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MUSEUM LOSS PREVENTION: APPLY RIGOROUS DUE DILIGENCE TO PROTECT ARTIFACTS FROM LEGAL CONFISCATIONS

December 20, 2016 4:13 PM | Rob Layne (Administrator)

by Ricardo A. St. Hilaire, Esq., CIPM

Museums routinely protect their collections from threats of loss posed by theft, fire, natural disaster, and infrastructure failure. But do they effectively shield their collections from legal confiscations? To prevent artifacts from being seized by law enforcement, lawyers, or the courts, cultural institutions must guard against acquiring stolen or smuggled artifacts. They can do this by applying rigorous due diligence when performing provenance investigations.

When a museum fails to acquire good title to an object because the object is stolen property, or when a museum finds itself in possession of illegally imported cultural contraband, then the illicit object may be seized either through a private lawsuit (called a replevin action); a civil forfeiture claim, usually brought by federal a prosecutor; a search warrant; or some other legal remedy that ultimately strips the artifact from the museum’s possession.

If the artifact is stolen, then the rightful owner—usually a country like Italy, Greece, or Turkey in the case of a looted antiquities—will regain the property because, under the law, the owner never loses title to it. That is the result even if a museum acquires the stolen property in good faith, because an innocent purchaser generally cannot claim legal title to stolen property when confronted by the true owner. What’s more, the true owner is not required to pay compensation to a museum that is forced to surrender the stolen property, which means that a museum could lose thousands or millions of dollars. In addition, a museum that acquires specified archaeological or ethnological material that smugglers illegally imported into the United States in violation of federal customs rules must relinquish it. Federal authorities usually seize and forfeit this contraband before returning it to the country of origin.

Many archaeological artifacts have been removed from museum display cases over the years because they were looted or smuggled. The Metropolitan Museum of Art; the Museum of Fine Arts, Boston; the Getty Museum; and the Princeton Museum together have surrendered hundreds of looted and smuggled antiquities to Italian authorities in several highly publicized cases. The Dallas Museum of Art too returned six objects from its permanent collection to Turkey, including a pair of shields purchased from a dealer under investigation by U.S. Customs for several years. The same dealer was able to sell objects to at least eight major American art museums because no one carefully checked the goods he offered for sale. Cultural property watchers also remember a winter’s day in 2008 when federal agents in California raided the Los Angeles County Museum of Art, the Bowers Museum, the Pacific Asia Museum, and the Mingei Museum, armed with search warrants to “seize in place” ancient objects. That police investigation led to the felony convictions in 2015 of a pair art dealers who ran an antiquities import and tax fraud scheme involving antiquities originating from Burma, Cambodia, China, and Thailand. 

Cases like these prompted some cultural institutions to make meaningful corrections. Boston’s Museum of Fine Arts set the gold standard in 2010 with its addition of a curator for provenance, a full-time professional who carefully checks the collecting histories of objects. Operational improvements, like this one, have proven beneficial in today’s world where law enforcement and the public are more keenly aware that recently surfaced and undocumented ancient objects likely are the fruits of destroyed temples, plundered tombs, and vandalized ceremonial centers, which are sold on an art market that has earned a reputation for its lack transparency. Law enforcement and legal watchdogs, moreover, are on elevated alert after the FBI warned last year that antiquities trafficking may supply financial support to terrorists in the Middle East. For cultural institutions still lacking solid protective measures that guard against collecting illicit artifacts, this means that they will continue to face acute risk, both legal and reputational, particularly in cases where collected objects come from countries that suffer from, or that have recently experienced, widespread or highly publicized heritage site looting (e.g., Afghanistan, Egypt, Greece, Iraq, Italy, Mali, Syria).

Typically what causes a museum to unknowingly acquire illicit artifacts is a lack of due diligence. Due diligence is the term used to describe the background investigation that cultural institutions should employ to discover an artifact’s origin and its collecting history, particularly the details of its excavation, ownership, possession, transportation, conservation, sale, and so forth. This inquiry may be referred to as a provenance check. It is a pre-acquisition investigation meant to uncover whether an object is authentic or fake, whether its export and import were compliant with applicable laws, and whether its title can transfer legally to the museum. Flawed due diligence may result in a museum acquiring an antiquity or other object that later could be removed by police, lawyers, or a court order.

