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I. Europe, culture and the art market
304
The Common Market and the Art Market
I. Europe, Culture and the Art Market Introduction MICHEL VANDEN ABEELE What’s it all about? The idea of placing the cultural aspect of the European experience side by side with materialism in the form of trade and commerce in works of art may strike some people as incongruous, shocking or frankly provocative. Relations between art and money appear to be afflicted by a Pharaonic curse, or, maybe, a covert snobbishness. As Raymonde Moulin has clearly shown in her doctoral thesis’ the relation between artistic activity-something elitist, unhealthy or gratuitous-and its involvement in the world of commerce and economics is a strange one. This is reflected in the myth of the disinterested artist, destined to die in gloomy penury while his widow and heirs fill their pockets in the company of collectors and dealers. And, of course, both specialist and the non-specialist press will be quick to report the fabulous sums which certain pieces realize at auction. The international market continues to develop despite, or possibly because of, the world economic crisis-the turnover of the auctioneers and certain well-known London houses makes bankers rub their hands with delight. To own certain objects and be able to buy and sell them is a clear sign of having joined the establishment. Such developments, sedulously fostered by the media, mean that the social and economic activities involved in conserving, producing and distributing cultural property and activities? take place within a highly artificial context. There can be no doubt that art is an economic activity. 1 do not want to become involved in a discussion on the purpose of art, but it cannot be denied that the artist becomes an actor on the economic scene as soon as he produces something, whether or not with a commercial intention. If this is taken to its logical conclusion, we could also argue that the amateur artist, the weekend painter, is also an economic actor, although principally as a consumer. Here is ample justification for artistic activities and the art market to be brought within the purview of the Common Market, the European Economic Community established by Treaty in 1958. At the same time, however, the special nature of artistic activity, the fact that it is a cultural phenomenon, means that it cannot be defined by treaties, be it the Treaty of Rome or the Council of Europe’s convention on cultural co-operation. The concept of European culture-on which thousands of speeches have been made-cannot be formally circumscribed. Its principal ingredients are diversity and independence-administrative and institutional rules are anathema to it. At a political level, the tinge of bitterness felt by those who hoped that Europe had something more than mere material progress to offer has often been noted. Positions and initiatives have been taken at the highest level in an attempt to give the European venture a cultural dimension. For example, the communique issued after the first Conference of Heads of State or of Government of the enlarged Community held in Paris on 19 and 20 October 1972 stated that: ‘In the European spirit special attention will be paid to non-material values and wealth . . . and the final communique from the Copenhagen so that progress shall serve mankind’, Summit on 14 and 15 December 1973 added that The diversity of cultures within the framework of a common European civilization, the attachment to common values and principles, the increasing convergence of attitudes to
The Common Market
and the Art Market
305
life, the
awareness of having specific interests in common and the determination to take part in the construction of a united Europe, all give the European Identity its originality and its own dynamism. For its part, Parliament passed resolutions in 1974 and 19793 vigorously supporting the Commission’s action on cultural matters. More recently, the moves to give the Community a new impetus have made explicit reference to its cultural dimension. The French Government’s memorandum on revitalization of the Community includes the following: ‘There is no economic power without political and cultural purpose.’ and The French Government considers that European integration will only progress if culture, which is one of the basic components of the identity of the European peoples, becomes a factor in the Member States’ endeavour; in this connection it welcomes the Italian Government’s proposal to convene an informal conference of Ministers for Culture in the Ten in the near future. The Draft European explicit:
Act presented by Mr Genscher on 4 November
1981 was still more
Convinced that the unification of Europe in freedom and respect for its diversity will enable it to make progress and develop its culture and thus contribute to the maintenance of equilibrium in the world and to the preservation of peace, . . . close cultural cooperation between the Member States in order to promote an awareness of common cultural origins as a facet of the European identity, while at the same time drawing on the existing variety of individual traditions and intensifying the mutual exchange of experience, particularly between young people, . . . In addition, a Council of Ministers responsible for cultural cooperation shall be established. . . . The Council of Ministers responsible for cultural cooperation shall hold regular exchanges of views on close co-operation in order to harmonize their positions on cultural matters as far as possible. Although these texts are couched in general terms, they place cultural action already undertaken or contemplated in a specific context and also amplify or clarify the formal agreements made in the broader context of the Council of Europe, to which twenty-one countries belong. This body has for some time endeavoured to promote co-operation on culture and education. In 19.59, it took over responsibility for cultural matters from the Western European Union and launched its practical activities by establishing a Cultural Fund, setting up an autonomous Council for Cultural Co-operation, studying the goals to be pursued in the cultural field and organizing events of interest to the whole of Europe. How is it then, it may be asked, that all these resolutions, commitments and hundreds of speeches have yielded so little real progress? What are all the hurdles we meet when, abandoning the realm of far-sighted and wide-ranging ideas, we get down to the practical task of creating a genuine common market for artists and works of art in Europe? How can the gap between words and deeds be explained? To be precise, the lack of a real common market for artists and works of art is symptomatic of the deep gulf which separates the inspiring principles of the Community from its practice. Therein lies the truth. The reports and debates at the study-day on ‘The Common Market and Art Market’ organized by the Institute of European Studies represent a special case, but they are the tip of an iceberg constituted by the general problem of creating an integrated economic area. New problems
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spring up on all sides to impede the practical establishment of the Common Market. Commission noted in a recent document designed to promote European unity,
As the
The customs union was one of the Community’s first real achievements. If it is to be complete, the variety of remaining barriers which are still preventing the completion of the single market must as a priority be eliminated. . It is quite legitimate for public authorities-and Community authorities whenever their powers permit-to maintain their contribution to the creation of a better economic environment. . . .) The tendency to defy the Treaties and renege on promises by re-erecting barriers around national markets is all too clear. This was one reason why the Commission launched a general programme for the strengthening of the internal market and made it one of its priorities for 1982.” Warnings and measures to safeguard the Community’s achievements are not enough: we must investigate the real reasons why national barriers are reappearing. A quick glance reveals a number of political, economic and social reasons: the economic crisis, the emergence of pressure groups, a desire for reassurance in an unstable world, vested interests and the terribly conservative-force of habit. To all these we may add the well-known phenomena of bureaucracy. The purpose of this study-day is to attempt to shed some light on the reasons for the difficulties experienced by the art market. The aim is to show that these obstacles are the same as those which exist in other areas, and the hope is that we shall find solutions which can be applied, mutatis mutandis, to more complex subjects or ones where the public interest is less obvious or less surrounded by mystique. After ten years of talk, we are still nowhere near attaining a common market in works of art. Community law contains no specific provisions on the movement of artists and works of art,h and neither do most national laws-in Belgium, for example, the ordinary law applies.7 The remaining barriers to the free movement of works of art are interlinked with barriers to the free movement of persons, services, capital and goods in general. The work of art stands at the hub of four freedoms, and this study-day on the common market in art may provoke more general thoughts on European integration. This would be apposite at a moment when the Commission is stressing the need to preserve and strengthen the Community’s internal market and remove the remaining barriers to a single market;x its President is drawing attention to internal threats to the Community and advocating a quantum leap to a higher level of integration and development.” The countries of Europe have for centuries been united by a common culture and civilization:“’ Victor Hugo dreamed of a United States of Europe which would be an artistic power capable of rivalling the United States of America.” At the moment, however, we must admit that things have come to a standstill. What we have to discover is whether the barriers which remain are serious or trivial. For the sake of clarity, it would now be as well to survey rapidly, what has been achieved in the fields of freedom of movement of persons, services, goods and capital.
