The Gurlitt Collection and the draft for the new Kulturgutschutzgesetz...

DR. HANNES HARTUNG

PA R T N E R , L E C T U R E R , I C O M - W I P O M E D I ATO R

M A A S T R I C H T U N I V E R S I T Y | M A R C H 1 9 , 2 0 1 6

The Gurlitt Collection and the draft for the new Kulturgutschutzgesetz:

How Germany deals with “its” private collections

The Munich Art Trove („Schwabinger Kunstfund“) started with a crime and a scoop

09.03.2016 Hannes Hartung 2

Then the case has come to Bern


Now they all fight to get or take care for the precious collection…

09.03.2016 Hannes Hartung

4

Why did Bern accept the Gurlitt collection?


The answers are at hand:

Only a very small percentage of the collection has to be considered as looted art. The Taskforce detected only 5 works suspected to be Raubkunst.

A larger scale of 382 works is degenerated art. It is probable that German museums now will aise psychological issues in Bern.

The know how in Switzerland is comparable to Germany

Bern also gets …

Many wonderful pieces of art without any looted / degenerated art background

Real estate in Munich and Salzburg (to cover costs)

Money, stocks etc. (to cover costs)

In the end it will still turn out to be a wonderful bequest worth three digit million after all restitutions and the deductions of all costs to be spent. This is why also parts of the family are interested to take part…

Agenda

09.03.2016 Hannes Hartung

The development of the case from Schwabing to Bern Dr. Hildebrand Gurlitt The protagonists The structure: Degenerated art – looted art –private posession Legal issues

The confiscation of the Gurlitt collection, a legal basis for provenance research? The „Lex Gurlitt“ debate The Verfahrensvereinbarung (agreement with Bavaria and Germany) The claims (Matisse and Liebermann) Personal rights of Cornelius Gurlitt and claimants What are fair and just solutions?

The acceptance of the inheritance of the Kunstmuseum Bern The legal battle between the Gurlitt family and the Kunstmuseum Bern Conclusions and outlook

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The development of the case


September 22, 2010 Cornelius Gurlitt is searched by German customs officials while traveling on a train from

Zurich to Munich. September 23, 2011 The local court in Augsburg issues a judicial search warrant at the request of the public

prosecutor's office in Augsburg. February 28 to March 2, 2012 Cornelius Gurlitt's apartment in Schwabing, Munich, is searched and his art collection is

seized. A total of 1,406 items are confiscated, including the entire Schwabing portion of the collection comprising 1,280 works.

November 4, 2013 The German news magazine FOCUS publishes details of the existence of the collection and

its seizure more than 20 months previously. November 11, 2013 The Bavarian Ministry of Justice announces that it will be working with the Bavarian

Ministry of Culture, Germany's Federal Ministry of Finance, and the Federal Government Commissioner for Culture to set up a taskforce for provenance research headed by Inge Berggreen-Merkel. Details of artworks that are suspected of being stolen are also to be published on the website of the coordination agency (Koordinierungsstelle) in Magdeburg.

Development


Early January 2014

Dr. Hannes Hartung, Esq., Munich retained for civil representation and Prof. Dr. Tido Park, Esq., Dortmund, supported by Derek Setz, Esq., Munich, for criminal representation.

February 10, 2014

238 artworks are safekeeped in a house in Salzburg belonging to Cornelius Gurlitt (in two tranches). These items were seized at the house in Salzburg and were then insured and transported to a safe place at Mr. Gurlitt's request.

February 14, 2014 Formal complaint against the seizure of the Schwabing Collection is filed in

March 27, 2014 The Sueddeutsche Zeitung is publishing wrong headlines about the restitution of the Matisse

April 7, 2014

Procedural agreement between Gurlitt and the State of Bavaria concluded

April 9, 2014

The state prosecutor in Augsburg announces that the confiscation of the collection is canceled

May 6, 2014 Cornelius Gurlitt dies. In his last will he has appointed the Kunstmuseum Bern to be the sole heir.

