In an attempt to curb illicit trafficking of fine art and antiques, a group of Geneva based art professionals known as the Responsible Art Market Initiative (RAM), which include dealers and art law attorneys, will publish a dossier on art market best practices for free ports and custom-free zones. There have been numerous reports of looted art appearing in free ports. Of recent note, an Amedeo Modigliani painting worth approximately $20 million with Nazi links was located last year in the Geneva free port. However, despite this high profile Swiss scandal, the Responsible Art Market Initiative has reported that its dossier of guidelines will serve the art market at large, and is not solely designed for the Swiss market (which has been reported to only make up 2% of the art market). Our contributors have noted in previous posts that the upsurge in the use of free ports by collectors has led to concerns over the use of such storage spaces for illegal activities.
The New York Times recently featured an interesting article on the rapid growth of free ports around the world used by collectors and dealers for the temporary storage of art works. Many would be surprised to learn that more than a million of some of the most treasured art works ever created, such as ancient Rome treasures, museum quality paintings by old masters and an estimated 1,000 works by Picasso, are crated or sealed in tight storage vaults within the walls of such storage facilities.
With the rise in the price of art, masterpieces and other exquisite art works are increasingly being stored away in free ports by collectors who are interested in seeing such works appreciate in value rather than filling up wall space to be viewed. As collectors become more financially savvy with art being treated as a capital asset in their portfolios, free ports have effectively become the support for all of this.
This recent upsurge in the use of free ports by collectors has led to concerns over the use of such storage spaces for illegal activities as well as worries in the art world on the effect such wholesale storage has on art itself. Within the last few decades, a small group of free ports have increasingly served as “storage lockers” for the wealthy. Free ports are geographically located in tax-friendly countries and cities and offer attractive savings and security to collectors and dealers alike.
In addition to the at least four major free ports in Switzerland that specialize in the storage of art and other luxury goods, such as wine and jewelry, there are four more free ports around the world, including Singapore (2010), Monaco (2012), Luxembourg (2014), and Newark, Delaware (2015).
Out of concern that these rapidly growing private storage spaces could become havens for various illegal activities (i.e., contraband, money laundering, etc.), Swiss authorities initiated an audit back in 2012, the results of which revealed a significant increase in the value of goods stored in some warehouses since 2007 with an increase in high value goods such as art. The audit estimated that there were more than 1.2 million works of art in the Geneva Free Port alone in which some of the art has not left the facility in decades.
Many in the art world remain critical of free ports. With many valuable masterpieces being stored outside of public view, critics argue that works of art are created to be viewed. Those who disagree point out that paintings are not a public good as much art work was created as private property. Others say that free ports represent a financial system in which investors lack a connection with the art they purchase, but recognize that the storage warehouses enable responsible collectors to manage their art collections and limited wall space.
Collectors and dealers often decide to utilize the free ports for the storage of their art for more common reasons than tax avoidance. Some collectors and dealers simply have no more room in their homes and galleries. In a free port, their valuable art works are protected in climate-controlled environments behind fire-resistant walls and often under video surveillance. Some of the free ports even have viewing rooms where collectors can view their art and show it to potential purchasers.
According to an officer of the Geneva Free Port, as a result of the audit, the Swiss have been working to address concerns over the lack of transparency. As of this September, all storage contracts will require clients to allow inspections of any archaeological artifacts they would like to be stored at the facility.
Only time will tell whether additional free ports across the world will take steps towards increasing transparency as to inventory and ownership as collectors and dealers continue to store their valuable art works in such warehouse facilities.
Earlier this month we posted about the arrest of Yves Bouivier, the high-profile Swiss art broker who was indicted for fraud and money laundering. Recent reports now confirm that a court has ordered a freeze of all of Bouvier’s assets and the handover of a 1951 Mark Rothko painting. In addition, Swiss police have conducted raids on two freeports owned by Bouvier.
The freeports have come under scrutiny by regulators in recent years. They are large, maximum security storage facilities that allow individuals to store expensive valuables while avoiding customs duty and sales tax.
Bouvier is currently being held on €10 million bail and denies all charges.
Freeports, especially those in Switzerland, are gold mines of valuable art, according to this New York Times article.
Simon Studer, a gallerist, tells of a job he had 25 years ago at the Freeport in Geneva, examining thousands of Picasso works.
Art collectors, gallerists, and dealers are interested in these Freeports for both the security and the tax treatment they offer. Goods are stored there with no import taxes or duties, which can range from 5-15 percent in many countries. The owner also pays no transaction tax if the work is actually sold within the Freeport. Taxes are only owed to the country where the work ends up after its time in the Freeport.
This form of art storage is becoming even more prevalent. The Swiss Freeport is opening an 130,000-square-foot warehouse, specializing in art storage, in 2013. A number of other cities throughout the world, such as Beijing and Singapore, are following suit by opening similar ports.
[This entry was drafted with the assistance of Nicole Dornbusch].
