Brussels, 19 July 2001
Commission welcomes adoption of the Directive on resale rights for the benefit of the authors of original works of art
The European Commission notes with satisfaction that the Council has adopted the Directive on the resale right for the benefit of the author of an original work of art. Following the European Parliament on 3 July, the Council has now approved the outcome of the conciliation procedure between the Parliament and the Council. This Directive will give artists the benefit of this right, regardless of where in the Union their works are sold. In addition, it will give the Commission a basis on which to promote the international recognition of resale rights. The Commission nevertheless regrets that the time limit for implementing the Directive is exceptionally long 1 January 2006 and that some Member States will have a further four years before applying some of its provisions. These remote time limits may therefore have the effect of holding up the full effects of harmonisation for up to a decade. The Commission wishes to stress that these time limits are exceptional and must remain so in order to maintain the effectiveness of Community action within the single market.
Frits Bolkestein, the member of the Commission responsible for the internal market, said: "This Directive is a major step in Community action to ensure the proper working of the modern and contemporary art market in the European Union. I am very glad that we have been able to end the discrimination suffered by some artists resulting from where it their works are resold."
But Mr Bolkestein also had to admit to some disappointment: "I would have preferred to see a higher level of harmonisation and earlier implementation". Emphasising this second point, he said: "Ten years is better than the fifteen the Council were originally contemplating, but it is still a very long time. These time limits must remain the exception in order to guarantee the effectiveness of Community action within the single market."
The Directive will ensure that the EU's modern and contemporary art market works well, by generalising and harmonising resale rights within the single market.
Time limits for implementation
Member States must transpose the Directive into national law by 1 January 2006. But those which do not apply resale rights when the Directive comes into force will be able to restrict its application to living artists for a further four years until 1 January 2010. And if the Member State requests, that can be extended for a further two years subject to a consultation and transparency mechanism in which the Commission will play a part.
The time limits for implementation had been at the heart of the disagreement between the Commission and the Council during the Council's discussion of its common position.
Under the Directive, resale rights will apply to any sale where the price exceeds €3000. This means that some works of art which rarely attain such prices e.g. sketches, engravings and photographs are in practice unlikely to be covered by the Directive. It is primarily sculpture and paintings which are likely to give rise to the payment of resale rights.
The Commission regrets that this restriction on the scope of the Directive will prevent many artists from benefiting from its harmonising effects. Even so, the effect of the restriction is tempered by the option given to Member States of applying resale rights to sales of less than €3000: in these cases the directive provides for a resale right of not less than 4% of the selling price.
Intellectual property rights for artists
Resale rights constitute an intellectual property right which allows an artist or his heirs to receive a percentage of the selling price of a work of art when it is resold by an art-market professional such as an auctioneer, a gallery or any other art dealer. The aim is to allow artists and their beneficiaries to share in the seller's profit on the increased value of their works. It restores some balance between the economic situation of artists and that of other creative workers who have the possibility of exploiting their works several times over.
The right is written into the Berne Convention and the legislation of 11 of the 15 Member States. In practice, nine actually apply it, but their approaches differ substantially in the type of work subject to resale rights, the type of transaction giving entitlement to payment, and the rates applicable.
Ensuring that sales do not shift outside the Union
The European art markets' main competitor for the sale of modern and contemporary works is New York. The USA does not recognise resale rights, and art market professionals fear that sales will shift to the United States or Switzerland.
Every precaution has been taken in the Directive to prevent any such shift taking place. To ensure that there is no incentive to move sales of modern art in the highest price-brackets outside the Community, the Directive introduces the principle of a tapering scale of rates. Artists will receive a percentage of the resale price of their works ranging from 4% to 0.25% in five bands of selling price:
In addition, the maximum an artist can receive as resale rights on a single sale is limited to €12,500.
The Commission has also agreed that once the Directive has been adopted and the Council has given the go-ahead, it will open negotiations to extend artists' resale rights internationally.