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Congratulations to Our Recent Summer Associate and Intern, Winner of the NY State Bar Association’s Writing Competition

Amineddoleh and Associates LLC is excited to announce that our recent summer associate and current student intern, Lawrence Keating, has won the Phil Cowan–Judith Bresler Memorial Scholarship Writing Competition. The competition is sponsored by the New York State Bar’s Entertainment, Arts & Sports Law Section. His submission, An Artwork by Any Other Name: An Examination of Authenticators’ Role in the Art Market and Suggested Legislative Improvements, describes current issues faced by art authenticators and a market atmosphere that undermines consumer confidence.

As auction house prices continue to break records, the role of authenticators in the market has never been so vital; simultaneously, these experts have never faced as much scrutiny. “Buyers with an art-as-asset-class mentality rely on connoisseurship in the place of due diligence to help understand and mitigate risk; however, connoisseurship’s academic roots and imprecise nature have caused growing pains for art investors,” writes Mr. Keating. Today, millions of dollars can hang in the balance of an attribution, and the fear of litigation over a negative attribution has caused many authenticators to cease offering their services.

The paper parses through a century of caselaw to understand authenticators’ liability for their attributions, and under which circumstances they are most vulnerable. Specifically, the paper examines three classifications of connoisseurs whose services bolster the market: academics, artist institutions, and financially interested intermediaries. The paper goes on to recommend changes to the New York Arts and Cultural Affairs Law with the aim of balancing additional protections for authenticators with incentives to educate consumers about the nature and reliability of art authentications. The recommended approach seeks to more accurately reflect the imprecise, and occasionally indecent, nature of the art world, and the difficult reality that it is often the market, rather than the courts, that has the final say in artwork attribution.

The other winner of the competition (the award is given to two students each year) is Deanna Schreiber, another Fordham Law student. (Both the winners were students in Leila Amineddoleh’s Art Law Seminar at the law school.) Her paper focused on the Foreign Sovereign Immunities Act. The competition is a competitive one as it is open to all law students in NY and NY-area law schools, and it awards a $2,500 scholarship for each of the winners.

Congratulations Lawrence and Deanna!

Inaugural Issue of the Art Law Review

Amineddoleh & Associates LLC was invited to contribute an article to the inaugural issue of the Art Law Review. The law firm’s piece discusses recent cultural heritage disputes, including international antiquities litigations, Holocaust-era looted property cases, government forfeitures, and developments in the private and public collecting sphere due to debates about colonialism and the Black Lives Matter movement. Read the publication here: https://thelawreviews.co.uk/edition/1001575/the-art-law-review-edition-1

Chinese Court Orders the Return of a Mummified Monk

 

Temple in Yangchun where the statue was originally housed.  Photo copyright: Lin Wenqing

Last month, the Sanming Intermediate People’s Court of Fujian Province, China announced that the residents of the Yangchun and Dongpu villages had a proprietary right in a Buddha containing the mummified remains of a 1,000-year-old monk. The court ordered its return from Dutch art collector Oscar van Overeem. As one might expect, the story of how this treasured cultural artifact traveled to the Netherlands, and how a civil court might reach such a verdict, has been anything but conventional.

During the Song Dynasty (960-1297), a Buddhist monk named Zhang Gong Liu Quan was a skilled doctor known for his benevolence. In fact, he was credited with helping the local population to survive a plague. He was said to have achieved Nirvana, and in the later years of his life, he prepared his body for self-mumification. Following his death, Zhang Gong’s mummified remains were enclosed in a golden Buddha statue to commemorate his contributions to the community. Thereafter, the practice of worshipping the statue, the Zhanggong Zushi (also called Buddha Zhanggong), has been passed down for almost a thousand years through generations of the local population.

