Recent legal measures make it more difficult to import Chinese cultural relics into the United States.Many US residents who spend time in China acquire Chinese art, with some becoming serious collectors. A small but important segment of the US art industry—comprised of museums, art schools, professional dealers, auction houses, and art lovers—is also one of the most important participants in the global field of Chinese art. A recent agreement between China and the United States, however, has made it more difficult to bring some of these artworks into the United States. As most importers of Chinese art into the United States are US citizens, the agreement also raises concerns about restrictions on Americans’ access to the Chinese art market. One potential result of this agreement is that the market for Chinese art could wither in the United States and move to other countries that do not have such restrictions.
China and the United States in January 2009 signed a memorandum of understanding (MOU) on imports of certain art and other objects from China. The MOU calls for the United States to restrict imports of objects designated “archeological material” and produced in China before 907 AD, the last year of the Tang Dynasty, as well as sculpture and “wall art” that are at least 250 years old. As a result of the MOU, the US Customs and Border Protection (CBP) agency of the Department of Homeland Security amended its regulations to impose import restrictions on a wide range of items, including those on its Designated List of Archeological Material. The amended CBP regulations altered US Customs import restrictions but did not affect the legal status of Chinese art that was inside the United States on January 16, 2009.
Art industry specialists are concerned that the revised CBP regulations are unclear at best and could harm the healthy trade and non-commercial exchange of Chinese art by US residents. One result of the MOU and the revised CBP restrictions has been to cast a chill over commerce in all Chinese objects that could be designated archeological material. The MOU and the CBP designated materials list define archeological material broadly and unclearly, making it difficult for potential importers of Chinese art—from tourists and museums to dealers and collectors—to know what objects are permissible and how to ensure that purchases or loan objects can be imported into the United States. Much of this uncertainty can be dispelled by taking a closer look at the relevant US and PRC regulations.
Overview of China’s cultural relics policy
The PRC Ministry of Culture (MOC) is the highest governmental organ tasked with supervision and administration of Chinese art. The PRC State Administration of Cultural Heritage (SACH), which MOC oversees directly and foreigners sometimes refer to as the Cultural Relics Bureau, is responsible for all of China’s cultural relics policy. SACH has subordinate divisions at the provincial and municipal levels. Although SACH technically has sub-ministerial ranking, it has unusually broad powers and a high degree of independence, allowing it to function virtually as a ministry.
Laws related to art and to objects designated as “cultural relics” are principally drafted and revised by SACH and MOC and passed by the PRC National People’s Congress. The PRC legal framework for art, cultural relics, cultural heritage, and the protection of non-Han minority cultures in China is still developing. China issued its first national law on cultural relics, the PRC Cultural Relics Protection Law (Cultural Relics Law), in 1982, and the latest amendment to the law was made in 2007. Beginning in 2002, China issued a series of new laws and regulations on cultural relics, including the 2003 Cultural Relics Protection regulations, the 2007 Administrative Measures for the Entry-Exit Examination and Verification of Cultural Relics, and the 2007 Standards for the Entry-Exit Examination and Verification of Cultural Relics. The express purpose of the new regulations was to advance two increasingly important policy aims. The first was to extend legal protection to a wider range of objects by broadening the definition of “cultural relic.” This was achieved by resetting the operative date of production or manufacture, before which an object would be deemed a cultural relic, from 1795 to 1949 for most objects. (The operative date for objects produced by non-Han cultures is 1966.) The second policy aim was to strengthen government control over the export of objects designated as cultural relics by redefining the role of SACH’s cultural relics entry-exit examination and approval agencies.
Understanding the revised US regulations
To implement the MOU, the United States has to reflect the terms of the agreement in its own laws and regulations. In the case of the import of Chinese art or other objects that may be considered archeological items into the United States, the binding law is found in the revised CBP regulations, which set forth guidelines and restrictions that apply to imports of Chinese archeological materials, as defined by the regulations and the designated materials list. US Customs requires importers of such material to provide any one of the following three documents:
- An official PRC document that certifies that the export did not violate PRC laws;
- Satisfactory evidence that the object was exported from China at least 10 years prior to the date of import into the United States; or
- Satisfactory evidence that the object was outside of China—sometimes referred to as being “in free circulation”—on or before January 16, 2009.
