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chistorical heritage goods of the general category that, in principle, can be freely disposed of without notifying the public administration, except if:

•they are over 100 years old; these always need an export permit; or

•if they are between 50 and 100 years old and their destination is a country outside the European Union; these need an export permit if their value exceeds the thresholds established by Council Regulation (EC) No. 116/2009 on the export of cultural goods.

There is also an ‘extraordinary’ proceeding for goods that have been legally imported and declared to the Ministry of Culture because they can be re-exported within a renewable 10-year term.15

The export of artworks belonging to the Spanish historical heritage without the required export permission results in the goods becoming the property of the state.16 Furthermore, pursuant to Law No. 12/1995 on the repression of smuggling, a person commits a smuggling offence if he or she exports an item with a value higher than €50,000 without permission, which is punishable by one to five years’ imprisonment and a fine of up to six times the value of the item. A person commits a smuggling infraction if the value of goods exported without permission is less than €50,000. The infringement will be punished by a fine of four times the value of the item.

In the recent Spain v. Coll & Cortes Ltd case, two works of art over 100 years old, David and Goliath and Los Mendigos, were seized at the French border while circulating with an expired export permission. The works were not intended for sale, only for a temporary exhibition, and were located in France in transit. Contrary to the claims of the Public Prosecutor’s Office, the Provincial Court of Madrid has considered in appeal that there is no crime of smuggling (as the two works did not exceed the value of €50,000) and that, therefore, the two works of art do not become public property.17

Regarding import control, there are two categories of cultural property imports: temporary and permanent. The proceedings for temporary imports are usually carried out by customs and police officers. Temporary imports coming from third countries require an administrative document, and those coming from within the EU require proof of their entry and exit dates into the country.

Law No. 16/1985 establishes the payment of a fee for the issue of export permissions, applicable to the export of cultural goods to countries outside the European Union,18 which is applied to the value of the exportable good, in instalments, according to the following rates:

a5 per cent for values up to €6,000;

b10 per cent for values of €6,001 to €60,000;

c20 per cent for values of €60,001 to €600,000; and

d30 per cent for values of at least €600,001.

The fee is accrued by and settled with the Ministry of Culture.

15Article 32 of the Spanish Historical Heritage Law.

16id., Article 29.

17Resolution of 20 September 2020.

18Article 30 of the Spanish Historical Heritage Law.

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iv Art finance

Auction houses in Spain do not currently offer advances, loans or guarantees on artworks. The type of security interest taken against art or antiques could be a non-possessory pledge. Its regulation expressly contemplates its use for art, antiques and collectibles. It is a security granted over movable property, where the collateral continues to be in possession of the owner (debtor) as a deposit. It requires execution in a public deed and must be registered in the Chattel Registry. The prevention of money laundering and the financing of terrorism in the art trade is regulated by Law No. 10/2010 and its Regulation of 2014, which oblige art and antiques dealers, in the case of such transactions of value equal to or exceeding €1,000, to:

aformally identify the client;

bput in practice due diligence measures regarding the transaction;

cprovide training to managers and employees;

dregister the transaction’s documentation for 10 years; and

eprovide a suspicious activity report to the Spanish Financial Intelligence Unit after verifying suspicious transactions by special examination.

5AMLD is pending transposition. On 12 June 2020, the Draft Law for the prevention of money laundering and terrorism financing was published; unlike 5AMLD, this does not contemplate a minimum transactional threshold of €10,000 for exemption from anti-money laundering regulations. The new Law is expected to be published in the first quarter of 2021.

VI ARTIST RIGHTS

i Moral rights

Moral rights are regulated in the Intellectual Property Law.19 Article 14 of the Law provides the seven moral rights for artists, which are recognised without any time limitation:

athe right to decide whether a work is to be made available to the public and, if so, in what form;

bthe right to determine whether the work should be released under the author’s name, under a pseudonym, a sign or anonymously;

cthe right to claim authorship of the work;

dthe right to demand respect for the integrity of the work and to object to any distortion, modification or alteration of it or any act in relation to it that may be detrimental to the artist’s legitimate interests or to his or her reputation;

ethe right to alter the work subject to respect for the acquired rights of third parties and the protection requirements of goods of cultural interest;

fthe right to withdraw the work from circulation owing to changes in his or her intellectual or ethical convictions, after paying damages to the holders of the exploitation rights; and

gthe right of access to the sole or a rare copy of the work, when it is in another person’s possession, with the intention to exercise the right of communication or any other applicable right.