That statue is adorned with elaborate ornamentation representative of the Ming Dynasty, which is consistent with the last time the piece was renovated. The seated Buddha wears two sets of robes: a grey lining covered by a delicately carved outer layer. The outer layer features an intricate network of clouds, knitted lines, and flowers. Accorind to Erick Bruijn, an independent researcher of esoteric Buddhism, the right sleeve and stomach area depict dragons to evoke longevity and “irresistible power.” A black belt is draped over the left shoulder with ends on the left chest and back. The back is also decorated with the Chinese character “佛,” for Buddha. The statute wears a philosophy ring on its left hand surrounded by inscriptions noting “disasters turning into auspicious” and “delivering all living creatures from torment.” According to local records, the piece was renovated in an effort to reverse population decline in the area and bring the people a successful harvest.

Photo owned by Drents Museum

The statue remained in the small village of Yangchun since Zhang Gong’s mummification. There, worship of the statue continued for generations despite a long and sometimes turbulent history. Once, the piece was even buried in a field to avoid destruction during China’s Cultural Revolution. However, the piece went missing in December 1995, when it was stolen and smuggled to Hong Kong. Locals from Yangchun reportedly saw a van traveling through the tiny village where the statue was housed. In the rear seat, they saw a seated figure covered with a blanket, and they assumed it was someone who was ill being taken for medical treatment. Shortly afterwards, they discovered that the statue of the holy man was missing from the temple. Locals were devastated. As stated by one villager, “Zhang Quisan is not a cultural relic…We see him as family. He is one of us.”

Unbeknownst to the villagers, on the other side of the world, the statue appeared for sale. The statute was lost until it was sent to Asian art and antiquities restorer, Carel Kools, who later purchased it in 1997. Upon further testing, Kools was shocked to discover the statue contained a set of mummified remains, although he remained unaware of the subject’s identity. He then sold the work to Oscar van Overeem, an Amsterdam-based architect and respected art collector. The local villagers learned of the statue’s location while it was on loan to the Hungarian National History Museum in 2015.

The two villages demanded the return of the statute and the remains. After negotiations between the villages and Overeem yielded negligible results, the two villages sought to recover the statue through the Netherlands courts. Overeem argued that the “village committee is not to be referred to as a natural person or legal person” under Dutch law and therefore the court was not entitled to hear their claims. The villages responded in kind that under Chinese law, a village committee has standing to act as a party to litigation as a special legal person acting on behalf of village residents, and that such cases are not uncommon in practice.

Photo courtesy of The Economist

The villages also asserted that the object was properly understood to be a “corpse,” as defined under the Dutch Burials and Creations Act, and according to the Act, could not be subject to ownership. They emphasized that the act of mummification was intentional, and “[t]he likely wish of monk Zhang Gong is that through mummification, he would after his death continue to have a spiritual and healing power on his environment, and he would certainly not have agreed that his body would become the subject of (illegal) art trade.” Overeem argued that because most of the organs were absent, the mummy was better classified as “human remains” and not a corpse, drawing on literature supporting the practice of auctioning mummies throughout the U.S., Canada, Britain, and beyond. There were also doubts presented as to whether this was truly the correct Buddha in question and whether Overeem exercised good faith when he purchased the work back in 1995. The villages argued that Hong Kong had a reputation for illegally sourced antiquities at the time, and as a seasoned collector, Overeem should have known to make more detailed inquiries into the work’s provenance and provenience.  Under the Dutch Civil Code, collectors must observe necessary prudence when acquiring ancient cultural objects. It is known within “professional art trading circles” that this kind of statue could never have been legally exported from China without a permit. A major collector should have asked for provenance documents and an export permit. Apparently, Overeem did not.

The Dutch case was dismissed in 2018, when the court ruled that the committees were not legal persons (leaving other, more visceral questions for a later date). The villages continued their pursuit, however, in China. In a decision issued last month, the Chinese Court sided with the plaintiffs and ordered Overeem to return the statue within 30 days. Overeem has said separately that he already sold the statue to a Chinese businessman, and that he no longer has any knowledge of its whereabouts. What will happen if and when Overeem does not comply with the Chinese court order is unclear.

The case highlights a change in China’s official policy towards cultural artifacts, in which the nation has begun to demand and litigate for the restitution of looted objects. The mummy is said to have become a smaller Chinese version of the Elgin marbles: an emblem of the despoliation of Chinese culture by foreigners. Unfortunately for many nations around the world, a vast number of significant cultural items are not in secure locations, and thus are vulnerable to falling victim to illicit removal.