The legal battle starts…


The Kunstmuseum Bern (KMB) accepts the inheritance and concludes „Blankoscheck“ treaties with Germany and Bavaria at November 24, 2014: Costs and custody over looted works (Holocaust/ degenerated Art) remain in Bavaria Decisions over the restitution of suspicious/ looted works remain in Germany/Bavaria Germany takes over any legal fees out of restitution claims against KMB It has not been said how the inheritance taxes are dealt with wich have to be paid by KMB

Uta Werner -a cousin of Mr. Gurlitt- applies for a probate in late November 2014 Says she is irritated about the communication about Cornelius Gurlitt and his relatives Discussions are starting about Gurlitts last will and his testacy Is this the main legal issue? No, rather the Motivs in his last will:

Gurlitt wanted to make sure that German administration is no longer handling his collection. The opposite is now reality.

The Nachlassgericht rejects the application in late March 2015 and proclaims that defects in the last will could not be proved

The expert of the Senate (OLG Munich) determined that there is no proof that Cornelius Gurlitt had defects to form his last will

The Oberlandesgericht Munich decides over the appeal of Uta Werner this year

Dr. Hildebrand Gurlitt


Dr. Hildebrand Gurlitt was appointed as director of the König-Albert-Museum in Zwickau, Germany, on April 1, 1925. He was dismissed on April 1, 1930, due to his active purchasing and promotion of modern art. Gurlitt moved to Hamburg and in May 1931 was appointed as managing director of the Hamburg Kunstverein. Due to his partially Jewish origins he vacated his position on July 14, 1933, in response to Nazi pressure. In Hamburg, Dr. Hildebrand Gurlitt established a successful gallery for modern art.

The protagonists


The client Cornelius Gurlitt The custodian Christoph Edel The PR Litigation expert Stephan Holzinger The defence lawyers: Professor Tido Park and Derek Setz The art lawyer Dr. Hannes Hartung

The Anspruchsteller (claimants) The State prosecutor in Augsburg The ministry of justice in Munich BKM/ Germany: Monika Grütters and Günther Winands The Media and their demands The public opinion

NOW The sole heir: Kunstmuseum Bern contested by Uta Werner, cousin of

Mr. Gurlitt

Structure of the Gurlitt collection


München-Schwabing

Private paintings of client and Lois Gurlitt, offered for return from state prosecutor

382 pieces degenerated art from German Museums

0,3 % of all with clear evidence of Nazi loot and claimants (six pieces)

Taskforce reports in the end of 2015 only 5 works with clear suspicion!

More than 900 works were alleged to be looted without any further proof („Raubkunstverdacht“)

Salzburg

238 artworks, more than 40 of them oil on canvas

Criminal law


Why have the artworks been confiscated?

Gurlitt was charged to have committed tax and customs crimes

Is a state prosecutor allowed to conduct provenance research?

NO!

Is there any legal basis for the confiscation of the complete collection?

NO!

Solution: The Verfahrensvereinbarung (procedural agreement)

The procedural agreement


Established a legal basis for the provenance research on voluntarily base for one year

The costs for the taskforce born by the state

Looted Art must stay in public hands until the case is settled

Leaves the collection in custody of the State of Bavaria

Stipulated the handling of the claims under the framework of the Washington Principles

Primacy: Restitution, but also compensation, joint sales and ex gratia

The „Lex Gurlitt“


The Kulturgutrückgabegesetz suggests that the exception of the time lapse and prescription shall not be raised by a person who has acquired an item in bad faith

The burden of proof with probatio diabolica stays the same

Was Cornelius Gurlitt in bad faith when he inherited the collection in 1968 from his mother? What could he know at that time without internet and closed archives?

The suggestion of Bavaria is not dealing with the legal means to receive good title. Acquisitive prescription (Ersitzung, compare § 937 BGB) remains and shall not be modified.

