VAN November/December 2011: The Artists Resale Right

Alex Davis , administrator for the Irish Visual Artists’ Rights Organisation (IVARO), which manages the Resale Right on behalf of its members, looks at the implications for artists.

In less than two months time the Artists Resale Right is due to be fully implemented in Ireland for the benefit of artists’ heirs and beneficiaries. Yet there is still concern that the Government may fail to bring the Right in on time or will introduce it in a manner that minimises the benefits to artists and their families.  Alex Davis, Administrator for the Irish Visual Artists Rights Organisation (IVARO), which manages the Resale Right on behalf of its members, looks at the implications.

Background

The Resale Right allows visual artists an ongoing stake in the value of their work by paying artists a modest royalty when their works are resold through auction houses, galleries, and art dealers.

The Resale Right was initially introduced in recognition of the fact that artworks often don’t achieve their full value until late in an artist’s career or even after their death.  France was the first country to adopt the Resale Right in 1920 in an attempt to address this issue by providing an entitlement in law for artists to share in the ongoing sales of their works and also to allow them to make appropriate provision for their families.

Under an EU Directive, all EU member states had to introduce the Right for living artists by 1 January 2006.  The Irish Government failed to bring it in on time leading the artist Robert Ballagh to take a case against the State for loss of earnings.  Ballagh was successful and the Right was introduced (through rushed regulations) on 13 June 2006, but only for living artists.

The final step for full implementation of the EU Directive is for the Right to also be applied to the resale of works by deceased artists.  The deadline for this is the 1 January 2012 from which point the Right will be enjoyed by the families and beneficiaries of deceased artists for 70 years after the death of the artist.


Cause for celebration

The inclusion of heirs in this scheme is of huge importance and should be a cause for celebration. For some families the Right might be their sole inheritance. Artists’ families are generally responsible for maintaining the artist’s legacy. This can be a very time-consuming and expensive undertaking. Some of the tasks include storage, conservation, cataloguing, maintaining records, authenticating works, responding to requests to reproduce the artist’s works, providing information for exhibitions and catalogues, and assessment of provenance. Artists’ estates have been losing out on important income, which would enable them to continue their valuable work.


Cause for concern

There is good reason to believe that Ireland will once again fail to implement the EU Directive on time. The Government has recently published its legislation programme for the remainder of 2011 to mid 2012 and there is no reference to the Resale Right.  This is despite numerous submissions from IVARO urging them to take action. The result of their inaction is that either the 1 January deadline will not be met, or perhaps worse still, it will be implemented through rushed regulations rather than proper legislation once again.

In 2006 the Right was introduced through Regulations rather than legislation. IVARO has nearly six years experience of trying to make the current regulations work and has encountered numerous difficulties that make certain royalties impossible to collect.  Full legislation is required in order to implement the right in a manner that will make it most meaningful to artists and their families.

Problems with the current regulations

Under the current regulations galleries and art dealers in general have avoided the resale right. IVARO has found it impossible to reach any accord as to payment of the royalty with the vast majority of the commercial art galleries which process re-sales. There is evidence that some of the art market dealers are holding on to the resale royalties collected from the purchasers long past the time that they should have paid the artists or their representatives[1]. IVARO also suspects that some galleries may have put aside the artist’s resale royalty pending the point at which they or the seller is obliged by a court order to pay it to the artist, or the three year time limit for information expires. IVARO is fearful that many of these galleries may not survive the current economic conditions, and this money will be lost entirely to the artists to whom it is due.

Currently in Ireland, only works resold for €3,000 or more are eligible for Resale Royalties, which is the highest threshold in the EU.  Member States are allowed to impose a lower threshold and many have chosen €1000. This option was taken up by the UK, our nearest neighbour, and Europe’s largest art market. In Ireland nearly 98% of art sells at auction for less than €50,000 and 50% sells for less than €1,000[2]. Having the maximum threshold of €3,000 is totally out of step with the Irish art market and has resulted in a relatively small number of artists benefitting from the right. A threshold of €1,000 or lower will benefit a much wider constituency of artists and be a further stimulus for artists to create new work.

A number of other efficiencies could be gained by the drafting of new legislation in this area. As it stands, artists have to be aware of any of their works that sell over the threshold. They then must seek information on the seller from the art market professional for that specific sale. The art market professional has 90 days in which to respond to this request. The artist, or in many cases IVARO, must then apply to the seller for payment of the royalty. It is a laborious, time-consuming and difficult task, especially for individual artists. This system could be streamlined with the introduction of compulsory collective management which would include reporting of qualifying sales.

The EU Commission’s Communication on Copyright Management[3] comes to this conclusion: “Collective management appears also to be the de facto basis for the operation of artists’ resale right under Directive 2001/84/EC, even if it is not mandatory.” Despite this the Irish regulations make no provision to assist or encourage collective management in Ireland.

If compulsory collective management was introduced and a collecting society was appointed this would mean that resale royalties would be automatically collected on behalf of all rights holders, whether or not they are members of the collecting society. Art Market Professionals would be required to supply the collecting society with data after each sale. The collecting society could then collect the royalty from the seller and distribute the proceeds to the rights holder without delay. Royalties for foreign artists whose work is resold in Ireland would also automatically be collected ensuring that Ireland complies with it’s obligation to “ensure that amounts intended for authors who are nationals of other Member States are in fact collected and distributed.” – Article 28, EU Directive 2001/84/EC.

Solutions

The rationale and founding principle of the resale right is that artists and their heirs share in the increasing value and exploitation of their works. Together with other means of support, it represents an important factor in strengthening the artist’s security and economic autonomy, without any additional cost to the exchequer.   In order to maximise the efficient implementation of the resale right IVARO makes the following recommendations:

  • The resale right should be fully implemented through primary legislation to benefit artists and their heirs.
  • The minimum threshold of the resale to which the right applies should be set at €1,000.
  • That legislation requires compulsory collective management as a means of collecting, administering and distributing the artists’ resale right.
  • That the royalty rate should be set at 5% for resales below €50,000.

IVARO is calling on artists and their supporters to sign a petition supporting the full implementation of the Artists Resale Right.  To sign the petition please visit: www.ipetitions.com/petition/dds

Even better still, write to the Government, setting out your support for full Implementation. You could outline your work as an artist, any difficulties you’ve had making a living from your creative work and the difference the Resale Right could make to your family.  Contact details for the two relevant Ministers are below.

Minister Richard Bruton TD

Department Jobs, Enterprise and Innovation

Kildare Street

Dublin 2

Minister Jimmy Deenihan TD

Department of Arts, Heritage and the Gaeltacht

23 Kildare Street

Dublin 2


[1] Review of the Fine Art Market, The Property Valuer, James O’Halloran.

[2] An Investor’s Guide to the Art Market by Dr. Clare McAndrew. Published by Liffey Press.

[3] “The management of Copyright and Related Rights in the Internal market” COM (2004) 261 final

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