Free
Movement
of Persons
As is well known, the free movement of persons stems from a number of basic principles: the abolition of discrimination against nationals of the other Member States, freedom of movement and residence within the Member States and the right to exercise any professional activity apart from employment in public service in a Member State other than that of origin. The only exceptions permitted by the Treaty of Rome are those based on public policy, public security or public health. The Commission’s greatest successes in this field concern the two million employed persons in the Community to whom Regulation No. 38/64,” and
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Regulation No 1612/68” which succeeded it, gave the right to work in another Member State. Community legislation on social security has also made an important contribution to the free movement of such workers. Similar freedom for the self-employed such as artists, was, and still remains, more difficult to achieve, mainly because of their wide variety of circumstances and needs. The General Programme of 18 December 1961” introduced the principle of equal treatment for nationals and citizens of the other Member States and provided for the removal of existing restrictions. The Court of Justice has had a vital role to play in this matter, because of the Reyners case,” it held that Article 52 was directly applicable. As a result, the Commission was able to withdraw all its proposals for directives dealing merely with the removal of restrictions and to deduce that all clauses delaying the liberalization of certain activities were invalid. A number of obstacles to the free movement of the self-employed nevertheless remain. These appear to arise from the following: 1. the search for an excessively close degree of harmonization in the mutual recognition of qualifications;‘h 2. the fact that Community rules on social security do not apply to the self-employed. This gap has, however, been bridged by the extension of Regulations Nos. 1408/71” and 574/72’8 to this category; 3. the excessive use by Member States of their power to make exceptions on the grounds of public policy, public security, and public health.
Freedom
to Provide
Services
The Treaty provisions relating to freedom to provide services are more residual in character than those dealing with the free movement of persons, goods and capital, and were brought into effect later. As in the case of freedom of establishment, the removal of restrictions on freedom to provide services has been the subject of a general programme.” Here, too, the Court has had an important role to play-mainly by ruling that the first paragraph of Article 59 of the Treaty and the third paragraph of Article 60, which forbid discrimination on the grounds of nationality or residence,20 were directly applicable from the end of the transitional period. But freedom to provide services is still hampered by the difficulties encountered when the directives provided for in Article 57 were adopted. National regulations on access to and the exercise of a profession differ widely, and closer harmonization of the right of establishment must be achieved. It should also be noted that purely internal measures justified by the general interest2’ which affect all those supplying a service on the territory of the Member State concerned, and the limits on the exercise of certain economic activities which arise from national legislation on the protection of intellectual property, are not regarded as restrictions on the freedom to provide services unless they are a means of arbitrary discrimination or a disguised restriction on economic relations between the Member States.z2
The
Free
Movement
of Capital
and
Payments
Article 67 of the Treaty establishing the European Economic Community provides that the Member States shall progressively abolish between themselves all restrictions and discriminations affecting free movement of capital to the extent necessary to ensure the proper functioning of the common market. In the implementation of this article, directives were adopted in 1960 and 1962” to abolish, exchange restrictions which, for certain types of transaction hinder the free movement of capital within the Community. These directives, it
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should be recalled, were regarded as steps forward in the gradual progress towards an integrated European capital market and this was also the assumption behind the Segre fields report,24 which set out what had to be done in the monetary, fiscal and administrative before free movement of capital could become a reality. This ambitious prospect of integration quickly foundered on the rock of disruptions on the international monetary scene. In 1968 the system based on the Bretton Woods agreements began to crumble and in 1971 it fell apart completely. We need look no further than the collapse of the international monetary system to explain the reverses and difficulties experienced by attempts to integrate the European capital markets. Of course, the search for solutions at this level was not abandoned: the ‘snake’ and the EMS testifv to the desire to create a zone of relative stability in a shifting world, but we must recognize that what has actually been achieved falls far short of what was envisaged in the directives of 1960 and 1962. Despite the principle that capital transfers arising from the sale of goods should be completely free, the situation today is that a number of the Member States have retained or even strengthened their controls or restrictions. Apart from disturbances on the monetary front, there are a number of reasons for this failure to make progress towards the freeing of capital movements-and often one reason is used in support of another. They include balance of payment difficulties, differences in interest and inflation rates, the need to protect national reserves and differing tax systems. For all these reasons the Member States have erected systems for monitoring or authorizing exchange transactions, and these are connected with the monitoring of transactions involving goods. The art market has certainly not been excluded from these measures-indeed, the issue of the protection of the national heritage and the occurrence of certain speculative dealings have made it a prime target for inspections. Besides long-term solutions involving the creation of an integrated capital market within a stable economic and monetary union, it would perhaps be useful to see whether there are any ways in which capital movements arising from genuine transactions on the art market could be facilitated. A first step might be to demonstrate that the amounts involved are insignificant by comparison with what would be achieved by a genuine opening up of the markets. A second would be to point to the growth in purely speculative transactions on the existing international markets which have emerged because of the amounts of money which can be mobilized on the Euro-markets and which avoid all controls.
