Did Brexit Make it Easier to Import Illegal Art and Antiquities into the UK?
After Britain left the European Union in January 2020, there have been numerous questions surrounding the future of various trades, including art and antiquities. With the art world still reeling from the effects of COVID-19, the future of art post-Brexit seems like another obstacle to normalcy.
On 30 December 2020, the House of Commons passed the European Union (Future Relationship) Act 2020, which contained significant implications for the art market between the UK and EU. The first impact falls on the UK with goods imported into the UK from the EU facing a series of import duties including “pro-forma invoices, customs entries and commodity codes”. The elimination of pre-Brexit norms of free circulation of art between the EU and UK means more paperwork and art dealers on both sides face a longer time period for transporting art across the border. However, export licenses for art leaving the UK have increased, meaning art below the threshold is free to travel without a license.
Before Brexit, the UK experienced relatively lenient import laws compared to the EU. Value-added taxes, or VATS, were lower than the EU’s if applied. Additionally, art could be shuttled into the UK and easily brought into the EU with scant paperwork. In other words, sending art to an EU country with a high VAT could be funneled through the UK, where the VAT was five percent. Now, after Brexit, the buyer or seller would have to pay the EU country’s VAT instead of the UK’s previously lower VAT. Other countries like France have a relatively low VAT at 5.5 percent, possibly etching out the possibility of the UK losing its low VAT advantage. As for the effect on auction houses, only time will tell. For London, which boasts one of the largest art markets both in Europe and internationally, the new Brexit trade-offs could prove detrimental or beneficial.
As for other areas of the agreement, UK e-commerce sales will have to conform to the rules of the country that the consumer is buying in including: “privacy, data collection, return policies, or disclosures”. Prior to Brexit, the consumer’s country played no role, with only UK laws covering the purchase. The repercussions of this change will be seen in the years to come.
Despite this, gaps in the new trade agreement are present in the import of cultural goods. For antiquities over 250 years old, classified as “archaeological finds”, a license and proof of the legal export by the exporting country will need to be shown at the UK border. However, for art and antiquities that are younger than 250 years old, only an importer statement is necessary, meaning that works worth millions of pounds can travel freely, whereas “archeological finds” will need an array of paperwork.
The EU’s regulations on cultural goods is one of the most pressing topics facing post-Brexit UK. In April 2019, the EU passed a set of rules detailing the import of art and antiquities from outside Europe, a different set of rules from the agreement previously mentioned. After Brexit, the question became whether the UK would continue to adopt these rules. With the aim of curbing “the illegal trafficking of cultural goods”, these regulations came at a time when terrorist organisations received funding from such illicit trade. The law requires that importers receive a special license that displays proof that the goods were legally exported from the country of origin. At the same time, the law allowed EU officials to confiscate, with any necessary measure, goods that did not have proper documentation.
In addition, in 2018 the EU implemented AMLD5, a directive that shows the EU’s stringent approach to anti-money laundering (AML) legislation. The directive discusses “virtual currencies, high-risk third-party countries, identification of beneficial ownership and the harmonisation of national ownership registers across borders". While the directive, along with its AMLD6 counterpart are being implemented across the EU, AMLD5 was issued into UK law and became active in January 2020. British art markets are working to comply with this new anti-money laundering legislation but many experts wonder whether a post-Brexit UK will continue AML discussions with the EU. Currently, the UK is known as “‘the money laundering capital of the world’” because of loose AML enforcement. The question of whether the UK will continue to collaborate with the EU on future AML-related issues is therefore debatable.
After Brexit, the UK is becoming a more attractive ground for importing illicit cultural goods. The regulations implemented in the EU are not being transferred and enforced in the UK - a positive development for UK art dealers. Coupled with the European Union (Future Relationship) Act 2020 mentioned earlier, UK dealers and auction houses will not have to follow certain levels of due diligence. This has already been reflected in their decision not to continue with the set of rules from 2019 and the AMLD5 legislation in 2018. The future of the art and antiquities trade in and out of the UK is uncertain but many experts are hesitant about the government’s approach given the relaxed implementation of the Anti-Money Laundering Directives.