Through a public consultation paper issued in June 2008, the UK Intellectual Property Office (UKIPO) has been seeking the views of art market professionals, artists, representatives of artists' collecting societies, and from deceased artists' estates, in order to assess the likely impact on the UK art market of the extension of the Artist's Resale Right (ARR) to deceased artists. ARR was enacted into UK law in February 2006, but applied only to living UK artists and not to the estates of artists who had died within the past 70 years.
The reason for the consultation is that, when the EU required all its Member States to enact ARR into their national laws by 2006, four countries were allowed to 'derogate' or 'delay' implementation of the right in respect of deceased artists, until January 1, 2010: the Republic of Ireland, the Netherlands, Austria and the UK. The EU allowed those four countries to derogate/delay because none had previously enacted any form of ARR into their national laws (as had the then II other Member States) and were therefore given a few years first to devise and then to establish a workable ARR system for living artists, and to assess whether their respective art markets might suffer damage from contemporary art sales possibly relocating to non-ARR countries (such as the US, Switzerland, or the People's Republic of China) in order to avoid the ARR scheme.
If the UK government allows the lapse of its derogation/delay, then from January 1, 2010 ARR will also apply to benefit the estates of UK artists who will have died within the previous 70 years. The UK government can, if it wishes, extend its derogation/delay until January 1, 2012, in which case it must present a reasoned case to persuade the EU Commission by December 31, 2008. Hence UKIPO's consultation document, which openly states the UK government's current intention to seek that further derogation/delay--for reasons explored below.
Readers will recall that ARR entitles UK artists to receive a small percentage of the purchase price of works (on a sliding scale between 0.25% and 4% of the resale price, up to a maximum of 12,500 [euro], for each work sold) whenever a UK art market professional is involved in the resale of a work for 1,000 [euro] or more. The resold artwork must be one that is also protected by copyright law, which is why ARR lasts for the same length as copyright, for up to 70 years after the artist's death (except in the special case of the four countries including the UK that have opted to derogate/delay applying the right to deceased artists until 2010). Art market professionals collect and pay the royalty to one of the two non-profit collecting societies in the UK (the Design and Artists Copyright Society, or the Artists' Collecting Society), which then relay such payment to artists who have registered with them.
UKIPO offers two principal reasons for extending the derogation/delay for at least a further two years, from 2010 to 2012. First, 'to provide an extended period of adaptation for the art market, and possibly collecting societies, to ensure that the right can be managed effectively and efficiently'. Second, 'to minimise any potential negative impact on the market's economic viability'. In other words, UKIPO needs to be sure that the collecting societies and art market professionals have worked well together over the past two years, in implementing ARR in the UK, and to know whether implementation of ARR in the UK has driven significant numbers of sales to the US or Switzerland or China.
Independent research conducted over the past year into the operation of ARR in the UK reports that the art market is currently expanding rapidly, that the UK's share has grown more than the US's in the past two years (since the introduction of ARR early in 2006), and that, to date, the impact of ARR on the art market has been minimal. …