Artist Resale Royalties
The burgeoning secondary arts market has suddenly mushroomed since Covid 19, with an increasing number of auctions turning over millions of dollars’ worth of sales. In one week alone there can be three art auctions taking place, from iconic art works by significant Aotearoa NZ artists to works accessible to new collectors. Many of the artists whose works sell well at auction, are still living and most are still practising, and the fact is that none of the funds from sales accrues to the artists whose work is being sold.
WHAT IS THE VISUAL ARTISTS RESALE ROYALTIES SCHEME?
Visual artists are entitled to a royalty payment each time an original artwork is resold on the secondary art market. The scheme is also referred to as Droit de suite (French for "right to follow") where it originated. The scheme mirrors the royalties received by other artists, including composers and writers, when their work is reprinted or used in radio, television or film.
Artists Resale Royalties first became law in 1920 in France and to date around 80 countries have such a right. Droit de suite was created in France following the sale of Jean-Francois Millet's 1858 painting, the Angélus, in 1889 at the art collection sale of Eugène Secrétan, a French copper industrialist. The owner of the painting made a huge profit from this sale, whereas the family of the artist lived in poverty. Many artists, and their families, had suffered from the war, and droit de suite was a means to remedy socially difficult situations.
THE NEW ZEALAND STORY:
It is now 13 years since the Ministry of Culture and Heritage (MCH) produced a discussion paper on Artists Resale Royalties. When first surveyed in NZ in 2007, 65% of respondents supported the plan.
Artist Resale Royalties were introduced to Parliament as the Copyright (Artists’ Resale Right) Amendment Bill in May 2008. It stated artists will receive a 5% royalty payment on sales of NZD $500 or more, each time an original artwork is commercially sold through an auction house, gallery or professional dealer. Resale royalties on artworks will be due throughout the artist’s lifetime plus 50 years after the artist’s death. In March 2009, the Government Committee reported that the Copyright (Artists’ Resale Right) Amendment Bill was not passed. The issue of Resale Royalties for artists eventually disappeared. Since 2007, an additional 20 countries have introduced resale royalties.
WHAT DOES AN ARTISTS RESALE ROYALTIES SCHEME ENTAIL?
In NZ the paper produced by the Ministry of Culture and Heritage in 2007 included some of the following proposals:
- Royalty obligations would extend to all auction houses, galleries, dealers and any other intermediary involved in the business of dealing in works of art.
- There would be joint liability for payment of a resale royalty between the art market intermediary involved in the sale and the seller.
- Work purchased directly from an artist would be exempt from a resale royalty on the first resale of that work, provided that resale occurred within three years of the first sale and provided the work was resold for less than a certain amount.
- There would be a flat 5% resale royalty rate. This would be charged on the “hammer” or ticket” price (that is, excluding GST, a buyer’s premium and an agent’s commission).
- A resale royalty right would apply to the creator of an artwork in which a copyright existed. This would be regardless of whether the creator had retained ownership of the copyright.
- A resale royalty right would be inalienable and unable to be waived or reassigned. This would prevent a change of resale royalty right ownership becoming a condition of any first sale.
- In line with the World Trade Organisation’s Agreement on Trade Related Aspects of Intellectual Property Rights, a resale royalty right could be offered on a reciprocal basis to nationals of countries that have similar schemes and that offer reciprocal rights to nationals of New Zealand.
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