Though the last two categories will not be different unless the import restrictions continue past January 17, 2019, they require exporters to provide different evidence. To support the assertion that the object was exported from China at least 10 years prior to the date of import into the United States, the importer must declare this fact under oath. The importer must also state that he or she did not contract for or acquire an interest in the object more than one year before the date of entry. Finally, the importer must provide a statement from the consignor, or the person who sold the object to the importer, verifying the date the object was exported from China. If the date of export is unknown, the consignor or seller must state his or her belief that the export date was 10 years before the date of import into the United States and the reasons for that belief. To support the assertion that the object was outside China on or before January 16, 2009, the importer must state under oath that, to the best of his or her knowledge, the material was exported from China prior to January 16, 2009 and provide a statement from the consignor or person who sold the material to the importer verifying this date. If the date of export is unknown, the consignor or seller must state his or her belief that the export date was on or before January 16, 2009 and the reasons for that belief.
Experienced importers of art and antiques into the United States are likely to be familiar with these requirements and with the typical form of such declarations and statements. US Customs officials have had similar requirements for imports from other countries for many years. The MOU and revised CBP regulations raise a new issue, however: Objects exported from China after January 16, 2009 require documentation certifying that such objects were not exported in violation of PRC law. To understand precisely what constitutes “legal export” from China, importers and exporters must look to PRC laws and regulations.
The twists and turns of PRC export procedure
Article 50 of China’s Cultural Relics Law permits a foreign citizen to obtain Chinese art through many channels, such as inheritance, receipt as a gift, purchase from a cultural-relics store or auction house, and mutual exchange or transfer between individual citizens. The Cultural Relics Law imposes strict restrictions on the export of Chinese art, however, and enforces these restrictions through the export permit system. Under this system, any work of art leaving China must be accompanied by an export permit issued by a SACH entry-exit agency. At present, agencies in 14 cities and provinces are qualified to examine and approve the export of cultural relics from China: Anhui, Beijing, Fujian, Guangdong, Hebei, Henan, Hubei, Jiangsu, Shaanxi, Shandong, Shanghai, Tianjin, Yunnan, and Zhejiang. For an exporter to obtain permission for export, objects must be examined by one of these agencies or one of the agencies’ qualified examiners.
A copy of the export permit constitutes “satisfactory evidence” that the object was legally exported from China. Because PRC law requires no other documentation for the legal export of an art object (excluding contemporary art), US Customs cannot require any other document from the importer to show legal export, according to the language of the MOU and the revised CBP regulations.
Buyers of contemporary art, however, should be aware of a new set of PRC regulations issued in August 2009 that imposes different procedures and documentation requirements for the export of contemporary art. The Interim Provisions on the Management of the Import and Export of Fine Art require prior MOC approval for import and export of contemporary artwork, including paintings, photographs, and sculptures but excluding mass-produced art. Buyers can obtain such approval by following the application procedures outlined in the interim provisions, which establish regulatory procedures at the provincial level of MOC rather than SACH.
Export permits: The elusive third copy
Before the 2009 MOU, US Customs did not require the presentation of export permits to import most Chinese art into the United States, so buyers did not request—and shippers did not usually provide—copies of the export permit. Instead, foreign buyers of Chinese art typically relied on a shipping invoice printed on a PRC shipping company’s letterhead or a wax seal from SACH as evidence of legal export. Under PRC law, SACH must issue an export permit before objects designated as archeological materials and cultural relics may be exported legally. Now, according to the revised CBP regulations, the importer may provide a copy of that permit to US Customs as proof of legal export. The permit is issued in triplicate: One copy remains with the SACH entry-exit agency; another goes to the exporter; and one is given to PRC Customs at the time of export.
Because most foreign buyers use a PRC shipping company to handle the logistics of freight forwarding, shipping, and customs clearance when exporting art, the shipping company—rather than the individual buyer—is regarded as the legal exporter of the object under PRC Customs and SACH regulations. The shipping company therefore must retain the third copy of the export permit for presentation to PRC customs, making it almost impossible for the foreign buyer to obtain a copy of the permit to present to US Customs.
