Thursday, February 28, 2013

U.S.-Belize MoU Signed

Belize's Institute of Archaeology and the National Institute of Culture and History are reporting on their Facebook page the signing yesterday of a Memorandum of Understanding (MoU) between the United States and Belize, which enacts import protections on endangered cultural property entering the U.S.

Signing of MoU between Belize and the United States.  Source: NICH
Belize petitioned the U.S. for an MoU seeking import restrictions pursuant to the Cultural Property Implementation Act (CPIA) and Article 9 of the 1970 Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property.  The Cultural Property Advisory Committee (CPAC) met in November 2011 to listen to public public comments regarding the adoption of import measures.

As of 5:00 p.m. on February 28, 2013, no notice or announcement describing the signing ceremony had been published in the Federal Register, posted on the U.S. State Department's Bureau of Educational and Cultural Affairs web site, or announced by the U.S. embassy in Belize.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com

First Circuit Rules in Favor of MFA and Harvard in Rubin v. Iran


The First Circuit Court of Appeals on February 27, 2013 decided in favor of the Museum of Fine Arts, Boston (MFA) and Harvard’s museums in the case of Rubin v. Iran.

The case involves victims of a 1997 Iranian-backed terrorist bombing who seek to satisfy a multi-million dollar default court judgment awarded to them in 2003. Since 2005 the Rubin plaintiffs have argued that approximately 2000 reliefs, sculptures, and other archaeological objects located at the MFA and Harvard are the property of Iran that can be seized.  The cultural institutions have been contesting that claim, and yesterday the First Circuit agreed.

The appeals court decision extended its sympathies to the the plaintiffs, saying “we are mindful of the incident that gave rise to the judgment here and the difficulty the plaintiffs are having collecting on that judgment ….”  But the justices upheld “the general rule … that foreign sovereign property in the United States is immune from attachment and execution” because of the Foreign Sovereign Immunity Act (FSIA). 28 U.S.C. § 1609.

The appeals court acknowledged that the Terrorism Risk Insurance Act of 2002 (TRIA) “carves out a narrow exception to that rule, applicable only to ‘blocked assets,’” but wrote that “the plaintiffs have failed to demonstrate that any of the antiquities in the Museums' possession fall within that exception.”
Photo credit: Persepolis by Mira Pavlakovic
The MFA and Harvard argued in the lower federal district court that Iran does not own the cultural objects. Even if they were owned by Iran, the MFA and Harvard maintained that the FSIA makes the objects immune from attachment.

The Rubin plaintiffs countered that “(1) the Museums did not have standing to assert sovereign immunity on behalf of Iran; (2) even if they did, the ‘commercial use’ exception to immunity under the FSIA would apply …; and (3) in any event, the plaintiffs could reach the antiquities under … the Terrorism Risk Insurance Act of 2002 (TRIA), …  which permits the attachment of certain ‘blocked assets of [a] terrorist party.’” In other words, the plaintiffs argued (1) that only Iran itself, not a third party, could claim in court that the archaeological objects at the MFA and Harvard were immune from attachment; (2) that the FSIA made an exception to the rule that foreign property in the U.S. is immune from attachment when that property is used commercially; and (3) that TRIA made an exception to the FSIA rule because “blocked assets” owned by Iran could be seized.

[Sidebar: “Blocked assets” mean property that has been seized or frozen by the U.S. government under the Trading With the Enemy Act or under the International Emergency Economic Powers Act. TRIA allows seizure of blocked assets to satisfy a court judgment “in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism, or for which a terrorist party is not immune under [the FSIA] ….” Of special note is that Iranian “blocked assets” are those under the Iranian Assets Control Regulations (the U.S. Treasury’s Office of Foreign Assets Controls (OFAC) sanctions against Iran) that are uncontested assets, meaning that there is no dispute about whether Iran holds title.]

The federal district court ruled that FSIA's “commercial use” exception did not apply to the case, but that TRIA would apply if the Rubin plaintiffs proved that Iran owned the antiquities in the possession of the MFA and Harvard.

The lower court then transferred three issues to the appeals court for review: the issue of standing, the applicability of TRIA, and the FSIA’s “commercial use” exception.  But the First Circuit appeals court sent the case back to the district court, explaining that it would hear the matter only after the district court decided who owned the cultural objects.  Once the district court in Boston found that the Rubin plaintiffs failed to show that Iran owned the property, the court of appeals accepted the case.

