Artist’s Resale Right Q&A
On 1 January 2012 the UK’s Artist’s Resale Right was fully implemented to include artists’ families and beneficiaries. In addition, the Regulations were amended, changing the rules which set out when a royalty arises.
the Right on behalf of artists and their beneficiaries and we have been invited to respond to your questions about the operation of the resale right.
Established for 28 years, DACS is a not-for-profit rights management organisation for visual artists. We represent over 60,000 artists from the UK and around the world. We offer three rights management services to artists: Payback, Copyright Licensing and the Artist’s Resale Right. You can find out more about what we do and how we are governed at www.dacs.org.uk
Please note that our responses to your questions should not be regarded as constituting legal or other advice and should not be relied upon as such. In relation to any particular problem that you may have, you are advised to seek specific and specialist advice.
It’s most likely to be me, Tania Spriggens, responding to your question. I’m the Director of Communications at DACS, and have worked here for over seven years. Where I can’t answer your question directly, I’ll be relying on our four experts in the Artist’s Resale Right team. Please note that questions will be answered during UK office hours.
I understand that the Artist’s Resale Right has attracted strong views from all sides of the debate. However, now the legal framework is in place, I want to use this forum to address questions you may have about the practicalities of the Right, rather than discuss the arguments for and against. Please keep this in mind when you prepare your questions as those seeking to re-open a debate will not be responded to.
Please post your questions below and we will do our best to answer them.
I look forward to hearing from you.
Tania Spriggens Director of Communications
Design and Artists Copyright Society (DACS)
T: +44 (0)20 7553 9052
F: +44 (0)20 7336 8822
In order that your questions are published, please enter a web-site address within your question or comment.
Please note that responses to your questions should not be regarded as constituting legal or other advice and should not be relied upon as such. In relation to any particular problem that you may have, you are advised to seek specific and specialist advice.
Any questions or answers within this or any other post within this blog do not necessarily represent the views of the Art, Antiques and Design Blog or its owners.
Thank you to DACS for taking the time and trouble to make themselves available for all those affected by the implementation of the Right’s extension to Heirs and Beneficiaries.
Elliot Lee & Francesca Fiumano
Rosamund Jordan
January 29, 2012
January 25, 2012 at 11:08 pm(Edit)
Why is nothing being done to stop auction houses using their conditions of sale to force buyers to pay droite de suit, (a seller’s and NOT a buyer’s duty) on purchases rather than collecting this levy from the seller or paying it themselves as agents of the seller?
Stautory Instrument 2006 No. 3Statutory Instrument 2006 No. 346. They charge the buyer (i.e. art dealers) Droit de Suite, whereas they should be charging the seller or paying it themselves. Dealers make the payment a second time when selling.
Conditions of sale in most UK auction houses catalogue state the following, or something
Except as otherwise stated *** acts as agent for the seller. The contract for the sale of the property is therefore made between the seller and the buyer.
Artist’s resale Right (“droit de Suite)
If the Artist’s Resale Right Regulations 2006 apply to the lot the buyer also agrees to pay us an amount equal to the resale royalty provided for in those Regulations and we undertake to the buyer to pay such amount to the artist’s collection agent.
The relevant part of Section 13 is as follows:
Liability to pay resale royalty
13. –(1)The following shall be jointly and severally liable to pay the resale royalty due in respect of the sale-
(a) the seller; and
(b) the relevant person (within the meaning of paragraph (2)).
(2)The relevant person is a person who satisfies the condition mentioned in regulation 12(3)(a) (the buyer or the seller, or (where the sale takes place through an agent) the agent of the buyer or the seller, is acting in the course of a business of dealing in works of art) and who is –
(a)the agent of the seller
(b) where there is no such agent, the agent of the buyer; or
(c) where there are no such agents, the buyer.
The relevant Explanatory Note reads:
Regulation 13 makes a specified art-market professional involved with the sale jointly and severally liable with the seller. The art-market professional who is so liable is the agent of the seller, if any, or failing that the agent of the buyer, or (again if there is no such agent) the buyer. Thus where the agent of the seller is a professional, that agent will be liable; the buyer who is a professional will be liable only if no professional is involved either as an agent of the seller or the buyer.