To prevent losses to their collections—and the bad publicity that ultimately follows—museums first should understand their fiduciary duty of care, which is the legal obligation imposed on trustees of nonprofit cultural institutions to exercise reasonable care when managing assets. This duty requires artifact accessions to be done lawfully and in good faith. The duty of care is embraced, in some measure, by museum codes of ethics like those published by the American Alliance of Museums (AAM), the Association of Art Museum Directors (AAMD), and the International Council of Museums (ICOM), which outline specific due diligence standards.

The variety of standards, however, are neither uniform nor sufficiently rigorous in many cases. For example, ICOM’s Code of Ethics and AAMD’s Guideline on the Acquisition of Archaeological Materials and Ancient Art disagree with each other about whether due diligence should include a review of customs compliance in a country through which an artifact passed. An examination assessing whether customs rules in a transshipment country were followed is important because smuggled artifacts typically pass through intermediary countries so that smugglers can surreptitiously mask the export and import trails of loot. So while ICOM’s due diligence rule properly asks museums to “establish the full history of the item from discovery or production,” AAMD’s diminished rule limits a museum’s background check to “compliance with the export laws of the country of immediate past export to the U.S,” ignoring compliance with the laws of every country of export and import.

There is little agreement too about the standard of review that should be applied. For example, one major museum’s collections policy declares that there must be “clear and convincing evidence” to prove that an object, already in the museum’s collection, had been stolen, looted, or smuggled before the object will be removed (deaccessioned) from the collection. Yet this same scrupulous standard is watered-down when the museum exercises due diligence before it adds new archaeological objects to its collection.

The best due diligence, of course, is rigorous due diligence. It is the kind of diligence that directs museum personnel to ask pointed and comprehensive questions and to insist on sufficient and credible documentation from dealers, auction houses, and donors. It is the kind of diligence that demands answers about whether an artifact has been stolen, illegally exported, or smuggled before an object is acquired, and even afterwards. Rigorous due diligence easily satisfies the duty of care and best prevents the loss of objects from a museum’s collection.

As a practical matter, we should ask what rigorous due diligence is actually due? One answer comes from a recommendation presented by collectors in 2009 to the Ancientartifacts Yahoo! group. Titled A Code of Ethics for Collectors of Ancient Artifacts, it offers the following quoted suggestions:

·       “Ask the vendor for all relevant paperwork relating to provenance, export etc.”

That means asking for the bills of lading, invoices, customs entry forms, export permits, and all other paperwork that track the object’s movements.

·       “Take extra care if collecting particular classes of objects which have been subjected to wide-scale recent looting.”

For example, avoid acquiring artifacts that are listed on one of ICOM’s publications known as Red Lists, which identify at-risk cultural heritage originating from countries that suffer severely from cultural heritage looting and plunder. 

·       “Verify a vendor’s reputation independently before buying. Assure yourself that they are using due diligence in their trading practices, and do not support those who knowingly sell fakes as authentic or offer items of questionable provenance.”

Learn more about the dealers, auction houses, and donors offering artifacts by getting client references, scanning publicly available court records for criminal or civil claims against them, and reviewing corporate records (available on many secretary of state offices’ web sites) to verify legitimacy. 

·       “Do not dismember any item, or acquire a fragment which you believe to have been separated from a larger object except through natural means.”

For instance, beware of acquiring a single object that would have been paired with another object. You would be suspicious if a salt shaker were sold without its companion pepper shaker, so be suspicious if a single statue that is commonly found a part of a pair is offered for sale.

·       “Consider the implications of buying an item from an associated assemblage and the impact this could have on study.”

Be cautious when considering the purchase of one portion of an entire temple wall or a single cut-out from a complete ancient papyrus roll, for example. 

·       “Liaise, where possible, with the academic and broader communities about your artifacts.”

Have open conversations about the object and its collecting history in order to learn more perhaps about its provenance from experts.

·       An item not suggested by the ethics code, but which is absolutely important, is conducting a visual inspection of the object. Use a black light to spot unusual marks or cover-ups like nail polish, which can be used to remove an identifying registration number from an inventoried museum object. Examine edges to see if they are straight and smooth to help determine whether an object has been cut recently from its original archaeological source as when looters use diamond-tipped steel circular saws to cut decorative slabs from ancient tomb walls.

Effective loss prevention involves the application of this kind of rigorous due diligence. It helps cultural institutions acquire valid legal title to licit cultural objects and protects museum collections from legal seizures, all while instilling public confidence in museum collecting practices that aim to preserve humanity’s precious cultural heritage.

Ricard A. St. Hilaire, Esq, CIPM
st-hilaire@culturalheritagelawyer.com
877-603-8777 
www.culturalheritagelawyer.blogspot.com