The litigants then submitted arguments to the First Circuit, summarized by Wednesday’s appeals court’s decision:

“The plaintiffs’ main argument on appeal is that TRIA preempts state property law, and, when read in conjunction with certain Treasury Department regulations, gives the plaintiffs (in their words) the right to levy against ‘any interest of Iran, even if that interest is less than a full ownership interest.’ They further claim that Iran has an interest in the antiquities under Iranian law that is sufficient to make them attachable under TRIA.

“The Museums, for their part, counter that TRIA does not displace the traditional rule that a judgment creditor may execute only against assets that a judgment debtor owns, and that the district court was correct in concluding that Iranian law does not vest title to the antiquities in Iran. However, the Museums also challenge the district court's finding that the antiquities qualify as ‘blocked assets’ within the meaning of TRIA—a prerequisite for that statute to apply. See TRIA § 201(a). Finally, the Museums urge us to find that, even if Iran owns the antiquities and they are theoretically attachable under TRIA, the plaintiffs' claim is barred under Massachusetts law by the three-year statute of limitations and the Museums' adverse possession of the objects.”

[Sidebar: The MFA and Harvard asserted that they could legally claim title to the cultural objects—if Iran did, in fact, own them—by claiming adverse possession. Adverse possession is the process of dispossessing another of their property legally, and without compensation, through hostile, open, notorious, exclusive, and continuous possession.]

“Also before us is the position of the United States Department of the Treasury's Office of Foreign Assets Control (OFAC), which is responsible for administering and enforcing economic and trade sanctions, including promulgating the regulations at issue here. The United States has filed an amicus brief articulating OFAC's views regarding two aspects of this case. First, OFAC urges us to find that TRIA authorizes the attachment only of those assets that are owned by the relevant terrorist party. Second, providing its own interpretation of the Treasury Department regulations, OFAC argues that the antiquities are not ‘contested’ within the meaning of those regulations, which, if correct, would make TRIA inapplicable here.”

Notwithstanding the complex legal issues briefed by the parties and, at times, the peculiar oral argument made before the three justice panel, the appeals court simply held:

“Because we agree with OFAC that the antiquities are not ‘contested,’ and thus conclude that they cannot qualify as ‘blocked assets’ under TRIA, we need not reach the broader questions of whether TRIA preempts state law, what kind of ownership interest suffices for an asset to be attachable under TRIA, whether Iranian law vests title to these antiquities in Iran, or whether the plaintiffs' claims are foreclosed by the Massachusetts statute of limitations or the adverse possession doctrine.”

The court went on to write, “We therefore defer to OFAC's reasonable position that an asset can be ‘contested’ for purposes of [Iranian Assets Control Regulations] only if Iran itself has claimed an interest in the asset … Iran has never made such a claim with regard to the antiquities in the Museums' possession. Thus, even if we assume that those antiquities qualify as ‘assets of’ Iran under section 201(a) of TRIA, they would be ‘uncontested’ assets that were unblocked in 1981 … Because the plaintiffs have relied on no other authority to support their claim that the antiquities are ‘blocked’ within the meaning of TRIA, we conclude that the antiquities are not attachable under [TRIA].”

The First Circuit’s decision may be appealed by the Rubin plaintiffs to the U.S. Supreme Court. Meanwhile, trial preparations continue in the federal district court in Chicago. That case, involving the plaintiffs' efforts to attach ancient Iranian artifacts located at Chicago's Field Museum and the University of Chicago, was restarted after the U.S. Supreme Court in June 2012 declined to hear the Rubin plaintiffs' appeal of the Seventh Circuit's ruling against them.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com

Tuesday, February 26, 2013

Spotlighting Fake Antiquities with Record Keeping Laws

Fraudulent antiquities are sold in the same way that knockoff jeans, counterfeit medicines, and fraudulent sports merchandise are peddled to consumers.  The goal of the sellers is to maximize profits by selling worthless goods.

Fake Meryet Amun statue placed into evidence in U.S. v. Schultz.
Fake antiquities can be found on internet auction sites and other sales venues.  Moreover, there have been prominent cultural property cases featuring fakes, including the Arnold Peter Weiss case, where the convicted defendant possessed forged ancient coins, and the seminal case of U.S. v. Schultz, where a smuggler possessed a statue of the Egyptian princess Meryet Amun, which was a fake.