46 makes the position of liabilty to pay very clear:
http://www.tbrj.co.uk
Rosamund Jordan
January 29, 2012
Rosamund
Is this a question for Tania or for the auction houses?
I understand that the Artist’s Resale Right has attracted strong views from all sides of the debate. However, now the legal framework is in place, this forum should be used to address questions you may have about the practicalities of the Right.
ROSAMUND JORDAN WANTS TO KNOW WHY – AAD Blog
http://olympiafineartandantiquesblog.wordpress.com/2012/01/26/rosamund-jordan-wants-to-know-why-aad-blog/
Derek
January 29, 2012
Dear DACS
Watercolours I deal in that might possibly incur ARR are at the lower end of the scale and likely to have been painted in the late 19th Century by an artist who died in the 1940’s/50′s.
Leaving aside the ‘entitlement’ of a royalty to an heir for a picture that has long been on the secondary market and which they will likely have no knowledge of, what is your policy in regard to receipt of such payments if there is little known about the artist and their beneficiary is in result untraceable meaning that the royalty cannot be distributed?
Derek Newman
http://www.newmanfineart.co.uk
Tania
January 29, 2012
Dear Derek,
Thanks for your question. I hope my response answers it fully!
In the UK resale royalties must be paid to and distributed by a collecting society regardless of whether the artist or their beneficiaries are a member of any collecting society.
When DACS collects resale royalties from art market professionals for artists and rightsholders who have not joined a collecting society the DACS team undertakes a due diligence process to locate the artists or rightsholders.
DACS has been successful in locating artists to the extent that there remains only £8,911 held by DACS from royalties collected in 2006 (when the Right was first introduced) and which have not yet been distributed. This amount is currently £17,807 from royalties collected in 2007.
After six years any claim by a rightsholder for a previously paid resale royalty will be barred by virtue of the Limitation Act 1980. DACS does not intend to retain these undistributed royalties. We are now considering three distribution options:
1. Once six years have expired, we propose that at the end of each year we would return any such royalties for a relevant year to the relevant art trade professional to be refunded to the original payee of the royalty.
2. At the end of each year we would donate all the undistributed royalties for that year to the Artists General Benevolent Fund (AGBF) (www.agbi.co.uk).
3. Implement a hybrid of the first two options. Whereby at the end of each year we would write to the relevant art trade professional, detailing the undistributed amounts DACS holds relating to sales from that dealer, and stating that we intend to donate these royalties to the AGBF unless we receive an instruction from that dealer (within 30 days) to refund the royalties so that they can be refunded to the original payee.
DACS is currently consulting with art market professionals about their preferred option. If you wish to feedback on your preferred option, please write to Jeremy Stein with your preference by 3 February 2012 at DACS, 33 Great Sutton Street, London, EC1V 0DX or Jeremy.stein@DACS.org.uk. Alternatively, please let us know if you feel that there is another option that we have not considered and should do so.
http://www.dacs.org
Derek
January 29, 2012
Dear Tania
Thank you for your response. I would point out that to date you have only been collecting ARR for living artists, yet even now have several thousand pounds in your account that you have been unable to distribute.
How much more do you think you will accumulate in relation to artists that have died since 1942 owing to untraceable heirs?
One way to alleviate this would be to raise the threshold to €3,000 (as permitted in the EU Directive) which would help ease the situation.
I would suggest that by default any undistributed royalties are returned to the payee (as described in your option 1). If I’ve provided a levy to an untraceable heir as a result of my expertise and effort then I would like it back please. I suppose receiving earned interest over the intervening 6 years is out of the question? I will notify Jeremy Stein accordingly.
Derek Newman
http://www.newmanfineart.co.uk
Exhibitors
January 29, 2012
I understand that the Artist’s Resale Right has attracted strong views from all sides of the debate. However, now the legal framework is in place, this forum should be used to address questions you may have about the practicalities of the Right.