These rights cannot be waived or assigned.

19 Law No. 1/1996.

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ii Resale rights

The right of participation in the resale price of works of art is recognised in Article 24 of the Intellectual Property Law. The artist’s resale right will apply whenever ‘art market professionals’ participate in the resale and when the resale price exceeds €800 (before the amendment to the Law in 2019, the minimum resale price was €1,200). There is an exception for the resale of works purchased by an art gallery directly from the creator, provided that the period between that first purchase and the resale does not exceed three years and the resale price does not exceed €10,000, excluding tax. The artist’s resale royalty depends on the purchase price:

a4 per cent of the first €50,000;

b3 per cent of the part of the price between €50,001 and €200,000;

c1 per cent of the part of the price between €200,001 and €350,000;

d0.5 per cent of the part of the price between €350,001 and €500,000; and

e0.25 per cent for any part of the price over €500,000.

However, the artist’s resale right can never exceed €12,500.

The duration of the artist’s resale right is 70 years after the author’s death and 80 years if the author died before 7 December 1987. In both cases, the period begins the first day of the year following his or her death. The person liable to pay is the seller (art market professionals involved in the resale are jointly responsible), and the beneficiary of the artist’s resale right is the author during his or her lifetime and, after his or her death, the person expressly nominated or the legal heirs. Beneficiaries can collect the artist’s resale royalty directly or entrust a collective management company to collect it.

iii Economic rights

According to the Intellectual Property Law, the following economic rights are exclusive to the author and cannot be exploited without his or her authorisation:

athe right to reproduce his or her work, in any format, except for educational purposes;

bthe right to distribute the work and its copies by sale, rental, loan or other means;

cthe right to public communication or presentation to an audience outside the private sphere. The purchaser of a work has the right to display it publicly unless the author has expressly stated otherwise in the sales agreement or objects on the ground that the manner in which it is displayed is prejudicial to his or her honour or professional reputation; and

dthe right to transformation, or any modification of its form from which it results in something different.

The author may assign his or her economic rights to a third party or assignee, but this must always be done in writing. If no assignment period is mentioned, it is limited to five years, and if no territory is mentioned, it is limited to the country in which it is signed.

Infringement of copyright is sanctioned by the Intellectual Property Law with compensation for damages, calculated according to the economic consequences for the author of the infringement. In the criminal field, the reproduction, plagiarism, distribution and public communication without the author’s authorisation constitutes a crime if the infringer has the intention of obtaining a direct or indirect economic benefit to the detriment of a third party. The penalty, set out in Articles 270 and 271 of the Criminal Code, shall be a fine and imprisonment for six months to four years.

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In a recent judgment, F Mateo & Mateo v. SEAT,20 the court had to determine whether the artist’s copyright for the video installation I travel to know my geography had been infringed by a SEAT advertisement. In 2018, the court ruled in favour of the artist, F Mateo, stating that the similarities between both works reached mathematical certainty; therefore, the SEAT advertisement was to be considered plagiarism.

VII TRUSTS, FOUNDATIONS AND ESTATES

Foundations are a useful structure to either own or manage art collections. Foundations are governed, from the national sphere of competence, by the Law on foundations21 and, from the regional sphere of competence, by the laws on foundations of each of the 17 autonomous communities. The Law on incentives for patronage22 provides for a series of direct and indirect tax exemptions that benefit artwork holders’ foundations.

The tax incentives for patronage have been modified by Royal Decree-Law No. 17/2020, which introduced tax measures to support the cultural sector to deal with the economic and social impact of covid-19. Since 1 January 2020, individuals have been able to deduct up to 80 per cent of the first €150 donated and 35 per cent of the remaining amount from their personal income tax. This last percentage of deduction will rise to 40 per cent if donations for the same amount or more have been made in favour of the same entity in the two immediately preceding financial years. Legal entities (corporate) may deduct 35 per cent of the amount donated from corporate tax, rising to 40 per cent if, in the two immediately preceding financial years, donations of the same amount or more had been made in favour of the same entity.