Just as record keeping laws can spotlight black market antiquities and bleach them from the legitimate marketplace, so too can the same laws protect consumers by helping authorities uncover fakes and forgeries offered for sale. A full description of the proposed statutes have been described in a prior blog post.  In brief, the laws would require auction houses, dealers, galleries, shops, and other entities engaged in the antiquities trade to maintain records of the following:

• Descriptions of the names and addresses of the parties involved in a transaction, a description of the cultural object, and the amount of money exchanged.

• All available import documents and export permits connected with the object.


• A description of the provenance/chain of custody/collecting history of the object known to the seller or consignor along with supporting documents, photos, affidavits, and the like when available.


• Any condition reports associated with conservation reports, insurance documents, shipping paperwork, etc.


Such record keeping would help identify fraudulent merchandise and uncover falsely created documents that purport to "authenticate" cultural objects. The information would assist consumer protection authorities located at the Federal Trade Commission and at state attorneys general offices to more easily investigate and prosecute suspected fraudulent merchants.



This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com

Thursday, February 21, 2013

Defendant Cooperates in Korean Currency Plate Case


Wong Young Youn, charged with violations of the National Stolen Property Act (NSPA) for allegedly receiving and transporting a stolen Korean Hojo currency plate, is cooperating with federal authorities. His testimony supported the February 12, 2013 arrest of James Amato in Michigan. Amato is the owner of Midwest Auction Galleries. Both defendants' cases are before the federal district court in Detroit.

Amato is charged with two counts of violating the National Stolen Property Act (NSPA 18 U.S.C. § 2314 and 18 U.S.C. § 2315) and with making a materially false statement and providing a false document knowing the same to contain a materially  false, fictitious, or fraudulent statements or entry in violation of 18 U.S.C. § 1001.
 
The Hojo currency plate is said to be one of three currency plates in existence from the 1890's.
Court records allege that Amato sold the currency plate in 2010 to Youn for $35,000 despite efforts by the Korean Embassy and the U.S. State Department to warn them that the sale could violate the NSPA.

U.S. Immigration and Customs Enforcement's Homeland Security Investigations (HSI) issued a customs summons to Midwest Auction Galleries on June 29, 2012. In response, the gallery "provided an invoice stating the item  was  purchased  by  'Weng Liang' of 'Hunan, China,' for $9,990, according to an HSI affidavit filed with the court this month. The affidavit reveals that Youn allegedly told HSI officials in January that he himself bought the currency plate and that he does not know a person named Weng Liang.

All defendants are presumed innocent unless and until the prosecution proves guilt beyond a reasonable doubt.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com

Friday, February 15, 2013

ACCG Files Cert Petition in U.S. Supreme Court

Bronze doors inside the U.S. Supreme Court.
Photo by David Lat.
Following losses in the district and appellate courts, the Ancient Coin Collectors Guild (ACCG) has brought another court action against the executive branch, this time in the U.S. Supreme Court. The case of ACCG v. U.S. Customs and Border Protection Agency, Department of Homeland Security et al. (docket 12-996) challenges America's import controls over Chinese and Cypriot cultural property.

The U.S. government initiated import controls on ancient coins from China and Cyprus after finding that the cultural objects required protection from pillage and illegal trafficking under the Convention on Cultural Property Implementation Act (CPIA). The ACCG designed a test case in 2009 to contest these import restrictions by attempting to bring ancient Chinese and Cypriot coins into Baltimore from abroad.  U.S. Customs seized the coins, and the ACCG sued.

The ACCG failed to win its case in federal district court in 2011 and appealed.  But the fourth circuit court of appeals struck down the case unanimously in October 2012. The ACCG then filed a petition for rehearing, which the appeals court also rejected.

The ACCG has now filed a petition for certiorari in the U.S. Supreme Court, arguing that the appeals court committed legal errors.  The U.S. Solicitor General has by March 15, 2013 to reply before the justices vote on whether to hear the ACCG's case.

It is not likely that the case will be accepted since the supreme court rejects almost three quarters of petitions for cert.


This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com

Wednesday, February 13, 2013

Ka Nefer Nefer Settlement Terms to be Discussed

The United States Attorney's Office has informed the Eight Circuit Court of Appeals that a settlement may be possible between the federal government, Egypt, and the St. Louis Art Museum (SLAM) in the Ka Nefer Nefer forfeiture case.

The federal district court in St. Louis twice dismissed the case last year before prosecutors filed an appeal to the higher court.  But federal attorneys told the appeals court in a January 17 status report that "the parties are planning to meet between February 25 and 27, 2013 at a location agreed upon by the parties, where Appellant, Appellee, and the Republic of Egypt will each be represented. It is the hope of the parties that this meeting will result in the parties and the Republic of Egypt coming to terms that will settle this matter in its entirety, such that no further appellate proceedings will be required."


