Dutch Heritage Act: What does the advice of the Pechtold Committee mean for collectors, art dealers and foundations?

Publication date: 3 October 2019
In its report the Committee for the Protection of Cultural Property advises to make a better inventory of privately owned cultural heritage and to ensure that there is sufficient money in the purchasing fund when Dutch national cultural property has to be bought. The report finds that it is also necessary to check whether already designated objects should remain protected. The Committee recommends that owners of protected cultural heritage should be compensated for the costs they incur and that the procedure in the event of sales abroad should be streamlined

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In its report the Advisory Committee for the Protection of Cultural Property advises to

  • (1) Make a better inventory of privately owned cultural heritage
  • (2) Ensure that there is sufficient money in the purchasing fund when Dutch national cultural property has to be bought

The report finds that it is also necessary to check whether already designated objects should remain protected. The Committee recommends that owners of protected cultural heritage should be compensated for the costs they incur and that the procedure in the event of sales abroad should be streamlined.

The Heritage Act and its predecessor, the Cultural Heritage Protection Act, have been a focus of Russell Advocaten for decades, and a number of important procedures have arisen from these Acts.

Pechtold Committee

In the beginning of 2019, the recently deceased princess Christina sold a drawing by Rubens at Sotheby’s New York for $ 7m. The commotion about this sale put the protection of privately owned cultural heritage on the political agenda in the Netherlands.

How can individuals be prevented from selling important cultural property abroad? What are the rules? What are the problems and how can they be solved? These were the questions the committee headed by former minister Pechtold had to answer.

Designation of protected cultural heritage

The most important instrument for the government is to protect objects and collections with the cultural heritage designation. Designated objects may no longer be sold, loaned or even moved without the prior consent of the government.

Up until now, 723 collections and objects have been registered. The list of protected heritage mainly consists of the former list under the Cultural Heritage Protection Act from 1984 and, according to the committee, is mainly a combination of hobby and lobby of its former compilers. An example of this is museum directors who placed the loans in their collection on the first list. A remedy against the lending of privately owned art to museums.

Although the list is currently more or less static, the Minister can also designate an object at short notice and thus make it impossible to sell it to foreign buyers, which is referred to as “urgency procedure”. The broad definition of the criteria for designation means that it is often uncertain whether the Minister will proceed with this measure. This uncertainty has negative consequences for both collectors and art dealers and Russell Advocaten has been giving (legal) advice on that for decades.

No insight in privately owned cultural property

The Pechtold Committee finds that there is hardly insight in what cultural property is privately owned. In addition, the list of designated objects is not very dynamic, while the views about what constitutes cultural heritage are changing. That is why it is not possible to check whether important objects are being sold.

The committee recommends to continue to make an inventory of cultural heritage and to establish clearer criteria for the designation of objects. In addition, a standing committee should be set up to advise the Minister on the designation of objects as cultural heritage.

The dynamic nature character of cultural heritage also means that it is necessary to check whether existing objects have been designated correctly. This deletion option was already included in the old Act, due to the efforts of Russell Advocaten. As a result of numerous proceedings conducted by us, we forced an evaluation of the Cultural Heritage Protection Act in 1998. However, so far the deletion option has remained a dead letter, simply because the Ministry did not apply it.

Compensation of owners

Compensation during ownership

The designation of an object as protected cultural heritage has great (financial) consequences for the owners. They can no longer sell or even move the object without consent by the government. Foreign buyers will be reluctant to make an offer as it contravenes the preferential rights of the Dutch State. Therefore, the Pechtold Committee advises to grant the owners compensation for the security and insurance costs they incur. In addition, there should be tax incentives in the event of inheritance.

Compensation in case of sale

In addition, the committee proposes that the procedure for intended sales abroad be changed to the detriment of the owners. Unlike the government, potential buyers now have six weeks to make an offer so that a work of art can remain in the Netherlands. This period should be extended according to the advice.

At the end of the current six weeks, the State is obliged to make its own bid for an item on the list. If the seller and the State do not reach an agreement, it is for the court to determine the price. For the determination of the price, a protocol must be drawn up which takes explicit account of price trends on the international art market.

National Acquisition Fund

The State finances the purchase of protected Dutch cultural heritage from the National Acquisition Fund. This fund must contain sufficient money structurally – but this is not the case – otherwise the State will not be able to pay the international market price for works of art that will otherwise be exported. In the event of a refusal to pay the market price, the State’s objections lapse, as was the case in proceedings Russell Advocaten conducted about a painting by Cézanne from the Koenigs collection. Therefore the fund must get a legal foundation including a minimum amount for purchases, which is structurally replenished by the Minister.

More information

Would you like to learn more about the Cultural Heritage Act and/or the report of the Pechtold Committee and the consequences for your collection? Or do you have any questions about selling art to foreign buyers? Please contact us via the form below or send an email to Paul W.L. Russell, LL.M. (paul.russell@russell.nl) or Reinier W.L. Russell, LL.M. (reinier.russell@russell.nl):

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