VIII OUTLOOK AND CONCLUSIONS

Spain provides a clear system for residents who import works of art from abroad. These goods may be exported without limits for a 10-year period,23 which can be renewed at the end of the first 10-year period.

20Resolution No. 10/2018. Ordinary Proceeding 250/2014, dated 8 January 2018.

21Law No. 50/2002.

22Law No. 49/2002.

23Law No. 16/1985.

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Chapter 26

SWITZERLAND

Marc-André Renold and Peter Mosimann1

I INTRODUCTION

Switzerland is an important art market and art transit country and, as such, its laws on art and cultural heritage acquisition and transfer are highly relevant. In addition, museums and collectors play an active role on the cultural scene, which explains why contemporary art and, therefore, copyright issues are also of central importance in the field.

II THE YEAR IN REVIEW

From the point of view of international law, 2020 saw two important changes in Switzerland. In addition, some comments can be made on the issue of deaccessioning from the point of view of Swiss law.

i International conventions ratified by Switzerland

The 2001 UNESCO Convention on the Protection of the Underwater Cultural Heritage, ratified by Switzerland in October 2019, entered into force on 25 January 2020.2 To implement this ratification in Swiss law, the concept of cultural heritage was extended to include ‘all traces of human existence having a cultural, historical or archaeological character which have been partially or totally under water, periodically or continuously, for at least 100 years’.3

Another important international text entering into effect in Switzerland in 2020 is the 2005 Council of Europe Framework Convention on the Value of Cultural Heritage for Society (the Faro Convention).4 This important Convention enhances the rights of individuals and communities in relation to cultural heritage; in particular, to the common heritage of Europe.

1Marc-André Renold is a partner at Etude Renold Gabus-Thorens & Associé(e)s and of counsel at Wenger Plattner and Peter Mosimann is of counsel at Wenger Plattner.

2RS 0.444.2.

3See the newly modified Article 2(1) of the Swiss Federal Act on the International Transfer of Cultural Goods, RS 444.1.

4RS 0.440.2 (the Faro Convention).

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ii Deaccessioning (in general)

Deaccessioning can be defined as the final removal outside of a museum’s permanent collection of a cultural good that is fully owned by the institution. As to the proceeding by which a cultural good is deaccessioned, the terms of the International Council of Museums (ICOM) Code of Ethics for Museums5 and the substantial laws that are binding for a specific museum may be referred to.6 As a general rule, deaccessioning is considered as being the removal of inalienable public property and so, as such, wrong. All museums that are wholly state-owned7 or private entities that receive their main funding from the state are committed by law to refrain from deaccessioning; the majority of the museums and their directors are also committed to being members of ICOM and, therefore, to comply with the terms of the ICOM Code of Ethics for Museums.8

There are numerous reasons for a museum to deaccession part of its collection, including lack of storage room, reduction of operational costs for storage, insurance and restoration, sale of duplications and restricting the scope of the collection. Even famous museums fulfil deaccessioning to finance the acquisition of a masterpiece.

The public understanding is, however, that deaccessioning should not occur for several reasons. The popularity of art occurs in waves. Museums exist at the interface between past and future. What is considered to be valuable should also be approachable for future generations. The reality, however, is that ‘fashion’ changes. Art considered highly valuable today may be considered abdicable by future generations (e.g., the Neue Wilden pieces were highly priced works in the art market in the 1980s and have today almost disappeared).

Deaccessioning may also be frustrating for donors of art when they realise that the museum is disposing of parts of its collection.

In the international practice of museums it is established that deaccessioning is allowed in certain cases. These exceptions include the disposal of duplicates of the museum’s collection, unusual high costs of restoration of masterpieces, lack of authenticity of an art work, restitution of a piece of the collection to the rightful owner, and restitution to a donor because of the museum’s inability to fulfil donation agreement conditions after a certain time has lapsed.

