Three years ago, Ramon Cernuda, a Miami publisher of language texts, received some unannounced visitors. Federal agents broke down his door and seized his valuable collection of 200 Cuban paintings on the grounds that it violated U.S. trade embargo laws against Cuba. Cernuda had to sue the government to get his property back even though he had purchased all the paintings outside of Cuba. This "shows the danger of collecting art from politically sensitive countries," he says.
Art collecting holds other dangers as well. Innocent purchases made during a vacation abroad, for example, may cause the unsuspecting buyer to face fines or even imprisonment for violating a country's export laws. That expensive little statue you bought for the coffee table could turn out to be a fake--or worse, stolen. The laws governing art purchases are enormously complex, varying from country to country, state to state, and object to object. Nevertheless, amateur collectors should try to familiarize themselves with some basics to avoid stepping on legal land mines.
Big problems can arise from buying art abroad. Most countries have "cultural patrimony laws," which prohibit or restrict export of works with special historical, archaeological, or ethnological value, such as artifacts buried in ancient tombs. Turkey and Peru "claim title and ownership of all antiquities originating in [those countries] regardless of importance," says Ralph Lerner, co-author of Art Law: The Guide for Collectors, Investors, Dealers, & Artists (PLI: Practicing Law Institute; $85). On the other hand, Denmark and Britain will pay owners market value for an artwork if they ban its export. And once Chinese art is outside the country, "there's no indication that someone is going to chase it down," says James Lally, a New York City gallery owner who deals in Asian art.
"CRAZY GRINGOS." If a restricted item gets past local customs, it usually can enter the U.S., which has no obligation to enforce other countries' export laws. But there are exceptions. The U.S. Information Agency, in cooperation with U.S. Customs, bars importation of certain stolen artworks for which records exist. And in response to cries that Latin American archaeological sites were being looted, the U.S. agreed to ban imports of pre-Columbian art. Although this has cut down the pre-Columbian traffic in the U.S., says Connie Lowenthal, executive director of the International Foundation for Art Research (IFAR), "dealers complain that the trade has gone to Europe, so it may not have stopped the plunder."
Pillaging of ancient sites is a worldwide problem. Archaeologists claim that collectors encourage plunder when they pay big money for artifacts. Collectors answer that they protect art that might otherwise be destroyed. "A farmer digging a well comes across an ancient tomb," says gallery owner Andr Emmerich. "If he goes to the authorities, they'll probably bar him from making his well. So he's likely to destroy what's there first. But if he knows crazy gringos in the capital pay money for it, it will get sold, preserved, and endowed with monetary value."
The pillage problem is exacerbated by the fact that countries with the most artifacts often have the least resources to protect them and the greatest need for the cash their sale will bring. In addition, "enforcement is very difficult and violation completely easy," says fine-art attorney Susan Duke Biederman. The U.S. has no patrimony laws per se, but it is illegal to remove archaeological artifacts from federal lands. In March, four people in Utah were indicted for unearthing and taking the remains of Native American infants, one of whom lived about 1,250 years ago and was still wrapped in a hide blanket and lying on a wooden cradle board.
If you do buy art abroad, make sure you know that country's stand on cultural property and art exports. Contact the nation's department of cultural affairs or the American embassy to find out what documentation you might need. You may want to consult an art lawyer or make the purchase through a reputable dealer in the U.S. so you'll have a representative at home who's accountable. Make sure the U.S. has no special import restrictions, as it does on Cuban and Iranian art, says Marjorie Stone, general counsel for Sotheby's auction house. "If you bought an Iranian rug in London, you couldn't bring it home unless you could prove it left Iran before the U.S. embargo went into effect."
PROVENANCE PERILS. If stolen artworks or antiquities subject to cultural-patrimony laws show up in U.S. galleries and exhibitions, foreign governments and individuals can sue to get them back. So if you don't have clear title to a significant work, you could get tied up in costly litigation and eventually lose the art to its rightful owner. Worse, "if you bought stolen art knowingly, you could go to jail," says Lerner. Statutes of limitation vary widely, sometimes starting only after the theft victim has sued and the current owner has refused to give up the art. This may be decades after it disappeared.
