Doucai winepot at Nagel in Stuttgart
A thing of the past? In 2013 Nagel in Stuttgart sold this 18th century imperial doucai winepot for €3.73m – a German auction record.

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Despite protests from all quarters of Germany’s art market, the Bundestag approved the Kulturgutschutzgesetz – designed to control the movement of ‘goods of cultural interest’ to and from Germany – on July 8.

With its final hurdle, the signature of President Joachim Gauck, expected to be a formality, it could become law as early as August 1.

Sales of Asian art, heavily dependent upon an overseas audience, will be the first to move from German soil.

‘A bureaucratic monster’

Under the new due diligence guidelines, the Kulturgutschutzgesetz demands proof of provenance before ‘cultural goods’ are sold – paperwork that is often not available. Export licences are also required when these items – some with relatively modest values of €2500 – are sold to a foreign buyer.

“The law brings forth a new bureaucratic monster,” said Robert Ketterer, CEO of Munich auction house Ketterer Kunst. “To meet the requirements, hundreds of new civil servant posts will need to be created in Germany.”

Michael Trautmann, head of  the Asian department at Nagel in Stuttgart, fears that it will take months for the authorities to process the necessary applications for a sale – “a nightmare for auctioneers, consignors and buyers alike”.

Nagel’s sales of Asian art in Germany (in recent years accounting for two-thirds of income) will now cease and move to Salzburg in Austria.

The firm had already brought forward their last Asian art sale from June to May, to allow all pre-sale imports and post-sale exports of sold objects to be dealt with under the current regulations.

Lempertz in Cologne say they will be moving sales of Asian art (the next in December) and potentially some Old Masters sales to Brussels. They told ATG this represents an administrative headache – individual consignors must apply to move their items out of the country – but it will allow items to be sold without the need to prove their recent history or for the red-tape of export licences.

One German auctioneer, who asked not be named for fear of alarming clients, told ATG: “The anger is huge. The politicians have not listened. This is a populist law – an easy answer to a complex situation.

“In Germany we already have 19% VAT on art, Droit de Suite (Artist’s Resale Right), the Künstlersozialkasse (The Artists’ Social Act) and now the Kulturgutschutzgesetz. Galleries are now moving or have already fled.

“We are hoping that the law will be challenged but by the time that happens – in perhaps two or three years – the damage will already have been done.”

Stakeholders fear the new legislation will weaken the German market that currently accounts for 2% of the global art trade. Many works have already been shipped to London in anticipation of the law change.

Germany’s cultural goods law explained

The catalysts to the legislation put forward by German culture minister Monika Grütters in 2015 were two-fold: fears that Germany could contribute to the trade in looted antiquities and by the outcry that followed the 2014 sale at Christie’s New York of two Andy Warhols consigned by a German state-owned casino conglomerate.

The new law says that dealers and collectors must obtain approval in order to export outside the EU any work of art that is older than 50 years and priced over €150,000. Within the EU, an export permit is required for works more than 75 years old and over €300,000.

Sliding thresholds apply to different types of object. Under the new due diligence guidelines the owner of ‘cultural goods’ with a value of at least €2500 would require proof of the item’s provenance over the previous 20 years. Many items need to be accompanied by an export licence from the country of origin before they can be offered for sale.

Stipulations in the law reverse the burden of proof when it comes to objects in legal dispute.

Some small concessions were made to the bill before its final reading, including a last-minute exception for coins.