Vasilisa Neshataeva
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English Russian

The Interview: Vasilisa Neshataeva, author of the book “Cultural Property. Value and Law”

Vasilisa Neshataeva
Vasilisa Neshataeva

Regulatory measures affecting Russian and international art market is an important objective of providing transparency of art transactions. Another important issue in art transactions is professional ethics of sellers, which is documented in the recommendations and guidelines for professional art businesses.

Vasilisa Neshataeva, Phd, AP International law department of the Russian State University of Justice, author of the book “Cultural Property. Value and Law” (available in Russian and recommended to all interested in art business) speaks about the possibility of creating national control in the Russian art market, protection of a buyer and liabilities of a seller.

– Buyer-seller relationships in the art market are based on the principle “caveat emptor”, which implies legal and financial risks to be carried by a buyer. What kind of legal liabilities should be carried by a seller in such environment? Is there any difference in legal liabilities carried by an owner of an artwork being sold and an agent?

– The principle “caveat emptor” means “Let the buyer beware”. Considering the art market is often free from the government control (for example, in Russia such business activity is not licensed) a buyer remains a vulnerable figure. A buyer should independently analyse legal and financial risks of an art transaction.

It is possible to stipulate the measures of civil liability of a seller in a contract in accordance with law applicable to the art transaction (for example, the transactions where an owner sells an artwork are executed as a contract of sale, and those featuring an agent via a commission contract). When entering into a relationship with a big auction house it is important to be aware that such entities usually use standard contracts where legal liability of the seller is strictly limited.

Besides that, bad faith seller may be hold criminally liable for illicit trafficking in cultural property, should a sold artwork turn out a forgery or stolen cultural property. However, a serious evidentiary basis is essential to hold a seller liable.

In case a seller neglects his liabilities, a buyer may appeal to the corresponding professional association and file a complaint. Unfortunately, not all sellers become members of such associations. Nevertheless, the leading players in the art market are not likely to risk their reputation.

In any case I would like to encourage the collectors to independently estimate and forecast all the risks related to transactions in cultural property. It is better to be prepared properly in advance, rather than to deal with long-term dispute settlement with additional financial expenses later.

– How important is the role of cultural property registers in combating the theft, illicit trafficking and forgeries of cultural property? Is creation of a national cultural property register possible in Russia? May a purchaser be considered diligent if an object prior to acquisition is checked with one or several art and antique databases including international?

– Promotion of public cultural property databases may enhance the measures against illicit trafficking in cultural property. Such practical experience already exists in some countries. Nevertheless in Russia such initiative attempted in the form of the draft law “About trafficking in cultural property on the territory of Russia” has failed. Many experts warn about possible negative consequences of the implementation of such law and the existence of a specialised art and antique register. In particular, such measure is regarded by the art business community as excessive control and reduction of trade in cultural property. However, such initiative may be implemented in Russia.

Nevertheless, I suppose that a public register of stolen cultural property (like private database The Art Loss Register) may become a good compromise allowing efficient cooperation between the state and the art business community. It is necessary to remember that we already live in new reality: Russia is a member of the supranational integration union – Eurasian Economic Union, together with Armenia, Belorussia, Kazakhstan and Kirgizia. Eurasian Economic Union exists within a single border. With the existence of such union, where supranational bodies take charge of economic and legal matters of the member states, it would be useful to create such a register on the level of the Eurasian Economic Union. Certainly, it would be difficult to technically implement such universal database. That is why even drafting this idea would take time.

The definition of “good faith purchaser” of cultural property from Russian perspective should be reviewed as a general term and its’ specification is to be determined by the court according to the circumstances of every individual case. The rules of good faith purchasing are being regulated by the Civil Code of the Russian Federation art. 302, which proclaims the principle “did not know/could not know”. Naturally the court would consider all circumstances of the case.

Scrupulous investigation of the provenance made by a buyer before the purchase (also using existing databases) would constitute the proof of diligence of a buyer, however it would make only a part of the whole issue.

It should be remembered that a Russian citizen might become involved in the litigation regarding cultural property on the territory of another state. Such cases are regulated by the law of that another state, and not by the Civil Code of the Russian Federation. Different countries have own definition of “good faith purchaser” and the use of certain databases may be considered insufficient measure of provenance investigation of the disputed cultural property.

– The Responsible Art Market initiative (RAM) (established by Christie's and other members, such as SGS, Seydoux & Associés Fine Art, University of Geneva, etc.) is intended to change and raise due diligence standards in the art and antique market. The Guidelines on combatting Money Laundering and Terrorist Financing issued by RAM in January 2017 contain step-by-step guidelines on buyer-seller interaction, as well as “Red Flag List” for typical situations indicting suspicious transactions. How this initiative may influence Russian art market? Could it change existing relationships between Western sellers and Russian buyers? How it may change behaviour of Russian buyers? Could such guidelines be applicable to the Russian art market, and should a similar initiative be adopted in Russia?

– The field of cultural property trade is very sensitive, as it involves many players of the art market (governments, private individuals, museums etc.). In this relation all initiatives of tight legal regulation on international and supranational levels lie through difficult and thorny path, and thus may culminate in a declarative document only. In the attempt to reach self-regulation of the art market the trend of adopting various recommendations by the professional art market community is increasing. Such initiatives are important as they frame professional ethics. However as such these guidelines are a mere recommendation for the art market businesses rather than a normative legal act. Nevertheless, the parties may agree to adopt these rules in the contract and make them compulsory; such practice would make the trade in cultural property more transparent. I would like to refer to the International Code of Ethics for Dealers in Cultural Property, developed in 1999 by UNESCO. Although compliance with this Code is not compulsory, art. 8 states the sellers may jointly sign this Code and assign the authority responsible for the monitoring of compliance with the code. In case of noncompliance and misconduct of sellers with the code, the authority dealing with a complaint carries out an investigation and publishes corresponding results.

Certainly, the codes of professional ethics build confidence in the art market.

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