 

Antiquities Now Subject to Banking Regulations in Effort to Combat Money Laundering

Photo: Samuel Corum, from NY Times (Jan. 1, 2020)

Last Friday, the U.S. Senate and House of Representatives successfully overrode a presidential veto to pass the National Defense Authorization Act, which includes provisions subjecting antiquities dealers to regulations under the Bank Secrecy Act. The art market, and the trade of ancient art in particular, has been a source of concern for regulators for many years: the rare disclosure of the identities of the ultimate buyers and sellers (even to each other) renders the market vulnerable to money laundering by criminal organizations.

By broadening the application of the Bank Secrecy Act of 1970 to include antiquities dealers, regulators will have the newfound ability to cut through the opacity of the antiquities market and subject transactions to additional scrutiny. Over the next year, the Financial Crimes Enforcement Network, a bureau within the Treasury Department, will consult with law enforcement, the private sector, and the public to determine how the law will be implemented. It is expected that regulations will echo those controlling the trade of precious metals and jewelry, where suspect transactions meeting certain criteria must be flagged to the federal authorities. It is also expected that the law will combat the use of shell companies to obscure the identities of parties involved in a transaction, which is a common occurrence in art market transactions.

While proponents of the bill feel the change to the industry is “long overdue,” antiquities dealers are less receptive. Randall A. Hixenbaugh, president of nonprofit organization American Council for the Preservation of Cultural Property, states that the government’s concern over money laundering has been blown out of proportion, and that the industry is already subject to the Bank Secrecy Act through the financial institutions used to facilitate high-value transactions. “Criminals seeking to launder ill-gotten funds could hardly pick a worse commodity than antiquities.” The industry has fought similar bills in recent years to intended to create more oversight for the art market. For instance, Christie’s auction house, has spent more than $100,000 on lobbyists in the last two years to influence legislative efforts in the US. Interestingly, the EU – and more recently, the UK – have already implemented anti-money laundering controls for art market participants that multinational corporations (such as Christie’s) must adhere to when carrying out transactions in those regions. As the country with the largest share of the global art market, it seems logical for the US to take a similar step.

Gold and lapis bowl from Ur, looted from the National Museum of Iraq (present location unknown).  Photo: Oriental Institute Lost Treasures from Iraq database

Industry regulators and watchdogs have stressed the importance of these protections for years. Antiquities recently plundered from conflict-torn areas, like Syria and Iraq, have flooded the market over the past decade, often winding up in the hands of unsuspecting collectors. International law enforcement agencies believe that the black market for such works is supported not only by collectors and dealers, but also by terrorist groups. Moreover, a recent Senate report revealed that at least two Russian oligarchs used the art market to bypass U.S. sanctions. And in 2020, UNESCO warned that these issues latent in the art and antiquities market have only been exacerbated by the development of online sales platforms.

Inclusion under the Bank Secrecy Act will require antiquities dealers to adopt more stringent anti-money laundering practices, mostly focused on identifying parties to a transaction and reporting suspicious activity to regulators. While these provisions are limited to the antiquities trade, the rest of the art market may soon follow. The Act also calls on the Department of the Treasury to further investigate the relationship between money laundering and the wider art market, and to report its findings within a year. Overall, government oversight over the US art market is increasing, as evidenced by the Office of Foreign Asset Control (OFAC)’s advisory to art market participants concerning high value artwork. As a result, dealers, auction houses, artists, galleries, and collectors should all be aware of this trend and its potential impact on future sales.

As we reiterate in our ongoing provenance series, due diligence plays a key role in art market and antiquities transactions, and potential sellers and purchasers should be aware of developments and trends affecting the industry. In addition to avoiding legal liability, performing due diligence and ensuring transactions are as transparent as possible allows collectors to obtain peace of mind and enjoy their acquisitions. For dealers, assessing money laundering risks and implementing corrective measures in advance will minimize disruptions once legislation comes into force. At Amineddoleh & Associates LLC, we counsel a wide range of art market participants on regulatory matters. We will continue monitoring incoming legislation closely to determine how best to assist our clients.