This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com

Wednesday, February 6, 2013

Spotlighting Black Market Antiquities with Record Keeping Laws


Antiquities traffickers make their money by selling artifacts bulldozed from archaeological sites, sawed from ancient tombs, and chiseled from revered temples. Fences often convert these legacies of civilization into cash by misusing the services of legitimate dealers and auction houses. Along the way, in an effort to make the cultural objects marketable, customs documents may be forged, collecting histories faked, and physical signs of looting wiped clean by conservation methods. But behind this facade of legitimacy, humanity's heritage vanishes.

Source: Andy Reis
Identifying and separating the black trade from the legitimate art and antiquities marketplace requires sunshine. “If the broad light of day could be let in upon men's actions, it would purify them as the sun disinfects," U.S. Supreme Court Justice Louis Brandeis wisely counseled. His words from a century ago ring true today, which is why the adoption of record keeping legislation spotlighting the sales of antiquities and other cultural artifacts should be considered by lawmakers.

Meaningful record keeping laws would require documentary evidence of transactions involving the purchase, sale, consignment, or transfer of archaeological material over 250 years old and valued at $10,000 or more, individually or collectively. Auction houses, dealers, galleries, shops, and other entities engaged in the trade of would maintain the records. To be effective, the records should minimally contain:

• Descriptions of the names and addresses of the parties involved in a transaction, a description of the cultural object, and the amount of money exchanged.

• All available import documents and export permits connected with the object.

• A description of the provenance/chain of custody/collecting history of the object known to the seller or consignor along with supporting documents, photos, affidavits, and the like when available.

• Any condition reports associated with conservation reports, insurance documents, shipping paperwork, etc.

Such record keeping laws would help to identify illegal activities. As a result, authorities could more easily spot and investigate suspected antiquities trafficking. Where probable cause exists, police and prosecutors could efficiently gather potential evidence of theft, smuggling, fraud, tax evasion, money laundering, or other crimes associated with antiquities trafficking by probing relevant records. Subsequent prosecutions and/or asset forfeitures based on the evidence collected could then be mounted against traffickers.

Record keeping laws may even serve as an initial deterrent to criminals, causing them to think twice about participating in illegal antiquities transactions in the first place for fear that they would be exposed by the paper trail.

Record keeping laws, meanwhile, would elevate the integrity market. They would bolster efforts by sellers and consignors wishing to cultivate an ethical, authentic, and profitable trade by boosting the integrity of the marketplace. Collectors, in turn, would be better protected against sales of stolen, smuggled, fake, or legally questionable merchandise.

The idea of record keeping laws to shine a light on crime that has infected lawful commerce is nothing new. The metals industry, for example, has seen an explosion of stolen copper and aluminum finding their way into the legitimate business operations of scrap metal dealers and recyclers. In response, campaigns to enact state record keeping legislation for the metals industry have been launchedSen. Charles Schumer (D-NY) last August announced a comparable effort to pass federal legislation. The senate bill would make it illegal to sell scrap metal unless the seller documents ownership of the metal and supplies purchase records. Scrap dealers, meanwhile, would be required to keep detailed records of their purchases. In addition, similar state laws exist that cover pawnbroking, another industry burdened by wrongdoers who weave stolen merchandise into legitimate commerce. Record keeping statutes benefiting the art and antiquities marketplace would be based on these precedents.

Source: Plex
Spotlighting black market antiquities would not impose an extraordinary requirement. That is because everyday business practices already demand the collection of basic purchase and sales information. It is common for businesses, for example, to keep detailed records for purposes of income and sales taxes, inventory, customer service, marketing, and the like. Moreover, both Internal Revenue Code 6050I and 31 USC § 5331 mandate business operators--including sellers of antiquities--to document sales transactions over $10,000 on Form 8300. That form requires the identities of the parties making a high-value transaction, a description of the method of payment used, and an explanation of the transaction. This reporting requirement helps uncover money laundering that could aid terror funding, drug trafficking, and tax evasion.

A New York state court decision in the case of William J. Jenack Estate Appraisers and Auctioneers v. Albert Rabizadeh, meanwhile, is expected to motivate parties in the busy Manhattan art and antiquities marketplace to more completely preserve auction sales records. The appellate court ruled that an auction contract, to be enforceable under the statute of frauds, must identify the buyers and sellers in some fashion.

