dasselbe gilt für die Rückgabe von Sammlungs- gut aus kolonialen Kontexten dessen Aneignung in rechtlich und/oder ethisch heute nicht mehr vertretbarer Weise erfolgte.” (Page 62)http://www.disputeresolutiongermany.com/2021/02/art-law-restitution-of-looted-art-and-the-reform-of-private-foundation-law/