Free
Movement
of Goods
Articles 30 and following of the Treaty, which relate to the free movement of goods, have been applied widely and this, as Mr J. Duquesne points out in his report, has also been of benefit to cultural property, as it is treated as goods for the purpose of this chapter. The wide-ranging application of the EEC Treaty to the free movement of goods has been most marked in the areas of industrial, commercial and intellectual property,25 national regulation barriers to trade?’ and the common of prices,26 technical organization of markets in agricultural products. 28There are some limits to rules on measures having equivalent effect, but these have been interpreted restrictively. In the Cassis de Dijon case,?” the Court held that obstacles to movement within the Community resulting from disparities concerning the marketing of a product must be accepted in so far as they are necessary to satisfy mandatory requirements, such as the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer. In this instance, it did not consider that the requirement for a minimum alcohol content in alcoholic drinks was of sufficiently general interest to override the free movement of goods. The Commission then I0 drawing conclusions from this ruling; it emphasized that published a Communication.
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and the Art Market
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exceptions to the principle of free movement of goods were acceptable only if the national rules served a purpose which was in the general interest and essential. Article 36, which is of particular interest to the art market because it permits the Member States to restrict free trade to protect national treasures possessing artistic value and intellectual property, has similarly been interpreted restrictive1y.j’
Some
Thoughts
It cannot be denied that the Communities have important achievements in the field of European integration to their credit. But there are still many areas where progress has ground to a halt; the European citizen is surprised and disappointed to find on his journey within the Community, barriers which he thought had been scrapped.“2 As we have seen, there are still a number of obstacles to be removed for the four freedoms to become a reality. Since works of art and artists do not enjoy any special exemption, what affects them affects all of us. Could we not respond to the persistence of these barriers to the movement of goods and persons within the Europe of the Ten by looking for their causes and trying to list them? A number of speakers on the art world have, quite rightly, emphasized the need for specific rules, a simplification of customs formalities, and the harmonization and reduction of the taxes which works of art attract. But the causes of the problem are deeper than this, and delay in instituting a common market in art may well provoke some general thoughts on all the fields covered by the Treaty of Rome. A question which must be asked is whether the bases and the objectives of the Treaty still measure up to the desires of the peoples of Europe. If we were to rewrite the Treaty in 1982, what would it contain? Our feet would perhaps be more firmly on the ground if, in place of a European Community with supra-national authority, we established a European territory in which regional and decentralized bodies would play a larger role in the decision-making process. At this point it is worth recalling briefly the aims and objectives ofthe founding fathers. To summarize very briefly, 33 Monet’s basic ideas were: concepts of national superiority and the desire to dominate had led Europe and the world to war. These had to be replaced by a sense of common interest which could be achieved by creating the necessary preconditions for dialogue between the peoples; existing common interests had to be identified so that people could be led to view their problems from a common standpoint; the European states had to give up part of their sovereignty to joint institutions, which alone were capable of identifying the common interest. This principle was fundamental to the construction of Europe. The main aim was the creation of a large area within which bonds would be so strong that the interest of each country would become the interest of the whole Community. The foremost achievement of such a community would be the establishment and maintenance of peace. Robert Schuman regarded the fragmentation of Europe as an absurd anachronism which had to be ended by replacing political nationalism, autarchic protectionism and cultural isolationism by ‘solidarity and the conviction that the real interest of everybody lay in the recognition and acceptance of mutual interdependence.j4 In May 1950, Jean Monnet and Robert Schuman regarded Europe as an audacious undertaking which would break with the past and avoid the kind of imbalance that would be fatal to the West.35 They both expected Europe to be built by small concrete achievements which would rapidly lead to growing solidarity between the Member States,36 so that the only criterion for judging common problems would be the general interest. Yet the period since
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Market
and the Art Market