The German Ministry of Justice also made a draft (Referentenentwurf), but stopped it because of the discussion in respect of the Kulturgutschutzgesetz

Personal rights of Mr. Gurlitt


Personal Rights of the art collector Cornelius Gurlitt

Privacy, discretion Preliminary Injunction received by the Landgericht Hamburg against FOCUS

Has the media the right to show the whole collection to their readers? Claim of the BILD Zeitung rejected at the Bayerische Verwaltungsgerichtshof

Has lostart and the state prosecutor the right to show the collection under www.lostart.de? Lawful only after the Verfahrensvereinbarung, but not before

Mr. Gurlitt is not the face of Holocaust Looted Art, but shown as such: The Sueddeutsche Zeitung (SZ) has published the Highlights of the Salzburg Collection only three days after the death of Mr. Gurlitt. One month before, the PR Communicator Mr. Holzinger has shown nearly all paintings to Mr. Mascolo and Mr. Leyendecker from SZ (which has been filmed at the secret warehouse) These actions are serious breaches of the (post mortal) personal rights of Cornelius Gurlitt

http://www.lostart.de/

Fair and just solutions


Rights of claimants

Fair and just solutions in cases of proven Holocaust looted art

Acknowledgement of the fate of their family

Proven bona fide acquisitions should be considered in the settlement

Restitution should ever be a moral and not a legal/monetary issue.

What are fair and just solutions?

Restitution (with obligation to keep the art for a certain period of time?)

Compensation

Joint sale

Combination of all

Are there higher criterias for the Kunstmuseum Bern as the sole heir?

Matisse, Femme assise


Liebermann,Two riders on the beach


Conclusions and outlook


The „Munich Art Tove“ has much less Holocaust Looted Art than expected. Also the value of the collection is much lower.

The biggest test case of the Washington Principles has failed so far.

Provenance research has to be conducted in all collections, public and private

Germany still has many cases with either forced sales or looting not resolved so far.

Fair and just solutions can not be found with the „help“ of PR experts, journalists, headlines and media

Morality is stronger than the law.

Any laws concentrating on time bar like the „Lex Gurlitt“ are insufficient to resolve Holocaust Looted Art cases

PART II

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The current discussions on the Draft for a New Cultural Property Protection Law in Germany

(New Kulturgutschutzgesetz)

The Government Draft for

a New Cultural Property Protection Law


Verordnung from 1919 after World War I

Current Kulturgutschutzgesetz after Worls War II in 1955

The goal of the 1955 Law was and is to keep national valuable cultural property in Germany

Export permit necessary for national valuable cultural property which is listed in the national list (Listenprinzip)

Only few items are listed (approx. 6000 items) in the national list although German Länder were asked in the last 60 years to do so

The goal of the new law: Keeping national treasures also from private hands in the country for German museums without paying for it or with low payments (see the first draft from June 2015)

German Government passed the draft at November 4, 2015 (Regierungsentwurf)

The Bundesrat has raised serious concerns, especially administration costs

Now the Bundestag is discussing this draft.

Report of the Federal Government on Cultural Property (2011)


Statutory improvement of the German law on cultural property protection and its simultaneous adaptation to conform to EU standards are urgently needed. In terms of the legislative process, this can best be achieved by merging the acts presently in force to form a single statutory instrument governing cultural property protection. Comparisons with other European legal systems have confirmed this. Switzerland and Italy have also enacted uniform legislation in the area of cultural property protection. Moreover, a revision of the body of law offers the opportunity to strengthen the legal framework for cultural, academic and scientific exchange in the area of international loaning of cultural property. A revision of the law governing cultural property protection in Germany must be seen in the context of current developments at EU level: In 2011, for instance, the EU Commission undertook an evaluation of Directive 93/7/EEC on the return of cultural objects unlawfully removed from the territory of a Member State. The outcome of this evaluation was that the EU Commission is now planning a revision of Directive 93/7/EEC for 2013 to close loopholes in protection and more effectively structure the return of unlawfully removed cultural objects within the EU. This revision of the Directive envisioned for 2013/2014 was the key reason prompting the Federal Government to refrain from submitting a legislative revision proposal during the 17th electoral term. The revision of the German law governing protection of cultural property could thus be combined with the necessary transposition of the amended EU Directive into German law as from 2013/2014.

Which painting is national valuable?