It is international practice that deaccessioning is not allowed for the financing of the museum’s operational costs or the financing of investments in the infrastructure of the museum.

5Section 2.12 et seq.

6See Section 6 of the Basel Town Museum Act; disposal of museums’ cultural goods is strictly barred and may only be done as an exception, subject to a request of the museum to the government.

7See Kunstmuseum Basel, which was incorporated in 1661 as an agency of the Canton of Basel Town. The collection is defined as public property (and not financial property) of the Canton of Basel Town; it is protected by immunity.

8See, re history and the public awareness of deaccessioning, Stephen K Urice, ‘Deaccessioning policies and practices in the United States museums’, in: Mosimann and Schönenberger (eds), Art & Law 2018, Bern: Stämpfli Verlag AG, 2018, pp. 15, 18 et seq.; Martin Gammon, Deaccessioning and its Discontents – A Critical History, Cambridge (Mass.): MIT Press, 2018.

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iii Deaccessioning at the Langmatt Foundation, Baden

While all the cultural policy arguments against deaccessioning are indeed very strong, museum collections are nonetheless at risk. In times of a policy of budgetary rigour, politicians time and again come up with the idea of instructing museums to sell items from their collections, not only to fund infrastructure investments, but also to pay for their operating costs. In 2019, the Langmatt Foundation was forced by the authorities to consider selling several works from its outstanding collection of French impressionists. The City of Baden had advised that it was willing to contribute 10 million Swiss francs to renovate the museum building only if the Foundation itself increases its capital by 40 million Swiss francs. This amounted to forcing the museum, a member of ICOM, to sell up to three major impressionist works. The Foundation is still evaluating which pictures should be sold. Swiss museums have decried the actions of the Langmatt Foundation and of the authorities as sinful. This could represent a warning beacon for other publicly funded museums as municipal finances are likely to be strained in the coming years for a variety of reasons.

IIIART DISPUTES

iTitle in art

The transfer of ownership of a work of art in Swiss law requires the transfer of possession of the work of art, as is the case in the transfer of any chattel. As provided by the Swiss Civil Code (SCC),9 a condition for the transfer of ownership is the good faith of the person to whom the chattel is transferred.

Good faith is presumed, but no one can invoke good faith if it is incompatible with the attention required by the circumstances.10 Recent case law shows that courts are setting a high standard for the attention required by the circumstances. In a landmark decision of 2015, the Swiss Supreme Court stated that the fact that the purchaser knew about a rumour relating to the sale on the European market of a stolen Malevich painting was sufficient to raise his standard of attention and that, had he made the appropriate investigations, he would have found out that the painting he purchased was in fact that same stolen painting.11

The bad faith possessor will never acquire ownership, even through the passing of time.12

ii Nazi-looted art and cultural property

From a strictly legal point of view, Nazi-looted art is not treated differently in terms of its transfer and possible acquisition in good faith. Interestingly, a US court recently applied Swiss law to the transfer of a looted Pissarro painting to a Swiss collector who then gave his collection to a Spanish foundation. Although the claimant was not able to recover the looted painting for reasons connected to Spanish law, the US court correctly interpreted Swiss law in connection with the issue of the original acquisition of the painting in Switzerland. The fact that old stickers on the back of the painting showing the initial Jewish provenance had been partially torn off was considered to be an indication that, had the purchaser taken this

9Article 714 of the Swiss Civil Code (SCC).

10id., Article 3.

11BGE 139 III, p. 305.

12Article 936 SCC; see Section III.iii.

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element seriously and further investigated, he would have discovered that the painting had been looted from its Jewish owner in 1935.13 The initial acquisition was therefore considered invalid for lack of good faith.

From the soft law perspective, Switzerland is a signatory of the 1998 Washington Principles on Nazi-Confiscated Art and, as such, these Principles have had an effect, in particular, when alternative dispute resolution is used (see Section III.iv). Swiss law has, however, not been amended, as such, to take the Principles into consideration. A looted art section was added to the Swiss Federal Office of Culture’s specialised agency, but it has no decision-making power and can only advise potential claimants.14

iii Limitation periods

Since 2015, Swiss law has provided for specific limitation periods for title claims regarding cultural objects. According to Article 934, Paragraph 1 bis of the SCC, title claims by the original owner of stolen cultural objects can be made within one year of the claimant knowing the identity of the present possessor and the location of the object. In any case, the original owner’s claim will be time-barred 30 years after the theft.

