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Immunity from Seizure for Cultural Objects on Loan - Discussion Paper 2011IntroductionDiscussion paperCurrently Australia does not have comprehensive immunity from seizure legislation in place whichprotects objects from seizure whilst on loan to collecting institutions. The Commonwealth, with thecooperation of the states and territories, is currently investigating this issue to gain a wider perspectiveon the impact a lack of this type of legislation is having, or is likely to have, in the Australian context.The purpose of this discussion paper is to encourage submissions which will inform any future policyconsideration of this issue.For the purposes of this discussion paper a series of policy questions have been developed, followedby a separate hypothetical model which outlines one possibility for the operation of immunity fromseizure in Australia. These should be viewed separately for the purpose of making any submission onthe matter and are not intended to propose a plan for implementation by the Australian Governmentbut rather generate input during this consultation period which can be used to inform future directionon the issue.Immunity from seizure for cultural objects on loanImmunity from seizure for cultural objects on loan (hereafter ‘immunity from seizure’) broadly meansproviding protection against potential claims on cultural heritage objects lent by an international ordomestic collection to cultural agencies, including, but not limited to, museums, galleries, libraries andarchives (hereafter ‘collecting institutions’), for the duration of the loan. It is essentially a guaranteethat objects on temporary loan from another country will be protected against seizure, and, in somecases, suit (defined as any legal proceedings brought to a court of law), during the period of the loan.Benefits of immunity from seizure when implemented in other countries have included:• reducing the risk involved in cross–border loans for collecting institutions;• providing surety for the lender and allowing mobility of collections between collectinginstitutions for the publicly beneficial exhibition of significant objects;• allowing lending procedures to become streamlined and more transparent;• improving the due diligence of borrowing institutions which are required to meet particularstandards in order to gain access to immunity provisions.There are three main scenarios in which the seizure of objects on loan becomes a risk:1. A government, company or individual lays claim to the ownership of an object, and bringslegal proceedings to have their ownership recognised and/or to take possession of theobject.2. Where the object or objects are seized as part of the enforcement of a judgment againstthe owner (where the owner is in debt, or as part of divorce proceedings for example).These types of claims can be unrelated to title or provenance, with the object being treatedsimply as property of some value.3. Where the object or objects are seized as part of a criminal investigation (includingproceeds of crime, etc).4
Immunity from Seizure for Cultural Objects on Loan - Discussion Paper 2011Immunity from Seizure in the Australian ContextThe Australian Government is aware that Australia’s current lack of comprehensive immunity fromseizure legislation is a matter of growing concern in the collecting sector. The issue has been raisedwith the Australian Government by a number of collecting institutions and professional bodies acrossAustralia over the past 18 months. Feedback from Australian collecting institutions has suggested thatthey are experiencing increasing reluctance by overseas institutions and individuals to lend objectsfor exhibition in Australia, due to concerns about their potential seizure by third party claimants. Suchclaims may relate to objects that are nationally significant and could trigger attempts to have themremain permanently in Australia or to foreign culturally significant objects that may be claimed to havebeen illegally acquired from their original owners, illegally exported from their country of origin orclaimed as part of an unrelated legal dispute (or judgment against the owner in a foreign court) withthe current owner, the lending institution or the country in which the lending institution is located.To respond to the concerns of lenders, some Australian collecting institutions offer ‘letters of comfort’which outline the Australian legislative framework applicable to objects on loan. However, feedbackfrom the collecting sector suggests that lenders are increasingly finding these insufficient, and areasking for immunity guarantees, as well as raising questions about the limitations of the protectionsoffered by existing provisions.Current legislative frameworkAustralia’s existing legislative measures offering protection from seizure apply only in specific andlimited circumstances. These are established by the Protection of Movable Cultural Heritage Act 1986(Cth) (PMCH Act), and the Foreign States Immunities Act 1985. Summaries of these measures can befound at Appendix A.Impact on loansThe galleries, libraries, archives and museums sector has argued that the absence of comprehensiveimmunity legislation in Australia is hampering the capacity of Australian institutions to compete forloans when such legislation exists in a growing number of other countries.The Australian Government has been provided with several instances in which the request for the loanof a particular object or work has been refused due to Australia’s lack of immunity provisions, or whereexpected works have not been received by a borrowing institution due to the lenderwithdrawing the loan at the last minute. In recent years, the request for the provision of immunityprotection by overseas lenders has increased significantly, with many Australian collecting institutionsfinding it increasingly difficult to seek and proceed with loans.5
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