To protect yourself, ask lots of questions about the art's provenance, or ownership history, and request documentation of its sale and background. If the seller is reluctant to furnish such information, that could be a warning. Check with local police, Interpol, the FBI, and IFAR, which all keep records of stolen art. For a famous artist, visit your local library and consult the catalogue raisonn , which gives a complete background on the person's works, their history of mwnership, and the exhibitions they have appeared in.
It's far more likely that you'll buy a fake than a stolen treasure, says art consultant Catherine Drillis. So be wary "if someone offers you a great bargain. It is too good to be true." Drillis says she examined a hoard of paintings by big-name Impressionists offered to a client for several million dollars. She declared it a scam. "It was enough to fill a small museum, and they weren't asking a huge sum," says Drillis. "Plus they wanted to do it quietly. Why would anyone do that? They would want to get the most they could by going through an auction or dealer."
Fakes go for all prices. Thousands of counterfeit Dali, Picasso, Chagall, Miro, and Erte "limited edition" prints were sold nationwide through galleries, over the phone, and via the mails throughout the 1980s. Prices varied from a few hundred dollars to tens of thousands. A sting operation led to criminal charges against a family named Amiel that allegedly supplied the fakes from an Island Park (N.Y.) warehouse--along with false certificates of authenticity to validate the bogus items.
BONING UP. Jack Ellis, the postal inspector who helped break the case, warns casual collectors not to buy anything sight unseen. If you do, "you should have it sent to you on approval so you can check it out with some expert whom you trust." If you discover that you've bought a fake, complain to the Federal Trade Commission. "Several laws allow them to go in when something is counterfeit," says Ellis. Criminal mail- and wire-fraud statutes can also be applied to any scheme in which someone is defrauded by misrepresentations transmitted by phone, fax, or mail, he says.
Auction houses and museums can give you a free opinion on an item's authenticity, and IFAR will do a thorough report, including a consultation with an appropriate expert, for a minimum of $750. Another way to protect yourself is to read up on the area that interests you. "Find a dealer you enjoy talking to and pick his or her brain," says Lally. "Go to auction rooms, where you can handle the pieces, and ask every silly question that comes into your head."
In the end, there are no guarantees. "My advice is the same as with the stock market," says Biederman. If you buy a work of art, "make sure you can afford to lose the money." At the least, make sure that you like it--and that it fits the decor.
IF YOU GOTTA HAVE ART... ...Find out if it's real... --Research the type of art you wish to invest in. Keep it narrow. --Read books, consult knowledgeable art dealers. --Visit auction houses to inspect samples of the kind of art you're interested in. --If you don't have time to do the research, hire an art consultant or lawyer to do it for you. --Get an evaluation of an art object from a museum or auction house. --Buy only from reputable dealers, who have a track record and have been around for a while. --Get a certificate of authenticity and a bill. ...Or if it's stolen... --Ask where the art object comes from, who has owned it in the past. --Request proof, including past bills of sale. --For famous artists, check your local library for a catalogue raisonn , the definitive source on a person's complete works, history of ownership, and exhibitions they have appeared in. --Check with the International Foundation for Art Research, interpol, the FBI, and any other registry that keeps tabs on stolen art. --Don't spend thousands of dollars without consulting an art lawyer. ...Or illegal to take --If you're in a foreign country, find out what the export laws are for artworks. This may not be easy, but the American embassy should be able to help. --Find out a given country's restriction on cultural patrimony. --Obtain the appropriate documentation to export an art object from the country. --Find out if the U.S. has any special arrangements with the country enforcing its export laws here. --In the U.S., ask if Native American artifacts come from public lands and check with the Bureau of Land Management before you buy. DATA: BUSINESS WEEK