1965, well before the economic crisis, has been marked by a resurgence of nationalism and a refusal by some of anything smacking of supranationalism and Community spirit”’ a trend given fresh impetus by the economic problems of the seventies. Despite the real achievements made in the field covered by the Treaties, solidarity has failed to materialize-on the contrary the Member States have become more introspective and have encouraged the fragmentation of markets. The threats to the West have not diminished during these three decades, but they are now perceived differently. When the European card is played, the aim is not to buttress the European edifice but to achieve specific aims relating to purely national interests.“8 Supranationality, the centre-piece of the Community for its founders, is daily under assault from the Member States who bolster the Council’s powers, particularly by strengthening the European Council and refusing to take decisions unanimously, while simultaneously pruning the powers enjoyed by the Commission. If we go on to note some cornerstones of the European construction, for example the international monetary system and GATT, are now being questioned, serious question-marks over the future of Europe arise. Should we continue on the path already begun while attempting to give it a new basis, or should we accept texts and aims which no longer have any meaning? Or should we admit that Europe is no more than a pipe-dream? These are some of the basic issues around which you might like to centre your discussions. References
and
Notes
1. Raymonde Moulin, Le MarchP de la peinture en France (Paris: Editions de Minuit, 1967, 5th ed., 1976). 2. Sophy Burnam, The Arr Cromd (New York: David Xlackay, 1973). 3. European Parliament, Resolution of 13 May 1974 on measures to protect the European cultural heritage, OJ C 62,305. 1974; Resolution of 18 January 1979 containing Parliament’s Opinion on the Communication from the Commission to the Council on Community action in the cultural sector, OJ C 39, 12.2.1979. 4. Report from the Commission ofthe European Committees to the Council pursuant to the Mandate of 30 May 1980, Bulletin of the European Communities, Supplement l/18. 5. Strengthening ofthe Internal Market-Communication from the Commission to the Council, COM(S1) 572 of 1-I October 1981. 1982 Programme for the Attainment of the Custom Union-Communication from the Commission to the Council, COM(S2) 50. 6. Proposal of July 1981 for a Council Regulation on temporary importation. 7. Articles 3, 23 and 24 of the VAT code; Royal Degree No. 7 of 27 December 1977 on the export of goods. 8. Communication from the Commission to the Council of 30 June 1981 on the improvement of the internal market, Bulletin of the European Communities, 6-1981, p. 25; Report from the Commission of the European Communities to the Council pursuant to the Mandate of 30 May 1980, Bulletm qf‘the Europeun Communities, Supplement l/81. 9. Le Monde, 17 February 1982; Agenre Europe, 17 February 1982. 10. Jean Monnet, Preface to J. Durosne, f.‘idPe d’Europe duns I’His/orrr (I~enoel, 1965), p. 11. 11. Victor Hugo, Speech at the opening of the Peace Congress, Paris, 11 August IStY. 12. Regulation No. 38/64, OJ L 62, 17.4.1964, p. 965. 13. Regulation No. 1612/68, OJ 1~257, 19.10.1968. I-l. Programme generale pour la suppression des restrictions dans la liberte d’etablissement, OJ 2, 15.1.1962. 15. Case (1974) ECR 631. 16. For example, see the recent Written Question No. 1279/X1 on the mutual recognition of hairdressing diplomas, OJ C 38, 15.2.1982, p. 15. 17. Basic Regulation No. 1408/71 was extended to cover self-employed persons and members of their families by Council Regulation No. 1390/81 of 12 May 1981, OJ I, l-l.1, 29.5.1981. IX. Regulation No. 574/72 was extended to self-employed persons and members of their families by Council Regulation No. 3795181, OJ L 378, 31.12.1981. 10. Programme general relatif a la suppression des restrictions a la librc prestation dea services, OJ 2, IS. 1.1962. 20. Case 152173, SU~RIU(1974) ECR; Case 33/74, Z‘N~Bmshergen (1974) ECR 1209; Case 13/76, Dunu (1976) ECR 1333; Case 71/76 Thiefiy (1977) ECR 765; Joined Cases 110 and 11 l/78, UJ~Z K’esemuel(l979) ECR 35. 2 1. Case 52/79, Debauce (1980)ECR 833; Case 279/80 @‘ebb, not yet reported; Joined Case 62 and 63/81 Seco, not yet reported.
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22. Case 62/79, CoditeI(l980) ECR 881. 23. First Directive for the implementation of Article 67 of the Treaty, OJ 43, 22.7.1960; Second Council Directive of 18 December 1962 adding to and amending the First Directive for the implementation of Article 67 of the Treaty, OJ 9, 22.1.1963. 24. The Development of a European Capital Market, Report of a Group ofexperts appointed bJ1the EEC Commission (Brussels, November 1966). 25. Especially, Case 78/70 Deutsche Grammophon (1971) ECR 487; Joined cases 55 and 57/80 Gema (1981) ECR 147; Case 187/80 Merck, not yet reported. 26. See on this subject W. Waelbroeck, La compatibilith de la procedure de declaration pyhalable de hausses de prir avec les ygles du tyaite’ de Rome (1981) RCJB 12. 27. Case 120/78 Cassis de Dijon (1979) ECR 649. 28. Case 83/78 Pigs Marketing Board (1978) ECR 2347. 29. Case 120/78 Cassis de Dijon (1979) ECR 649. 30. Communication from the Commission, 0; C256, 3.10.1980, p. 2. 31. See in particular, M. Waelbroeck, Droit des marques et regles du trait& de Rome: aux termes d’une evolution (1977) RCJB 212; L. Defalque, ‘La Cour de justice des Communautes europiennes et les teledistributeurs’ Revue de dyoit intellectual, L’lngdnieuy-Conseil(1981), p. 1. 32. See for example, Written Question No. 889/81 by Mr Weisch to the Commission (OJ C 315, 3 December 1981, p. 2) concerning the variety of difficulties encountered by a British lecturer wishing to spend a year in France. 33. P. Fontaine, Le Comith d’action pour Ies Etats-Unis d’Euyope deJean Monnet (Lausanne, 1974), p. 13. 34. R. Rochefort, Robert Schuman, Lecerf, 1968, pp. 340 and 344. 35. Agence Europe, editorial of IO September 1981. 36. Schuman Declaration of 9 May 1950. 37. H. Brugmans, L’idde euyophenne, 1918-1965, p. 248. 38. Agence Europe, editorial of 10 September 1980.
II. The Concept of the Work of Art In the light of twentieth century artistic developments the definition of the Work of Art is a problem of immediate importance since, in effect, any definition adopted establishes the limits of application of fiscal and administrative measures, as well as defining what potentially constitutes the artistic patrimony.