Preserving provenance/chain of custody information, financial transaction records, import documents, and other records that could help spotlight black market antiquities would not place an unwieldly requirement on legitimate dealers and auction houses. Nevertheless, critics may still characterize such record keeping as an attempt to over-regulate. It is certainly true that over-regulation can be a problem both for an industry and for law enforcement. As Winston Churchill rightly observed, "If you make ten thousand regulations you destroy all respect for the law." But the art and antiquities market is already minimally regulated, built less on codified rules and more on personal relationships between sellers and collectors whose purchase agreements might be executed by a handshake. Record keeping laws would not significantly alter the informality of the industry's culture. Rather, they would improve trust in the market by helping to protect sellers from conveying looted or forged cultural heritage, better safeguarding consumers from purchasing illegally looted, smuggled, and inauthentic artifacts and exposing wrongdoers who use the legitimate marketplace to fence illegally acquired cultural material.

Commentators on the other end of the spectrum may desire more stringent regulations. But in the same way that scrap metal record keeping legislation has needed the support of the metals industry, the adoption of art and antiquities record keeping laws must, in turn, have the support of dealers, auction houses, and galleries. A more transparent marketplace is highly desirable, but there would be little political support for such a measure if policies failed to preserve the discretion currently found in the marketplace.

An opinion piece by David Hewett ("New York Auction Houses Must Reveal Consignor's Name to Buyer," Maine Antiques Digest, November 12, 2012) best explains the argument favoring auction house discretion:
Consignors welcome anonymity for a variety of reasons. Some consignors do not want relatives and/or debtors to know they sold the family valuables. Museums and historical societies dread the fact that it may become public knowledge they've had to sell assets to survive. Dealers don't want it known that they're dumping dead stock.
Recognizing these privacy interests, business records should be protected from unauthorized disclosure so that transacting parties could not be identified except by consent, operation of law, a lawful request from an enforcement agency, or through judicial process. This approach strikes the right balance to garner broad support for record keeping legislation.

No one wants an art and antiquities marketplace filled with heritage supplied by thieves, smugglers, forgers, and fences seeking illegal profits. And no one wants heritage to be stolen, looted, or vandalized. That is why effective record keeping laws to help identify and expose cultural property criminals are needed. Those laws should describe the details of purchase and sales transactions, the identities of the parties involved, and the chain of possession of the cultural objects. Shining a spotlighting on the black market would ultimately help safeguard an increasingly endangered archaeological record and work to preserve culture. Greater confidence in the art and antiquities marketplace would result as this step is taken to expose the black market. Because criminal activity thrives in darkness, lawmakers should adopt laws that illuminate the black trade.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com

Friday, February 1, 2013

The 1970 Rule and the AAMD Guidelines

The Revisions to the 2008 Guidelines on the Acquisition of Archaeological Material and Ancient Art issued this week by the Association of Art Museum Directors (AAMD) requires study. Lee Rosenbaum's blog post titled "AAMD’s “Strengthened” Antiquities-Collecting Guidelines Boost the Loopholes" offers keen analysis at this early stage.

An additional observation worth highlighting is the AAMD's request for others--besides museums--to follow the 1970 rule.  The 1970 rule is described in the latest Revisions this way:

"The AAMD, along with others in the international community, including source countries, recognizes the date of this Convention [1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import and Export and Transfer of Ownership of Cultural Property], November 17, 1970, as providing the most pertinent threshold for the application of more rigorous standards to the acquisition of archaeological materials and ancient art as well as for the development of a unified set of expectations for museums, sellers and donors."

Despite the AAMD's aspirations, the organization has not convinced many relevant governmental authorities to abide by the 1970 rule when cultural property forfeiture and repatriation claims are pursued. So it is not surprising to read the Revision's latest plea:
The AAMD was encouraged in 2008 to see that the date of adoption of the UNESCO Convention was recognized not only by museums as a threshold for more rigorous analysis of acquisitions, but also by some countries as a voluntary limitation for enforcement of their cultural patrimony laws that predate the UNESCO Convention. The AAMD hopes that other countries will follow this precedent of voluntary restraint as the AAMD continues to encourage its members to pursue voluntary standards for acquisitions that are stricter than the requirements of applicable law.
The 1970 rule is laudable and worth promoting.  But how does the AAMD intend to convince domestic and foreign governmental authorities to follow it when the latest Revisions do not appear to go far enough to prevent the accession by museums of post-1970 looted, smuggled, or fraudulently sold antiquities?

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com