Thursday, 23 July 2015

Germany: Due Diligence as it is Now: What is the problem?

German (and for some reason foreign) dugup dealers are kicking up a fuss about the proposed new legal requirements to determine where the goods they stock come from and information about the seller. I cannot really see why, because the new proposals which are described as so "draconian" in fact echo those already in existence in the current (2007) 'Kulturgüterrückgabegesetz' [Act to implement the UNESCO Convention of 14 November 1970 on the means of prohibiting and preventing the illicit import, expert and transfer of ownership of cultural property - English translation from the UNESCO website, Cultural Heritage Laws Database (© UNESCO) from the Federal Law Gazette 2007, Part I, No. 21, published in Bonn on 23 May 2007. Take a look:
Section 18
Recording obligations in the art and antiques trade and in the auction trade
(1) The operator of an art or antique dealership or an auction house shall, in the event of purchase and sale of cultural property within the meaning of subsection (2), record the following information:
1. a description which is sufficient to establish the identity of the item of cultural property,
2. specification of its origin, if known,
3. the name and address of the seller, the supplier, the purchaser and the client,
4. the prices for purchase and sale.
He shall thereby identify the supplier and the purchaser. The records, along with the supporting documents and receipts, shall be kept on the business premises for a period of ten years.

(2) An object with a value of at least 1000 euros shall be deemed to be cultural property within the meaning of subsection (1), sentence 1, if
1. it belongs to one of the categories set out in Part A of the Annex to Council Regulation (EEC) No 3911/92 of 9 December 1992 on the export of cultural goods (OJ L 395, p.1, 1996 L 267, p. 30), most recently modified by Council Regulation (EC) No 806/2003 of 14 April 2003 (OJ L 122, p. 1), as amended, and
2. its value corresponds to at least the financial thresholds set out in Part B of the Annex to Regulation (EEC) No 3911/92.
(3) A recording obligation pursuant to subsection (1) shall not exist if records meeting the requirements specified in subsection (1) are already being maintained and kept on the basis of general bookkeeping obligations under the German Commercial Code [Handelsgesetzbuch] or the German Fiscal Code [Abgabenordnung].
Since that is what the law has been saying since 2007, it seems a bit odd that collectors consider the proposed new law to be an "ex post facto" law. Their argumentation seems a bit weak.

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