The Original
Work of Art: A Lawyer’s
View
JEAN CHATELAIN
A basic objection has to be disposed of before we can start to deal with this subject. Although obviously fallacious, this objection still commands support in certain quarters. It is this: Can art be subject to the law at all? Is there not a fundamental antithesis between the two? The argument is supported by romantic visions of the artist as subject to neither man nor law, as a solitary wild boar or as a lion roaring in the moonlight. If it were accepted, this study would be damned from the start. What this argument overlooks, however, is that art concerns a
The Common Market and the Art Market
I. Europe, Culture and the Art Market Introduction MICHEL VANDEN ABEELE What’s it all about? The idea of placing the cultural aspect of the European experience side by side with materialism in the form of trade and commerce in works of art may strike some people as incongruous, shocking or frankly provocative. Relations between art and money appear to be afflicted by a Pharaonic curse, or, maybe, a covert snobbishness. As Raymonde Moulin has clearly shown in her doctoral thesis’ the relation between artistic activity-something elitist, unhealthy or gratuitous-and its involvement in the world of commerce and economics is a strange one. This is reflected in the myth of the disinterested artist, destined to die in gloomy penury while his widow and heirs fill their pockets in the company of collectors and dealers. And, of course, both specialist and the non-specialist press will be quick to report the fabulous sums which certain pieces realize at auction. The international market continues to develop despite, or possibly because of, the world economic crisis-the turnover of the auctioneers and certain well-known London houses makes bankers rub their hands with delight. To own certain objects and be able to buy and sell them is a clear sign of having joined the establishment. Such developments, sedulously fostered by the media, mean that the social and economic activities involved in conserving, producing and distributing cultural property and activities? take place within a highly artificial context. There can be no doubt that art is an economic activity. 1 do not want to become involved in a discussion on the purpose of art, but it cannot be denied that the artist becomes an actor on the economic scene as soon as he produces something, whether or not with a commercial intention. If this is taken to its logical conclusion, we could also argue that the amateur artist, the weekend painter, is also an economic actor, although principally as a consumer. Here is ample justification for artistic activities and the art market to be brought within the purview of the Common Market, the European Economic Community established by Treaty in 1958. At the same time, however, the special nature of artistic activity, the fact that it is a cultural phenomenon, means that it cannot be defined by treaties, be it the Treaty of Rome or the Council of Europe’s convention on cultural co-operation. The concept of European culture-on which thousands of speeches have been made-cannot be formally circumscribed. Its principal ingredients are diversity and independence-administrative and institutional rules are anathema to it. At a political level, the tinge of bitterness felt by those who hoped that Europe had something more than mere material progress to offer has often been noted. Positions and initiatives have been taken at the highest level in an attempt to give the European venture a cultural dimension. For example, the communique issued after the first Conference of Heads of State or of Government of the enlarged Community held in Paris on 19 and 20 October 1972 stated that: ‘In the European spirit special attention will be paid to non-material values and wealth . . . and the final communique from the Copenhagen so that progress shall serve mankind’, Summit on 14 and 15 December 1973 added that The diversity of cultures within the framework of a common European civilization, the attachment to common values and principles, the increasing convergence of attitudes to
The Common Market
and the Art Market
305
life, the
awareness of having specific interests in common and the determination to take part in the construction of a united Europe, all give the European Identity its originality and its own dynamism. For its part, Parliament passed resolutions in 1974 and 19793 vigorously supporting the Commission’s action on cultural matters. More recently, the moves to give the Community a new impetus have made explicit reference to its cultural dimension. The French Government’s memorandum on revitalization of the Community includes the following: ‘There is no economic power without political and cultural purpose.’ and The French Government considers that European integration will only progress if culture, which is one of the basic components of the identity of the European peoples, becomes a factor in the Member States’ endeavour; in this connection it welcomes the Italian Government’s proposal to convene an informal conference of Ministers for Culture in the Ten in the near future. The Draft European explicit:
Act presented by Mr Genscher on 4 November
1981 was still more
Convinced that the unification of Europe in freedom and respect for its diversity will enable it to make progress and develop its culture and thus contribute to the maintenance of equilibrium in the world and to the preservation of peace, . . . close cultural cooperation between the Member States in order to promote an awareness of common cultural origins as a facet of the European identity, while at the same time drawing on the existing variety of individual traditions and intensifying the mutual exchange of experience, particularly between young people, . . . In addition, a Council of Ministers responsible for cultural cooperation shall be established. . . . The Council of Ministers responsible for cultural cooperation shall hold regular exchanges of views on close co-operation in order to harmonize their positions on cultural matters as far as possible. Although these texts are couched in general terms, they place cultural action already undertaken or contemplated in a specific context and also amplify or clarify the formal agreements made in the broader context of the Council of Europe, to which twenty-one countries belong. This body has for some time endeavoured to promote co-operation on culture and education. In 19.59, it took over responsibility for cultural matters from the Western European Union and launched its practical activities by establishing a Cultural Fund, setting up an autonomous Council for Cultural Co-operation, studying the goals to be pursued in the cultural field and organizing events of interest to the whole of Europe. How is it then, it may be asked, that all these resolutions, commitments and hundreds of speeches have yielded so little real progress? What are all the hurdles we meet when, abandoning the realm of far-sighted and wide-ranging ideas, we get down to the practical task of creating a genuine common market for artists and works of art in Europe? How can the gap between words and deeds be explained? To be precise, the lack of a real common market for artists and works of art is symptomatic of the deep gulf which separates the inspiring principles of the Community from its practice. Therein lies the truth. The reports and debates at the study-day on ‘The Common Market and Art Market’ organized by the Institute of European Studies represent a special case, but they are the tip of an iceberg constituted by the general problem of creating an integrated economic area. New problems
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spring up on all sides to impede the practical establishment of the Common Market. Commission noted in a recent document designed to promote European unity,
As the
The customs union was one of the Community’s first real achievements. If it is to be complete, the variety of remaining barriers which are still preventing the completion of the single market must as a priority be eliminated. . It is quite legitimate for public authorities-and Community authorities whenever their powers permit-to maintain their contribution to the creation of a better economic environment. . . .) The tendency to defy the Treaties and renege on promises by re-erecting barriers around national markets is all too clear. This was one reason why the Commission launched a general programme for the strengthening of the internal market and made it one of its priorities for 1982.” Warnings and measures to safeguard the Community’s achievements are not enough: we must investigate the real reasons why national barriers are reappearing. A quick glance reveals a number of political, economic and social reasons: the economic crisis, the emergence of pressure groups, a desire for reassurance in an unstable world, vested interests and the terribly conservative-force of habit. To all these we may add the well-known phenomena of bureaucracy. The purpose of this study-day is to attempt to shed some light on the reasons for the difficulties experienced by the art market. The aim is to show that these obstacles are the same as those which exist in other areas, and the hope is that we shall find solutions which can be applied, mutatis mutandis, to more complex subjects or ones where the public interest is less obvious or less surrounded by mystique. After ten years of talk, we are still nowhere near attaining a common market in works of art. Community law contains no specific provisions on the movement of artists and works of art,h and neither do most national laws-in Belgium, for example, the ordinary law applies.7 The remaining barriers to the free movement of works of art are interlinked with barriers to the free movement of persons, services, capital and goods in general. The work of art stands at the hub of four freedoms, and this study-day on the common market in art may provoke more general thoughts on European integration. This would be apposite at a moment when the Commission is stressing the need to preserve and strengthen the Community’s internal market and remove the remaining barriers to a single market;x its President is drawing attention to internal threats to the Community and advocating a quantum leap to a higher level of integration and development.” The countries of Europe have for centuries been united by a common culture and civilization:“’ Victor Hugo dreamed of a United States of Europe which would be an artistic power capable of rivalling the United States of America.” At the moment, however, we must admit that things have come to a standstill. What we have to discover is whether the barriers which remain are serious or trivial. For the sake of clarity, it would now be as well to survey rapidly, what has been achieved in the fields of freedom of movement of persons, services, goods and capital.