RA Dr. Hannes Hartung

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Why make the new Law? The statements of the BKM

09.03.2016 RA Dr. Hannes Hartung

As explicitly assigned by the Coalition Agreement o “The coalition intends to amend the Act to Protect German Cultural Property (Kulturgutschutzgesetz) and create consistent legislation improving the protection of cultural property, in order to ensure that cultural property exported from other countries illicitly is returned and to protect German cultural goods against dispersal abroad.”

The federal states have been calling for better protection against removal for years. This is correct only in part. Many states even abandon protection laws, e.g. for national

monuments

Germany needs to implement EU Directive 2014/60 of May 2014 on the return of cultural objects unlawfully removed from the territory of a Member State. The Austrian implementation of the EU Directive is much more concise without any

unnecessary restrictions on private collectors and the art market

Germany needs to improve implementation of the UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property in response to criticism of the 2007 law. Which criticism of the 2007 Law is meant? The implementation was too late, but that´s

it.

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Inclusion procedure (Eintragungsverfahren)


Cultural property has to be listed if…

It is very important for the cultural heritage of Germany, his Länder or (Historical) Regions

And therefore is relevant for the German cultural identity

His export would mean a great loss for German national cultural identity (compare the current law)

Living artists must permit the inclusion

Problem: Can a work of a Internation/International artist be German Art or relevant or German cultural heritage? NO!

Statement of the German Cultural Government (BKM)


Since 1955, the federal states have been able to registrate cultural property as “of national significance” if it meets the relevant criteria.

The current law does not explicitly define “national significance” in relation to cultural property; there are only recommendations by the standing conference of the state ministers of cultural affairs which are not legally binding.

In the new law, the criteria for registration will be more clearly defined, and a statutory instrument (requiring Bundesrat approval) will clarify this in further detail.

No clear definition has been proposed so far

For sixty years, we have followed the practice of registering nationally significant cultural property (2,700 entries; a single entry may cover multiple objects, as in the case of collections). The new law and statutory instrument will build on this experience.

Just keep the old law with the so called listing principle!

Statement of the BKM II


Up to now, contemporary art has not been registered as cultural property of national significance. (One exception: A work by Günther Uecker, after it was purchased by the Federal Government and the states for the state of Mecklenburg-Western Pomerania.)

This is not correct: Art was registered for 60 years since 1955, but even the important art from German artists in German museums were not listed

The statutory instrument will clarify the criteria for registration et al. to indicate that it does not apply to contemporary art, as is currently the case.

Modern Art is after WW II and will soon be relevant for the Law

Clarification: Registration as having national significance is not expropriation; the Federal Administrative Court has recognized it as being compatible with the fundamental guarantee of property in Article 14 of the Basic Law (German Constitution).

This is not correct: It is a so called Inhalts- und Schrankenbestimmung

The aims of the new Law


Implementing EU Directive 2014/60 of May 2014 on the return of cultural objects unlawfully removed from the territory of a Member State; This only applies to the import and not the critical export rules

creating a single, consistent law to protect cultural property (currently divided between three laws); Cui bono? There are even more laws in German art law

simplifying and updating the law (in linguistic and legal terms); Really? No clear definitions in the draft so far

improving protection against export and making the law conform to EU law (export permit already required by other EU member states, with the new law also for export within the single market for certain categories of cultural property, depending on age and value); Really? See below

better implementing the 1970 UNESCO Convention (lawful export from countries of origin required for lawful import to the federal territory)

The aims of the new Law II


fighting illicit excavation and trafficking in cultural property, and thus indirectly fighting terrorist financing (illegal excavation provides funding for terrorist activity, especially in the Middle East);

improving conditions for the art market in Germany (through greater transparency, simplification and legal certainty; due diligence obligations will increase trust in the German art market and improve consumer protection);

This is a lie. Trust in German art market has no need to be improved, but the antique market will dissapear and others will leave Germany

simplifying international loans between museums (simpler administration and more cultural exchange);

There are only few approaches in this context which are quite irrelevant (offene Genehmigung)

providing greater protection for public collections (the law covers all cultural property), including explicit rules on loans.