In recent art world news, the technology augmented reality (the cousin of virtual reality) has been making headlines in the media these days. Simply defined, augmented reality (AR) technology superimposes a computer-generated image on a user’s view of the real world hence providing a composite view. It has been widely reported that AR technology promises to transform how we learn and interact with the real world and now this includes the art world.
Many already know that art has been a relative latecomer to the digital revolution in recent years. People become accustomed to associating the value of art to seeing such art in person. As such, art galleries and museums still rely on special exhibitions for a significant share of their revenue.
ArtFinder, a London-based e-commerce start-up, has built an IMDb-type searchable digital catalog containing hundreds of thousands of artworks in the form of paintings, sculptures, and art-related media. The site also includes “essays on artists, artworks and artistic movements, making it a useful (and free) reference resource for art discovery, while social features open up new opportunities for enjoying art. It allows you to virtually collect and share your favourite artworks, and as users build up a profile that reflects their particular tastes, the system also generates further recommendations of what they might like.”
ArtFinder’s co-founder Chris Thorpe believes that “this element of recommendations, when combined with geo-location, adds a crucial element of serendipity to art discovery and keeps that physical connection to the real world which is so crucial to connecting emotionally with a piece of artwork.”
Artivive, a Viennese start-up recently founded in 2017, offers an easy to use AR tool that allows artists to create new dimensions of art by linking classical with digital art. Artivive’s AR tool also enables museums an innovative way for visitors to interact with exhibits in which the visitors use their smartphones or tablets to experience the layer of AR. Artivive aims to become the “go-to solution for artists, galleries and creators and change the way art is created and consumed while building a community and movement around augmented reality art.”
Artivive’s CEO Codin Popescu believes that the “experiential element will always be central to how people enjoy and relate to artworks.” Specifically, Popescu believes that the key is “to use immersive technologies such as Augmented Reality to seamlessly add digital elements to those existing and well-loved experiences, making them richer and more accessible in the process.”
Prior to AR tools such as the type offered by Artivive, for artists to create in AR they had to develop their own isolated solutions, which required resources and technical skills, but today with the latest AR technology artists can take visitors on a journey in time and enhance art with illustrations or discuss how such art was made. For museums, galleries and other art institutions, AR technology offers a new and innovative way for visitors to interact with exhibits.
It has been frequently reported that the art business needs to find ways of engaging the next generation of buyers. AR technology may be just what the art business needs as it has certainly transformed how we experience art today.
For further information on the application of this dynamic, innovative technology to art, see “Augmented Reality Will Reinvent How We Experience Art,” recently published online by Forbes on June 20, 2018.
In recent art world news, one of the largest art scandals in New York has come to a close with the recent settlement of the last of ten lawsuits brought against Ann Freedman, the former director of the now defunct Knoedler Gallery, that arose from a $70 million forgery ring forcing the long established, renowned art gallery to close in 2011. The lawsuit was brought by a California art collector who with her then husband had purchased a purported Jackson Pollock for $3.1 million in 2000. The terms of the settlement were filed in federal court in Manhattan in late August and were not disclosed.
According to Freedman’s attorney, all of the cases had been amicably resolved and Freedman was thankful that she can now focus on her own art gallery, FreedmanArt, which opened on the Upper East Side in Manhattan in 2011.
The plaintiffs in the lawsuits, who also sued Knoedler Gallery and its holding company 8-31 Holdings, alleged that “Knoedler and Freedman knew or should have known that the works were fake, an allegation the defendants denied.” Two lawsuits against Knoedler Gallery and 8-31 Holdings remain ongoing.
For our previous coverage of the Knoedler Gallery litigation on the Art Law blog, see “The Knoedler Gallery Litigation – Can Art Buyers Rely On Dealer Representations?” and “Extradition Of Alleged Member Of Knoedler Forgery Ring And Settlement Of The Knoedler Litigation,” published online in February 2016.
Norman Rockwell is as famous as apple pie for his iconic depictions of American life. Once shunned by the art world as an ordinary illustrator, Rockwell’s saccharine vignettes are now prized paintings.
The recent auction sale of a painting of three umpires for $1.6M USD at auction reveals that even mere studies by the artist are valuable. Research of his works prior to the auction at Heritage Auctions (an internet based auction gallery that is headquartered in Dallas, Texas with showrooms all over the country), revealed that Rockwell, best known as The Saturday Evening Post cover artist, created the painting of three umpires in the rain as a study (16 in. x 15 in. oil on paper) for his iconic 1949 magazine cover entitled Tough Call. The original painting also known as Game Called Because of Rain, Bottom of the Sixth, or The Three Umpires is in the National Baseball Hall of Fame.
Although thought to be a print, luckily, additional analysis of the work was conducted and its status as an original work by Rockwell was established. The painting, which had been given by the artist himself to John “Beans” Reardon, one of the umpires depicted in the painting, remained in Reardon’s family until the auction gallery was contacted regarding the potential sale of sports memorabilia.