Free
Movement
of Persons
As is well known, the free movement of persons stems from a number of basic principles: the abolition of discrimination against nationals of the other Member States, freedom of movement and residence within the Member States and the right to exercise any professional activity apart from employment in public service in a Member State other than that of origin. The only exceptions permitted by the Treaty of Rome are those based on public policy, public security or public health. The Commission’s greatest successes in this field concern the two million employed persons in the Community to whom Regulation No. 38/64,” and
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Regulation No 1612/68” which succeeded it, gave the right to work in another Member State. Community legislation on social security has also made an important contribution to the free movement of such workers. Similar freedom for the self-employed such as artists, was, and still remains, more difficult to achieve, mainly because of their wide variety of circumstances and needs. The General Programme of 18 December 1961” introduced the principle of equal treatment for nationals and citizens of the other Member States and provided for the removal of existing restrictions. The Court of Justice has had a vital role to play in this matter, because of the Reyners case,” it held that Article 52 was directly applicable. As a result, the Commission was able to withdraw all its proposals for directives dealing merely with the removal of restrictions and to deduce that all clauses delaying the liberalization of certain activities were invalid. A number of obstacles to the free movement of the self-employed nevertheless remain. These appear to arise from the following: 1. the search for an excessively close degree of harmonization in the mutual recognition of qualifications;‘h 2. the fact that Community rules on social security do not apply to the self-employed. This gap has, however, been bridged by the extension of Regulations Nos. 1408/71” and 574/72’8 to this category; 3. the excessive use by Member States of their power to make exceptions on the grounds of public policy, public security, and public health.
Freedom
to Provide
Services
The Treaty provisions relating to freedom to provide services are more residual in character than those dealing with the free movement of persons, goods and capital, and were brought into effect later. As in the case of freedom of establishment, the removal of restrictions on freedom to provide services has been the subject of a general programme.” Here, too, the Court has had an important role to play-mainly by ruling that the first paragraph of Article 59 of the Treaty and the third paragraph of Article 60, which forbid discrimination on the grounds of nationality or residence,20 were directly applicable from the end of the transitional period. But freedom to provide services is still hampered by the difficulties encountered when the directives provided for in Article 57 were adopted. National regulations on access to and the exercise of a profession differ widely, and closer harmonization of the right of establishment must be achieved. It should also be noted that purely internal measures justified by the general interest2’ which affect all those supplying a service on the territory of the Member State concerned, and the limits on the exercise of certain economic activities which arise from national legislation on the protection of intellectual property, are not regarded as restrictions on the freedom to provide services unless they are a means of arbitrary discrimination or a disguised restriction on economic relations between the Member States.z2
The
Free
Movement
of Capital
and
Payments
Article 67 of the Treaty establishing the European Economic Community provides that the Member States shall progressively abolish between themselves all restrictions and discriminations affecting free movement of capital to the extent necessary to ensure the proper functioning of the common market. In the implementation of this article, directives were adopted in 1960 and 1962” to abolish, exchange restrictions which, for certain types of transaction hinder the free movement of capital within the Community. These directives, it
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should be recalled, were regarded as steps forward in the gradual progress towards an integrated European capital market and this was also the assumption behind the Segre fields report,24 which set out what had to be done in the monetary, fiscal and administrative before free movement of capital could become a reality. This ambitious prospect of integration quickly foundered on the rock of disruptions on the international monetary scene. In 1968 the system based on the Bretton Woods agreements began to crumble and in 1971 it fell apart completely. We need look no further than the collapse of the international monetary system to explain the reverses and difficulties experienced by attempts to integrate the European capital markets. Of course, the search for solutions at this level was not abandoned: the ‘snake’ and the EMS testifv to the desire to create a zone of relative stability in a shifting world, but we must recognize that what has actually been achieved falls far short of what was envisaged in the directives of 1960 and 1962. Despite the principle that capital transfers arising from the sale of goods should be completely free, the situation today is that a number of the Member States have retained or even strengthened their controls or restrictions. Apart from disturbances on the monetary front, there are a number of reasons for this failure to make progress towards the freeing of capital movements-and often one reason is used in support of another. They include balance of payment difficulties, differences in interest and inflation rates, the need to protect national reserves and differing tax systems. For all these reasons the Member States have erected systems for monitoring or authorizing exchange transactions, and these are connected with the monitoring of transactions involving goods. The art market has certainly not been excluded from these measures-indeed, the issue of the protection of the national heritage and the occurrence of certain speculative dealings have made it a prime target for inspections. Besides long-term solutions involving the creation of an integrated capital market within a stable economic and monetary union, it would perhaps be useful to see whether there are any ways in which capital movements arising from genuine transactions on the art market could be facilitated. A first step might be to demonstrate that the amounts involved are insignificant by comparison with what would be achieved by a genuine opening up of the markets. A second would be to point to the growth in purely speculative transactions on the existing international markets which have emerged because of the amounts of money which can be mobilized on the Euro-markets and which avoid all controls.