If, however, the present possessor is not to be considered in good faith – the burden of which lies on the shoulders of the claimant – the claim for restitution is subject to no limitation period.15

iv Alternative dispute resolution

Alternative dispute resolution is used with regard to Nazi-confiscated art. This was the case in the claim made by the French Jaffé heirs against the Museum of Fine Arts in the city of La Chaux-de-Fonds for the restitution of a Constable painting subject to a forced sale in Nice in 1943. Initial negotiations with the museum were unsuccessful, forcing the heirs to bring the matter before the local courts. Swiss procedural law requires that an attempt at conciliation be made under the guidance and supervision of the court. The judge responsible for this aspect of the procedure took his conciliatory role very seriously and was able to get the parties to enter into an agreement according to which the painting was returned to the family in exchange for a part payment of the expenses of caring for the painting for the past 20 years. The payment of that amount was made possible through the intervention of the French Commission for the Indemnification of Victims of Spoliations on the basis of France’s responsibility for the 1943 forced sale.16

Another case regarding, among others, two lithographs by Edvard Munch claimed by the heirs of Curt Glaser from the Kunstmuseum in Basel was successfully negotiated by the

13David Cassirer et al. v. Thyssen-Bornemisza Collection Foundation (C.D. Cal., 30 April 2019 (Case No. CV 05-3459-JFW)).

14www.bak.admin.ch/bak/fr/home/patrimoine-culturel/l-art-spolie/le-bureau-de-l_art-spolie.html.

15Article 936 SCC.

16Report of the Municipal Council relating to a request for transfer to Jaffé joint possession of a painting by John Constable, property of the city of La Chaux-de-Fonds, exhibited at the Museum of Fine Arts (6 September 2017) and Order of General Council of the city of La Chaux-de-Fonds (28 September 2017).

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parties. The agreement provides for a ‘just and fair solution’ under the Washington Principles: the lithographs remain at the museum in exchange for an undisclosed financial participation as well as the organisation of an exhibition as a tribute to Curt Glaser.17

IV FAKES, FORGERIES AND AUTHENTICATION

Fakes and forgeries are frequent and give rise to criminal and civil claims. It is interesting to note that the Beltracchi case in Germany – which led to the criminal indictment of the well-known German forger – was initiated in Switzerland where the gallery of the purchaser of a fake painting attributed to Campendonk by the German auction house Lempertz was located.18 In Swiss private law, the purchaser of a fake or forgery is relatively well protected. The purchaser can base his or her claim not only on the specific rules of warranty applicable to a sales contract,19 but also on the general rules applicable to the legal effect of a substantive error on the basis of Article 24 of the Swiss Code of Obligations (SCO). In a long-standing line of precedents, the Swiss Supreme Court has decided that the two sets of rules on warranty and error could be invoked alternatively, thus making the invalidation of the sale based on an error possible, even if the shorter limitation period of the claim based on warranty has expired.20 Claims based on warranty are subject to a limitation period of two years after the

sale,21 whereas claims based on error are subject to no absolute limitation period.22

The parties can of course adopt a different rule in their contract, as the above-mentioned rules on warranty are not imperative and can be modified by the parties to the agreement. This is often the case with auction sales, as the general conditions of sale adopt alternative solutions more favourable to the seller. Such changes to the general rules are valid, as provided by Article 234(3) of the SCO.

VART TRANSACTIONS

iPrivate sales and auctions

Private sales and auctions are subject to the freedom of contract so that they are regulated by the agreement of the parties. If there is no specific written or oral agreement, the rules of the SCO apply. In certain cases model contracts have been proposed.23

The entering into force of the Swiss federal act on the International Transfer of Cultural Goods (ITCG) in 2005 led to some changes in the rules relating to sales contracts on cultural

17Case note: Vuille, Chechi and Renold: ‘Case Two Lithographs of the Glaser Collection – Glaser Heirs and Kunstsammlung Basel’, ArThemis database, https://plone.unige.ch/art-adr/cases-affaires/two-lithographs- of-the-glaser-collection-2013-glaser-heirs-and-kunstmuseum-basel/case-note-2013-two-lithographs-of-the- glaser-collection/view (October 2020).

