Grossman LLP | Recent Developments Involving International Artifacts Serve As Reminder of Potential Pitfalls
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  • Recent Developments Involving International Artifacts Serve As Reminder of Potential Pitfalls
    Several stories in the news recently have turned a spotlight on the complex world of collecting art and historical artifacts across international borders—and serve as a reminder of the importance of diligence and legal advice in such transactions.
    Last month, the International Council of Museums released a new “Red List,” a resource that is intended to help museums and others who deal in art and antiquities understand categories of archaeological or art objects that come from vulnerable areas in the world, in order to prevent them being sold or illegally exported.  These Red Lists generally focus on countries where—due to war, unrest, or other political circumstances— the problem of looted or otherwise illegally-obtained artifacts is particularly rampant.  Since 2000, ICOM has published 17 different Red Lists, focusing on countries from Colombia to Cambodia, but many of the Red Lists involve countries in the Middle East that have been affected by war in recent decades, including Iraq, Afghanistan, Egypt, Libya, and Syria.   (A recent analysis of international art theft provides eye-opening statistics about the scope of art theft around the world, and particularly in the Middle East.)  The newest Red List focuses on Yemen and aims to warn the art community about examples of the types of artifacts from Yemen that may be cropping up on the market through theft or illegal excavation.
    To underscore the risks inherent in transacting in antiquities without adequate information, advice, and documentation, we turn to the long-running story of the legal wranglings involving Hobby Lobby.  And we don’t mean that Supreme Court case about insurance coverage for contraceptives; we mean the scandal involving Hobby Lobby’s acquisition of a huge number of ancient artifacts believed to have been smuggled into the United States from war-torn Iraq.  (Hobby Lobby’s interest in these artifacts stems from the fact that it is owned by an Evangelical Christian family that has made the Bible part of its mission; its CEO, Steve Green, is also the chairman of the Museum of the Bible which opened in Washington, D.C. last year.)  Last summer, Hobby Lobby reached a settlement with U.S. authorities in which it paid a hefty fine and forfeited thousands of artifacts.  The government asserted that Hobby Lobby had ignored multiple “red flags” that should have alerted it to the possibility that the items had a problematic provenance; those flags included conflicting information about how the pieces had been acquired, as well as unusual payment instructions.  The items were shipped to Hobby Lobby in packages that indicated that they were merely tiles from Turkey.  Reports indicate that the company had sought input from an expert in cultural property issues but nevertheless went through with the purchases.  And as recently as January, the fallout was ongoing, as Hobby Lobby turned over another batch of hundreds more items to authorities.  At the time of the government settlement, Hobby Lobby issued a statement that the errors were due to the company’s inexperience with this type of collecting; “The Company was new to the world of acquiring these items, and did not fully appreciate the complexities of the acquisitions process.  This resulted in some regrettable mistakes.”
    In a variation on this theme, we also note a recent story about a federal investigation into money-laundering and corruption— involving artworks including a Van Gogh sketch, a Monet painting, a Basquiat collage, an Arbus photograph, and a Calder mobile, to name a few.  The convoluted tale has even ensnared Hollywood celebrities, with actor Leonardo DiCaprio agreeing to turn over to authorities artworks he received as gifts or donations to charity events, from individuals tied to a scheme of embezzling from the Malaysian government.  Commentators have pointed out that artworks are often uniquely attractive vehicles for money-laundering, due to the fact that they are easily stored and the norms of the industry allow for confidentiality.
    It’s certainly not news that, where there is war, unrest, and corruption, there will be shady art deals.  After all, the terrible repercussions of World War II are still being felt in the art world today.  And we are still in the midst of important public conversations—from the halls of the French and Turkish governments to the recent blockbuster film Black Panther— about repatriation of cultural artifacts.  But for those engaged in cross-border art deals, the best approach is always prevention—through due diligence, provenance research, and sound legal advice.