The French courts have asked the European Court of Justice to rule on whether auctioneers can be prevented from passing on the Artist’s Resale Right charge to buyers.
Paragraph 25 of the 2001 Resale Right directive 2001/84/CE states that the seller should be liable but allows for EU member states to vary that liability.
Under current UK rules, all parties to qualifying transactions are deemed 'jointly and severally liable' for the charge, but since its introduction in the UK in 2006, auction houses have tended to make it a condition of purchase that the successful bidder must pay it.
Christie's and others introduced similar conditions in France.
The thinking behind it is that this policy reduces the risk of ARR becoming a barrier to consignment.
However, the Court of Cassation, the senior court in the French legal system, has challenged an appeal court ruling in Paris last December by asking the EU Court of Justice to consider the matter.
Dealers in both France and the UK resent the policy of charging buyers at auction because in many cases it means that the trade end up paying twice, because they feel that they cannot pass on the charge to their own buyers when reselling.
This means that in the bulk of transactions the trade effectively pay 8% in ARR charges on each qualifying work of art they buy and sell.