Free
Movement
of Goods
Articles 30 and following of the Treaty, which relate to the free movement of goods, have been applied widely and this, as Mr J. Duquesne points out in his report, has also been of benefit to cultural property, as it is treated as goods for the purpose of this chapter. The wide-ranging application of the EEC Treaty to the free movement of goods has been most marked in the areas of industrial, commercial and intellectual property,25 national regulation barriers to trade?’ and the common of prices,26 technical organization of markets in agricultural products. 28There are some limits to rules on measures having equivalent effect, but these have been interpreted restrictively. In the Cassis de Dijon case,?” the Court held that obstacles to movement within the Community resulting from disparities concerning the marketing of a product must be accepted in so far as they are necessary to satisfy mandatory requirements, such as the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer. In this instance, it did not consider that the requirement for a minimum alcohol content in alcoholic drinks was of sufficiently general interest to override the free movement of goods. The Commission then I0 drawing conclusions from this ruling; it emphasized that published a Communication.
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exceptions to the principle of free movement of goods were acceptable only if the national rules served a purpose which was in the general interest and essential. Article 36, which is of particular interest to the art market because it permits the Member States to restrict free trade to protect national treasures possessing artistic value and intellectual property, has similarly been interpreted restrictive1y.j’
Some
Thoughts
It cannot be denied that the Communities have important achievements in the field of European integration to their credit. But there are still many areas where progress has ground to a halt; the European citizen is surprised and disappointed to find on his journey within the Community, barriers which he thought had been scrapped.“2 As we have seen, there are still a number of obstacles to be removed for the four freedoms to become a reality. Since works of art and artists do not enjoy any special exemption, what affects them affects all of us. Could we not respond to the persistence of these barriers to the movement of goods and persons within the Europe of the Ten by looking for their causes and trying to list them? A number of speakers on the art world have, quite rightly, emphasized the need for specific rules, a simplification of customs formalities, and the harmonization and reduction of the taxes which works of art attract. But the causes of the problem are deeper than this, and delay in instituting a common market in art may well provoke some general thoughts on all the fields covered by the Treaty of Rome. A question which must be asked is whether the bases and the objectives of the Treaty still measure up to the desires of the peoples of Europe. If we were to rewrite the Treaty in 1982, what would it contain? Our feet would perhaps be more firmly on the ground if, in place of a European Community with supra-national authority, we established a European territory in which regional and decentralized bodies would play a larger role in the decision-making process. At this point it is worth recalling briefly the aims and objectives ofthe founding fathers. To summarize very briefly, 33 Monet’s basic ideas were: concepts of national superiority and the desire to dominate had led Europe and the world to war. These had to be replaced by a sense of common interest which could be achieved by creating the necessary preconditions for dialogue between the peoples; existing common interests had to be identified so that people could be led to view their problems from a common standpoint; the European states had to give up part of their sovereignty to joint institutions, which alone were capable of identifying the common interest. This principle was fundamental to the construction of Europe. The main aim was the creation of a large area within which bonds would be so strong that the interest of each country would become the interest of the whole Community. The foremost achievement of such a community would be the establishment and maintenance of peace. Robert Schuman regarded the fragmentation of Europe as an absurd anachronism which had to be ended by replacing political nationalism, autarchic protectionism and cultural isolationism by ‘solidarity and the conviction that the real interest of everybody lay in the recognition and acceptance of mutual interdependence.j4 In May 1950, Jean Monnet and Robert Schuman regarded Europe as an audacious undertaking which would break with the past and avoid the kind of imbalance that would be fatal to the West.35 They both expected Europe to be built by small concrete achievements which would rapidly lead to growing solidarity between the Member States,36 so that the only criterion for judging common problems would be the general interest. Yet the period since
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1965, well before the economic crisis, has been marked by a resurgence of nationalism and a refusal by some of anything smacking of supranationalism and Community spirit”’ a trend given fresh impetus by the economic problems of the seventies. Despite the real achievements made in the field covered by the Treaties, solidarity has failed to materialize-on the contrary the Member States have become more introspective and have encouraged the fragmentation of markets. The threats to the West have not diminished during these three decades, but they are now perceived differently. When the European card is played, the aim is not to buttress the European edifice but to achieve specific aims relating to purely national interests.“8 Supranationality, the centre-piece of the Community for its founders, is daily under assault from the Member States who bolster the Council’s powers, particularly by strengthening the European Council and refusing to take decisions unanimously, while simultaneously pruning the powers enjoyed by the Commission. If we go on to note some cornerstones of the European construction, for example the international monetary system and GATT, are now being questioned, serious question-marks over the future of Europe arise. Should we continue on the path already begun while attempting to give it a new basis, or should we accept texts and aims which no longer have any meaning? Or should we admit that Europe is no more than a pipe-dream? These are some of the basic issues around which you might like to centre your discussions. References