Iconic film directors and friends, George Lucas and Steven Spielberg, have been enthusiastic collectors of Rockwell for decades. Notably, in 2016, Lucas donated $1.5M USD to the Norman Rockwell Museum, which facilitated a traveling art exhibition of the museum’s work. The highest grossing Rockwell painting at auction, Saying Grace (1951), was sold in 2013 for over $46 M USD (over twice the high estimate).
It was reported that Lucas was the purchaser of the $46M Rockwell, which was to be showcased in his forthcoming Lucas Museum for Narrative Art. However, Saying Grace is not represented on the Lucas museum’s website. Earlier this year, Lucas received unanimous approval for his $1B museum to be built in Exposition Park in Los Angeles, California. The museum will open in 2021. Lucas intends for his museum to “be a barrier free museum where artificial divisions between “high” art and “popular” art are absent, allowing you to explore a wide array of compelling visual storytelling.”
I wonder if Albert C. Barnes were alive today whether he would support Lucas’ vision.
Richard Polsky writes:
Catalogue rasionnes, which are compendiums of an artist’s entire body of work, are always insightful. The official Andy Warhol Catalogue Raisonne is one of the best; an amalgam of impressive research and good design. And it’s still ongoing, with more volumes to come in future years. But just like every famous artist’s catalogue raisonne, from Picasso to Pollock, it’s not complete. There are always discoveries of long-lost paintings that never made it in, paintings listed as authentic which turned out to be bogus, and re-evaluations of paintings based on fresh information that comes to light.
As art authenticators who specialize in the work of Andy Warhol (along with Jean-Michel Basquiat and Keith Haring), the majority of paintings that we are asked to examine turn out to be fakes. But every now and then, we come across a picture where all of the stars align; image, materials, and provenance. Or in some cases, paintings where the Andy Warhol Art Authentication Board had a different interpretation of the artist’s intent. Regardless, we decided to compile the Warhols that we’ve authenticated in an online catalogue raisonne addendum, which will be ongoing as we come across more genuine paintings, and available for free on our website. The catalog will be known as the RPAA Andy Warhol Catalogue Raisonne Addendum.
We want to make it clear to our audience that the Addendum has no connection with the official Andy Warhol Catalogue Raisonne. We seek to retain our independence. Our objective is to present the art world with a more complete list of genuine Andy Warhol paintings, which will hopefully lead to a greater understanding of his work. The Addendum should prove beneficial to collectors, dealers, auction houses, and scholars.
Perhaps the most important thing that might come of posting the Addendum is that it will help define — once and for all — what constitutes an authentic Andy Warhol painting. For too long, both the academic world and the art market have debated its definition. Our position is simple; it comes down to the artist’s intent.
Richard Polsky has accumulated 40 years of expertise in the contemporary art world as a gallery owner, author of multiple books on the art market, lecturer, and provider of litigation support. Richard Polsky Art Authentication can be viewed at www.RichardPolskyArt.com.
The US. District Court for the District of Columbia recently denied a preliminary injunction seeking the reinstallation of a controversial “anti-police” painting at the U.S Capitol complex.
David Pulphus, a student artist from Missouri’s First Congressional District, and William Lacy Clay, the congressional representative for that district, filed a lawsuit claiming that their First Amendment rights to free speech were infringed upon when the Architect of the Capitol, Stephen T. Ayers, removed Pulphus’s painting from a display of student art.
Pulphus’s painting was selected to represent Clay’s congressional district in the 2016 Congressional Art Competition, and was hung in the Cannon Tunnel in the U.S. Capitol complex in June 2016 with the other winning artwork. The painting was removed several months later by the Architect of the Capitol (who oversees the competition), after receiving several complaints that the painting was “anti-police.”
The Court prefaced its opinion stating that “[a]lthough the Court is sympathetic to plaintiffs given the treatment afforded Pulphus’s art, under controlling authority this case involves government speech, and hence plaintiffs have no First Amendment rights at stake.”
Read the Court’s opinion here.
I was very inspired after reading this recent online NPR article on blind and visually impaired art enthusiasts being able to “see” and experience works of art at the Smithsonian American Art Museum in Washington, D.C. through uniquely guided tours. The museum offers America InSight tours twice a month led by specially trained docents to blind and visually impaired visitors.
During these specially guided tours, the dozen or so volunteer docents use verbal descriptions of artwork as well as other senses in their verbal descriptions, such as the sound of music to bring to life a work of art. The visitors are encouraged to imitate the pose of a sculpture while participating in the tour. In some cases, low vision and blind visitors can even touch some of the art with the use of Latex-free gloves.
While moving slowly through the museum during the tour, the blind and visually impaired visitors are able to “see” the artworks in their imaginations with some getting close to the artwork to view it better with the aid of a magnifying device.
The Smithsonian American Art Museum’s America InSight tours certainly prove that there are a number of ways to experience works of art and not just through sight.