The richness of our cultural heritage has led the Italian legislation to become highly restrictive in matter of export and protection earlier compared to other countries. What is the economic impact of these goods bound? What are the restrictions on the trade in works of art?
On July 18 at IULM in Milan took place the conference “Found in Italy, sold in Geneva. First results on the Questionnaire for the proposed amendment to the legislation on the art market,” in which are presented the results of the second survey from the Montepaschi Group Research on the economic impacts of the notification in Italian art market.
To discuss this hot topic related to our art market have intervened Giancarlo Graziani (professor of art and antiques market IULM University of Milan), Pietro Ripa (area strategic planning and extraordinary operations Montepaschi Group), Filippo Lotti (CEO of Sotheby’s Italy), Filippo Cavazzoni (editor Istituto Bruno Leoni), Alfonso Valentino Casalini (IULM), moderated by Paolo Manazza (Corriere Economia, director ArtsLife).
The issue discussed was about “cultural goods which are the work of author no longer living, whose execution dates back more than fifty years.”
Let’s briefly review what is the Declaration of the cultural interest and the consequent notification set out in the Italian Legislative Decree 22 January 2004, n. 42 Code of cultural heritage and landscape.
The existence of cultural interest is determined by the so-called Declaration of the cultural interest and must be notified to the owner, possessor or holder of the property in question. Once notified the interest, if the owner intends to proceed with the sale or alienation of the property, the State has the power to intervene with the right of first refusal at the same price stated in the sales contract.
In addition, these notified assets are subjected to strict control over the international circulation and it is forbidden the final exit from Italian territory.
This prohibition places stricter rules to the owners of notified prperties, but also to antiquities dealers and others actors in the industry that are shrinking the area of action at the national level, as well as negatively affect the economic value of the asset. In addition, the “fear” of the notification arrives to act as a deterrent for collectors, they fail to lend or exhibit their works for fear that they would be subsequently declared of cultural interest. Finally, with respect to the previous edition of the study of MPS, a growing number of respondents believe that the institution of notification favors the illegal exportation of works of art: 88, 6% of respondents, compared to 78.6 % of the last year.
Nevertheless, according to the study of MPS, 72.7% of respondents believe that the institution of the notification is the appropriate instrument to prevent the escape of Italian masterpieces abroad. There is also a 58.1% who seen in the notification a kind of valuable certification by the State, admitting possible positive effects on prices.
This percentage collides with 82% of the sample, which considers that the notification has a negative economic impact on the high-end works. The 27.5% believe that the impact is greater than 40% in value, while only 17.6% said that the impact is zero.
The limitation to the transfer not only makes these works are cut off from the international market, which follows a depreciation of the value, but also infects the Italian market in general, helping to expand its weakness in the international scene.
What is the situation in other countries? A protectionist culture like ours is much more moderate in other European countries, which are also provided tax relief and compensation for owners of this goods.
In Germany, for example, there are tax benefits to the owner of the notified object, the heritage protection is non-existent at the federal level, being delegated to the individual Laender. The same goes for the United States, without a corpus of homogenous rules for the protection and very oriented to the protection of private property at the expense of the public. In the United Kingdom legislation on the protection exists only since 1968, and applies a substantial purchase obligation by the State each time takes the notification of a work.
France has instead developed a concept of national heritage ever since the Revolution, while maintaining a strong liberalism which leads to a very relaxed legislation. There is an obligation to notify the good out of the country but, as a reimbursement to the owner for the economic damage that the constraint implies, the Ministry remains very cautious in the application.
What are the solutions that emerged from the study of MPS? Among the alternatives, 50% of respondents would change the time limit of fifty years after its execution. In addition, in the case of foreign sales, 41.9% of the sample would support the hypothesis of an auction of a maximum of six months in order to find a buyer inside. If at the end of the six months, the auction did not produce the desired result, the work can come out of national boundaries.
This annual study of MPS brings to the fore a discussion started for a long time, how difficult it is to reconcile the needs of the delicate issue of the protection with the needs of the market, which would take a more liberal and permissive legislation, abolishing borders for treasures of inestimable importance – or “interest”, to use the terminology of the Code.