and
Notes
1. Raymonde Moulin, Le MarchP de la peinture en France (Paris: Editions de Minuit, 1967, 5th ed., 1976). 2. Sophy Burnam, The Arr Cromd (New York: David Xlackay, 1973). 3. European Parliament, Resolution of 13 May 1974 on measures to protect the European cultural heritage, OJ C 62,305. 1974; Resolution of 18 January 1979 containing Parliament’s Opinion on the Communication from the Commission to the Council on Community action in the cultural sector, OJ C 39, 12.2.1979. 4. Report from the Commission ofthe European Committees to the Council pursuant to the Mandate of 30 May 1980, Bulletin of the European Communities, Supplement l/18. 5. Strengthening ofthe Internal Market-Communication from the Commission to the Council, COM(S1) 572 of 1-I October 1981. 1982 Programme for the Attainment of the Custom Union-Communication from the Commission to the Council, COM(S2) 50. 6. Proposal of July 1981 for a Council Regulation on temporary importation. 7. Articles 3, 23 and 24 of the VAT code; Royal Degree No. 7 of 27 December 1977 on the export of goods. 8. Communication from the Commission to the Council of 30 June 1981 on the improvement of the internal market, Bulletin of the European Communities, 6-1981, p. 25; Report from the Commission of the European Communities to the Council pursuant to the Mandate of 30 May 1980, Bulletm qf‘the Europeun Communities, Supplement l/81. 9. Le Monde, 17 February 1982; Agenre Europe, 17 February 1982. 10. Jean Monnet, Preface to J. Durosne, f.‘idPe d’Europe duns I’His/orrr (I~enoel, 1965), p. 11. 11. Victor Hugo, Speech at the opening of the Peace Congress, Paris, 11 August IStY. 12. Regulation No. 38/64, OJ L 62, 17.4.1964, p. 965. 13. Regulation No. 1612/68, OJ 1~257, 19.10.1968. I-l. Programme generale pour la suppression des restrictions dans la liberte d’etablissement, OJ 2, 15.1.1962. 15. Case (1974) ECR 631. 16. For example, see the recent Written Question No. 1279/X1 on the mutual recognition of hairdressing diplomas, OJ C 38, 15.2.1982, p. 15. 17. Basic Regulation No. 1408/71 was extended to cover self-employed persons and members of their families by Council Regulation No. 1390/81 of 12 May 1981, OJ I, l-l.1, 29.5.1981. IX. Regulation No. 574/72 was extended to self-employed persons and members of their families by Council Regulation No. 3795181, OJ L 378, 31.12.1981. 10. Programme general relatif a la suppression des restrictions a la librc prestation dea services, OJ 2, IS. 1.1962. 20. Case 152173, SU~RIU(1974) ECR; Case 33/74, Z‘N~Bmshergen (1974) ECR 1209; Case 13/76, Dunu (1976) ECR 1333; Case 71/76 Thiefiy (1977) ECR 765; Joined Cases 110 and 11 l/78, UJ~Z K’esemuel(l979) ECR 35. 2 1. Case 52/79, Debauce (1980)ECR 833; Case 279/80 @‘ebb, not yet reported; Joined Case 62 and 63/81 Seco, not yet reported.
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22. Case 62/79, CoditeI(l980) ECR 881. 23. First Directive for the implementation of Article 67 of the Treaty, OJ 43, 22.7.1960; Second Council Directive of 18 December 1962 adding to and amending the First Directive for the implementation of Article 67 of the Treaty, OJ 9, 22.1.1963. 24. The Development of a European Capital Market, Report of a Group ofexperts appointed bJ1the EEC Commission (Brussels, November 1966). 25. Especially, Case 78/70 Deutsche Grammophon (1971) ECR 487; Joined cases 55 and 57/80 Gema (1981) ECR 147; Case 187/80 Merck, not yet reported. 26. See on this subject W. Waelbroeck, La compatibilith de la procedure de declaration pyhalable de hausses de prir avec les ygles du tyaite’ de Rome (1981) RCJB 12. 27. Case 120/78 Cassis de Dijon (1979) ECR 649. 28. Case 83/78 Pigs Marketing Board (1978) ECR 2347. 29. Case 120/78 Cassis de Dijon (1979) ECR 649. 30. Communication from the Commission, 0; C256, 3.10.1980, p. 2. 31. See in particular, M. Waelbroeck, Droit des marques et regles du trait& de Rome: aux termes d’une evolution (1977) RCJB 212; L. Defalque, ‘La Cour de justice des Communautes europiennes et les teledistributeurs’ Revue de dyoit intellectual, L’lngdnieuy-Conseil(1981), p. 1. 32. See for example, Written Question No. 889/81 by Mr Weisch to the Commission (OJ C 315, 3 December 1981, p. 2) concerning the variety of difficulties encountered by a British lecturer wishing to spend a year in France. 33. P. Fontaine, Le Comith d’action pour Ies Etats-Unis d’Euyope deJean Monnet (Lausanne, 1974), p. 13. 34. R. Rochefort, Robert Schuman, Lecerf, 1968, pp. 340 and 344. 35. Agence Europe, editorial of IO September 1981. 36. Schuman Declaration of 9 May 1950. 37. H. Brugmans, L’idde euyophenne, 1918-1965, p. 248. 38. Agence Europe, editorial of 10 September 1980.
II. The Concept of the Work of Art In the light of twentieth century artistic developments the definition of the Work of Art is a problem of immediate importance since, in effect, any definition adopted establishes the limits of application of fiscal and administrative measures, as well as defining what potentially constitutes the artistic patrimony.
The Original
Work of Art: A Lawyer’s
View
JEAN CHATELAIN
A basic objection has to be disposed of before we can start to deal with this subject. Although obviously fallacious, this objection still commands support in certain quarters. It is this: Can art be subject to the law at all? Is there not a fundamental antithesis between the two? The argument is supported by romantic visions of the artist as subject to neither man nor law, as a solitary wild boar or as a lion roaring in the moonlight. If it were accepted, this study would be damned from the start. What this argument overlooks, however, is that art concerns a