World Coins

Dealers push back against cultural property law

In Munich, police enforcing cultural property laws seized these objects from a dealer who was arrested during the March 4 and 5, 2017, Numismata show.

Image courtesy of the Bavarian State Police.

Germany’s 2016 law governing cultural property, which includes the sale of coins, is in contradiction with and “an abuse” of European Union law, according to a white paper released by representatives of two law offices in Europe. 

The eight-page letter was filed Sept. 19 with the European Commission as part of a broader strategy to combat the regulations, which some collectors and dealers suggest are onerous. 

Lawyers with backgrounds in cultural property law and experience with outreach to the European Commission helped craft the letter, according to Ulrich Künker, one of the organizers of the lobbying effort.

Balancing the negatives and positives of a problem coin”Astute collectors find that buying a ‘problem coin’ can be a bit of a balancing act, but the rewards can be great. Also in our Nov. 6 issue, Michael Fahey offers some tips on grading Mint State Barber half dollars.

The Act on the Protection of Cultural Property (known as Kulturgutschutzgesetz or KGSG in German) went into affect on Aug. 6, 2016. 

“The new law pretends to be just another legal instrument protecting national cultural property and cultural heritage,” like laws in other EU member states, according to the letter. 

However, the law, further according to the white paper, “does not respect the balance between the protection of cultural property and the principle of free movement of goods accepted by the EU treaties; imposes unjustified and unmanageable legal and economic burdens on all persons legitimately trading art or other cultural properties like antiques, paintings or coins; results in new restrictions to the right to free movement and residence of Union citizens within the European Union; [and] turns Germany and its private traders and collectors into unilateral custodians of the world’s cultural heritage, including the cultural heritage of all other EU Member States.” 

What does the law say?

Items covered by the regulations in the 2016 act do not have to originate in Germany to fall under the regulations. 

Items of “national cultural property” are supposed to be entered into a national registry, but the German law does not provide a framework for what items are required to be entered.

Since the first cultural property law came into force in Germany in 1919, only 2,700 objects have been included in the registry, according to the white paper. 

Connect with Coin World:  

Sign up for our free eNewsletter
Like us on Facebook  
Follow us on Twitter

A broad definition of what constitutes national cultural property means that any object imported into Germany, even if originating outside of Germany, could potentially be considered national cultural property. For instance, several paintings by American artist Andy Warhol that were consigned by a German casino to an international auction house and sold for millions of dollars would, under the regulations, be considered to have cultural worth. 

When the regulations were proposed, an English language statement from the office of Germany’s Minister of Culture said the regulations were necessary to “improve the protection of cultural goods and take more effective action against trafficking in cultural property.” 

The new rules were also created to comply with a European Union directive from 2014, but Germany was the first nation to face changes to meet those demands. 

The stated objective of the directive is to “ensure the physical return of the cultural objects to the Member State from whose territory those objects have been unlawfully removed, irrespective of the property rights applying to such objects,” according to the directive. 

Germany’s new cultural property law is also intended to improve the implementation of the 1970 UNESCO Convention and bring German law in line with international standards, the Ministry of Culture said in 2015.

Issues with the law

Opponents of the law say that the requirement of export licenses for very general items, even for items that exceed the law’s age and value thresholds and even for trade inside the EU, will create a flood of export applications. 

As a result, there may be as many as 33,000 license applications for as many as 75,000 to 100,000 objects, far surpassing the German governments’ estimates of 2,000 applications. 

This requirement of an export license will stifle trade, especially in the case of auctions, where bids would be conditional upon receipt of the license. 

Importing objects is also an issue under the new law, and places the burden of proof on the importer to prove that objects are not considered cultural property in other EU member states or any other nation covered by cultural property laws.

“The problem arises particularly in the trade of coins: coins have been traded without documentation for centuries and it happens often that coins are discovered by accident,” according to the white paper. “Thus, tracing the origin and movements of the coins is impossible.”

The experts point out that Article 36 of the Treaty on the Functioning of the European Union prohibits quantitative restrictions on imports and exports, and all measures having equivalent effect, between EU member states.

The German law “is abusing both the text and the intention of Article 36 TFEU,” for various reasons, according to the letter.

The phrasing and terms of the cultural property law result in the infringement of other fundamental EU freedoms, the letter said, pointing to German auctioneers, art dealers and traders that “will be heavily discriminated in regards to their counterparts in other EU member states.” 

A German moving to Belgium or Italy must apply for export licenses for each of their books, coins, antiques and pictures, and upon their return to Germany would have their goods potentially classified as unlawful cultural property, the letter said. 

Community Comments