18Stefan Koldehoff and Tobias Timm, Falsche Bilder Echtes Geld, Berlin: Galiani, 2012, p. 14 et seq.

19Article 197 et seq. of the Swiss Code of Obligations (SCO).

20See, e.g., BGE 82 II, p. 411; BGE 114 II, p. 131.

21Article 210 SCO.

22id., Article 24.

23Renold, ‘Contract for the Sale of an Artwork’, in: Marchand, Chappuis and Hirsch (eds), Recueil de contrats commerciaux, Basel: Helbing, 2013, p. 241 et seq.

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objects. In particular, the limitation periods for claims relating to third-party rights or to the warranties of the seller are extended to one year after the buyer has discovered the cause of his or her claim, and in any case to 30 years.24

ii Art loans

Art loans between international museums have increased significantly in recent years.25 According to the Swiss Federal Supreme Court, such loans are part of the ‘standard operations of museums’.26 A distinction must be made between the usual national or international loan transactions between museums or between private individuals and museums, on the one hand, and the permanent loan of artworks, on the other.

Museum loans for the purpose of an ephemeral special exhibition are characterised as loans pursuant to Article 305 et seq. of the SCO and hence as gratuitous contracts. Loans against payment are rare in public museums and could be characterised as rental agreements.27 In the case of loans to private museums, contracts containing some form of remuneration are more often entered into.28

When it comes to international loans, protection against seizure under private or public law is of fundamental importance. The ITCG29 provides for the novelty of a state guarantee of return, which is not stipulated in the UNESCO 1970 Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property.30 This legal instrument enjoys effective protection in Switzerland and Europe against seizures in international relations. Moreover, Switzerland is party to the UN Convention on Jurisdictional Immunities of States and their Property of 2 December 2004.31 In addition, state museums may invoke immunity under public international law for cultural property that constitutes administrative assets. However, in recent years, Switzerland has seen several cases of civil seizures; in particular, Noga v. Soviet Union.32 Moreover, seizures in cases of art looted during the Holocaust, as well as illegal excavations, time and again lead to civil proceedings and judicial assistance in criminal cases, where immunity does not apply. Thus, an ambivalent relationship exists between state immunity and cultural heritage. Several judicial assistance proceedings in criminal matters of the Republic of Italy are currently pending in Switzerland, in which Italy does not recognise immunity under international law in cases of alleged illegal excavations where the museums in question had acquired antiquities in good faith.33

24Articles 196a and 210(3) SCO.

25Peter Mosimann, ‘Der internationale Leihverkehr der Museen’, in: Mosimann and Schönenberger (eds), Art & Law 2014, Bern: Stämpfli Verlag AG, 2014, p. 157 et seq.

26BGE 133 III, p. 421 (‘operations classiques des musées’ in the original French text).

27Article 253 et seq. SCO.

28On the issue overall, see Marc-André Renold, ‘Die Leihe und die Hinterlegung’, in: Mosimann, Renold and Raschèr (eds), Kultur Kunst Recht, 2nd Edition, Basel: Helbing, 2020, p. 831 et seq.; Mosimann, Der internationale Leihverkehr, p. 161 et seq.

29Article 10 et seq.

30Regarding the procedure, see Raschèr, Renold and Desboeufs, ‘Kulturgütertransfergesetz’, in: Kultur Kunst Recht, p. 462 et seq.

31RS 0.273.2.

32BGE 29 January 2008, 5A.334/2007; Checchi and Renold, ‘Staatliche Immunität’, in: Kultur Kunst Recht, pp. 653 et seq.; Mosimann, in: Art & Law 2014, p. 172 et seq.

33On the issue, see Checchi and Renold, ‘Staatliche Immunität’, in: Kultur Kunst Recht, p. 645 et seq.

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