Buyers cannot request a fourth copy of the export permit from SACH, as no fourth copy exists, and in practice will likely find it difficult to obtain a copy of the permit from the PRC shipping company. Shipping companies usually apply for export permits on a bulk, crate, or container basis, and most shipping companies lack computerized systems that enable them to collate a single object with a specific export permit. As a result, even if shipping companies were willing to provide an additional copy of the permit to the buyer, the provided document would not reference a specific brushpot, oil painting, or ceramic vase.
Single-item export permit—a possible solution?
The MOU and revised CBP regulations raise several issues of concern for US-based importers. Because China has not signed similar agreements with other major Chinese-art importing countries—such as Japan, Singapore, Taiwan, or any European countries—Americans who wish to purchase and bring Chinese art into the United States are at a disadvantage relative to buyers from those countries. In addition, buyers who want to bring Chinese art into the United States (either directly from China or via another country) may be put off by the complexity of the new regulations or the uncertainty about what documentation will assure legal and problem-free export and import.
Though PRC shipping companies still follow the historical standard practices for export permit applications, some shipping companies may be willing to apply for single-item export permits at the exporter’s request. Given that SACH has not yet established a system for US buyers who are not also the direct exporters to obtain a copy of the export permit for US Customs, buyers should work directly with their shippers to obtain a copy of a single-item export permit that clearly identifies the object being exported whenever possible.
Temporary Import and Export of Chinese Art
Different procedures and documents are required for the temporary import of art objects into China and the re-export of those objects. If an individual wishes to bring an object into China temporarily—for example, to put into auction—that person must complete a Temporary Import Registration Form (linshi jinjing wenwu dengjibiao). This form is used only for objects that are brought into China by hand and not for objects that are shipped. Temporary Import Registration is valid for six months and, in principle, objects that remain in China for longer than six months require normal import permits, though the PRC State Administration of Cultural Heritage (SACH) may grant extensions for temporary import certificates on a case-by-case basis. Experienced PRC buyers and other importers, such as auction houses, recommend that overseas sellers personally carry in the objects they would like to sell in China and handle the import paperwork on the ground once they have arrived—a solution that is not particularly helpful to sellers of large or heavy objects or to non-Chinese speakers. The Temporary Import Registration Form must be provided to SACH when applying for an export permit when the object—whether or not it is sold at auction—is re-exported.
—Nancy M. Murphy[/box]
The Asterisk Paradox
In most PRC auction catalogues an asterisk normally indicates that the marked lot may not be exported out of China. Lack of an asterisk, however, does not necessarily indicate that an object may be exported. The asterisk is applied on the basis of a per-auction review by the PRC State Administration of Cultural Heritage (SACH). SACH’s realization that sellers were buying objects and profiting based on the asterisk system, which provided a de facto appraisal of the artwork by SACH, is the explanation for this inconsistent practice.
Attempts by a potential buyer to clarify, prior to auction, whether a non-asterisked lot is eligible for an export permit have proven futile. One auction house informed a would-be buyer that the bureaucrats who vet the sale and decide which lots to mark with an asterisk are different from the bureaucrats responsible for issuing export permits, and there is no channel through which to obtain official advice on an export permit until an object is presented to the SACH entry-exit agency with a formal application for export. Auction houses will not—and probably cannot—submit a request for such advice before the lot in question has been sold.
An object imported for auction under a Temporary Import Certificate that is unsold can be exported within six months—or longer if an extension is granted—of the date that the Temporary Import Certificate was issued (see Box above). Objects that do not have a Temporary Import Certificate must follow normal export procedures. In such cases, there is always a risk that SACH will not grant export permission for the object.
—Nancy M. Murphy[/box]
[author]Nancy Murphy is senior partner at the law firm of Jincheng Tongda & Neal (JT&N) in Beijing and author of the China Art Law newsletter. Henry Hui Cao, associate at JT&N, assisted on this article.[/author]