This is already achieved with the existing Law

The future registration by the federal states of “nationally significant” cultural property


The export rules are a mechanism for the federal states – an estimated 90% to 95% of cultural property is not “nationally significant” and will therefore receive an export permit from the states without difficulty (if at all necessary: export permits are required only for property older than 50 years and worth more than 150,000 euros). Less than 10% will even be considered, on a case-by-case basis, for registration by a federal state as “nationally significant” cultural property. Not correct! Estimates and experts say that the new law will have thousands of

procedures for nearly all antiques, stamps, old coins etc. costing at least € 50 Mio. per annum!

The German Bundesrat has confirmed this already and says that the German Länder will not pay this bill!

The notion of having to report or even scan entire private collections is absurd and was never considered. This clearly depends on the practical execution of the Law. It can happen anytime.

The current draft of the legislation does not contain a right of access for officials, as provided in many of the state laws on the protection of cultural property. The first draft contained this exactly and further breaches of constitution, obviously for

fiscal reasons.

The impact of the new law on the German Art Market


The new law will give Germany, like 26 of the other EU member states, rules for exporting cultural property within the single market. As already noted, even the European Member States with successful art markets already require export permits for the single market, in addition to the permits required for exports to non-EU countries.

Successful? The Italian Art Market is dead since the new law there.

During the oral hearing on the new legislation, art market representatives argued in favour of using the same age and value criteria for the new rules on exports as in Council Regulation (EC) No 116/2009, for ease of use.

Art market representatives argued for a free art market in Europe!

The Impact II


Large segments of the art market will not be affected by the new legislation, because the new export rules do not apply to most contemporary art. According to art market sources, trade in contemporary art in Germany is one reason for the relatively low number of applications for export permits under the EU regulation compared to France or the UK (currently about 1,200 applications and permits issued per year). Absolutely not correct! Parts of the German market for antiquities have

already closed and there are many strong duty stipulations (legal duties: Sorgfaltspflichten, Aufbewahrungspflichten) against the market and collectors. Even normal people (e.g. collectors of coins and cheap things) are affected by this dealing with art for the first time.

There are very hard criminal laws in the draft which makes art dealers and art collectors comparable with thieves, e.g. if they try to export national valuable cultural property

Against European Law?

Sammlertreffen in Berlin zum KGSG RA Dr. Hannes Hartung

Article 36 (ex Article 30 TEC)

The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property.

Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.

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Should Germany follow the British system of export licenses?


The British system results in protection depending on the state of the public coffers and would ultimately make protection against removal superfluous in Germany, because it only protects what can be bought with public funds.

Supporters of the model fail to mention that the British system leads to expensive artworks leaving the country even though they have been classified as nationally significant, and that in some years, “nationally significant” works valued at more than 50 million pounds have been sold abroad. Why should significant German Art not be shown worldwide?

The Federal Administrative Court ruled in 1993 that “it cannot be the task of the state to participate in the international art market by exercising the preemption right and in this way nationalizing valuable cultural property”. This decision is not general binding and just in one specific case

Good practice in Germany: Private parties, the Federal Government and the cultural foundation of the federal states (Kulturstiftung der Länder) regularly buy cultural property of national significance. This is an argument for the British system

Conclusion


The new law must differ between Import and Export

The old export system and the old law with the list principle must be kept

The stronger import system should be evalued in respect of the IS and his prevention successes (illicit trade, bandaroli etc.)

The draft is against German constitution and EU regulations

Germany must do his homework for the current national list first.

The criminal regulations in the draft must be wiped out.

Trust must be reestablished between the collectors and the museums

So far, the new system cannot be financed or executed by the administration in charge (Erfüllungsaufwand). For this simple reason, it is possible that the German countries (Länder) hinder the new Law.

Thank you very much

09.03.2016 37

Contact details Dr. Hannes Hartung Rechtsanwalt, Partner

Buse Heberer Fromm Rechtsanwälte Steuerberater PartG mbB Barer Straße 7 80333 München Telefon: +49 89 288030-140 Telefax: +49 89 288030-100 [email protected] www.buse.de www.Kunstanwalt.com

mailto:[email protected]

http://www.buse.de/

http://www.kunstanwalt.com/

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