David Brooker
January 29, 2012
Tania,
fF I buy a painting for £800 under the ARR level, restore it re-frame it and improve the value then sell it for £2000, can I reduce the value of the ARR by the cost of the restoration and frame….? most dealers are saying they are going to include the ARR in the retail price….how does that work with the VAT. If I buy a piece for £1000 and then sell it for £2000 with ARR, Im not making £1000 profit as I have to pay ARR of £80…so do I pay the vat on the £920..???
David Brooker
http://www.davidbrooker.com
Tania
January 29, 2012
Dear David
Here’s the response from our ARR team:
The cost of framing or restoration of an art work cannot generally be deducted from the sale price. However, if the frame is sold separately or restoration or framing work is sold as a separate service, the price of this should not need to be included in the sale price.
VAT does not apply to the Artist’s Resale Right in any respect. Resale royalties will be calculated on sales price excluding VAT. If you operate the VAT margin scheme, exclude VAT elements which are included in the sale price.
With regards to absorbing ARR etc, we can’t help with that obviously, though LAPADA offer some guidance here – http://olympiafineartandantiquesblog.wordpress.com/2011/12/16/artists-resale-right-droit-de-suite-new-rules-coming-into-force-from-1st-january-2012-3/
I hope this helps,
Thanks
Tania
http://www.dacs.org
Michael Kanyuchi
February 11, 2012
Dear Tania
I would like to findout if AAR covers art-works from emerging countries and if so how they can they benifit.i would also like to which countries where AAR legally binding and if ARR royalities are acrued from auction sales or from privates sales
http://www.takuragallery.com
Tania Spriggens
February 16, 2012
Dear Michael
Thanks for your question. Artist’s Resale Right has been harmonised across the European Economic Area (EEA) and applies to auction, gallery and dealer sales, but not private sales. Artist’s Resale Right also exists in a number of other countries outside of the EEA, including many emerging countries. The WIPO website used to list the countries – I’ll try and find the link and post it for you. These countries no longer have reciprocity with the UK, but do have the Right on their statute books. However, the operational effectiveness of the Right in these countries is unknown.
Thanks
Tania
John R Walker
April 17, 2012
In Australia resale royalties are not collected for artists without a known successor.
http://superartbusiness.com.au/?p=233
Will ACS and DACS collect resale royalties on behalf of dead artists who are well known to have no successor in title? And if so why?
John R Walker
April 17, 2012
The Europa website
http://ec.europa.eu/internal_market/copyright/resale-right/resale-right_en.htm
states this about non EU Countries :
“To date the Commission has not been supplied with evidence for any third country which demonstrates that they qualify for inclusion on this list. ”
The American Legislation has been ‘referred to committee’ I.e buried.
New Zealand revoked their legislation before it was even enacted.
The Act for the Australian version of the scheme includes a sunset clause.
Whilst the passage of the Act was uncontroversial , bi partisan.
In practice It has proved to be a expensive fizzer ,loved by nobody. And this is especially the case with the very Indigenous artists who were in theory the reason for having the scheme in the first place .
The Liberal Conservatives when last in government simply rejected the concept of a resale royalty as constitutionally unworkable chimera…… they are almost certain to win the next election with a landslide. The royalty will either be wound back or simply wound up.
As for China … no chance .
The Scheme is EU only.
John R Walker
April 17, 2012
Dear Tania
The Mandated Authority placed in charge of the Australian resale royalty scheme is the Copyright Agency Limited (CAL). CAL is a very professional organisation. CAL has so far spent at least 1.5 million ( of public money) to deliver about $650K.
What was DACS actual total gross resale royalty collection ? The figure of %15 costs is quite remarkable. What is DACS ‘ fixed flag fall’ individual transaction cost?
Cheers
John
Exhibitors
April 17, 2012
We understand that the Artist’s Resale Right has attracted strong views from all sides of the debate. However, now the legal framework is in place, this forum should be used to address questions you may have about the practicalities of the Right.
John R Walker
April 17, 2012
Dear Exhibitors sorry if I have strayed!