Private Dealers in Fine Irish and European Paintings

DROIT DE SUITE

Dominic Penny b.1948:
On the Vartry River, Wicklow,
Western Cloud over Summer Corn

Oil on canvas, 11 x 15 inches. Signed by the artist

Euro 3,250. This painting is for sale free of Droit de Suite.

Waiver:
All sale and resale rights under Droit de Suite have been waived by the creator of this painting.

Dominic Milmo-Penny. 2nd March 2009

We have an exceptional painting by Ernst Ludwig Kirchner for sale.

The European Union Directive on Droit de Suite (also known as Artists Resale Rights) is invalid because it binds all Member States to the social welfare systems of other Member States. Droit de Suite was first introduced in France in the 1920s as a social welfare measure to assist impoverished artists. However, under the Treaty of Rome, every Member State is entitled to its own social welfare arrangements. Apart from this, as an art dealer, I refuse to collect Droit de Suite royalties because the Directive infringes a number of fundamental rights to which I am entitled as an Irish citizen, and which are enjoyed by traders in other goods throughout Ireland and the European Union.

The Directive also infringes European Union standards under which Member States trade with each other. For example, under the 7th VAT Directive, an important principle was established whereby traders accounting under the Margin Scheme are allowed to charge VAT on the profit margin only. The Directive on Droit de Suite is an infringement of this standard because the levy is charged on the gross sale price. In very many cases, it is the expense incurred by the dealer, which raises the price of a painting above the threshold. These costs relate to framing; printing; marketing; receptions; and general overheads, and are often higher than what was paid to the artist for the painting in the first place. However, there is no allowance for these costs in the threshold calculations. Effectively, this means that a dealer becomes liable to pay a royalty to an artist as a result of his own effort and expenditure in promoting the artist, and is obliged to pay a royalty calculated on the extent of his own outlay. Furthermore, if the dealer is forced to sell at a loss, the royalty is still payable. All of this is in conflict with the basic principles of common law. For this reason Milmo-Penny Fine Art Limited claims the right to sell the work of any artist, who has signed a waiver, free of Droit de Suite. This can be in the form of an endorsement on the back of a painting or a simple waiver document as set out in the example above.

As an artist, the introduction of Droit de Suite has severely infringed a number of rights, which I have enjoyed as an Irish citizen since birth:

• The fact that the resale rights are inalienable means that my fundamental rights to private property have been infringed;
• I am entitled only to limited copyright on works that I create;
• my rights to form a contract under my own terms and conditions are fundamentally restricted;
• my testamentary rights have been severely curtailed.

Bunreacht na hÉireann, the Constitution of Ireland, enacted by the people of Ireland on the 1st July, 1937 states:
ARTICLE 43. 1. 1° The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
ARTICLE 43. 1. 2° The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.

Furthermore, Article 17 of the Charter of Fundamental Rights of the European Union states: Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions.

Droit de Suite is a gross infringement of these rights. Prior to the introduction of Droit de Suite, I enjoyed full control over the copyright of my own paintings, and paintings which I had bought. The Directive on Droit de Suite interferes with these rights as it gives an outside agency the right to collect levies on my paintings whenever they are resold. As the rights under the Directive are inalienable, this means that I am denied the right to opt out of the scheme. The Irish Government mistakenly believes that the Directive can be side-stepped by allowing artists the option of joining a collection agency or not. Brian McCabe, Intellectual Property Unit of the Department of the Enterprise, Trade and Employment states: “If an author chooses not to pursue that right, then that is a matter for the author.” That of course is as it should be. However, he is overlooking one of the terms of the Directive, which states that the rights are inalienable. This means that artists are not allowed to decide whether or not they wish to be paid a royalty. They are denied choice, and the right to decide on a fixed and final price for their work. This is entirely unacceptable in a free democracy.

Under the Treaty of Rome, every Member State of the European Union is entitled to their own law of contract. However, the rights that I have enjoyed under Irish law, prior to the introduction of Droit de Suite, have been infringed. The Directive does not allow me to form a contract for the sale of a painting, which includes free and unhindered copyright. My testamentary rights have also been infringed. Prior to the introduction of Droit de Suite, I had the right to bequeath my paintings to my heirs or to others free of any encumbrance.

Consequently, I hereby retain full copyright to my paintings, and forbid any agency whatsoever from collecting royalties or levies on my behalf on the sale or resale of my paintings.

This obnoxious Directive was forced on the European Union as a result of lobbying by a small group of extremely wealthy French families who are heirs to the fortunes of artists long dead and gone. These families were unable to collect royalties from paintings sold in London and elsewhere. Because paintings offered for sale in France were subject to the levy, many vendors opted to sell overseas. This led to a drain on the French auction houses who also lobbied for the implementation of Droit de Suite. After many years of resistance by Ireland, and a few other States, backroom deals were finally agreed and the Directive came into force.

A number of greedy Irish artists were only too delighted to promote its introduction here. Their claim is that they do not have the opportunity to collect royalties, in the same way as an author can, every time his book is reprinted. I fail to see the connection between writing a book and painting a canvas. In any event, the claim is bogus as there is nothing preventing any artist from selling printed reproductions of their works. They could also include a clause in their sale agreement, which would guarantee them a royalty every time the painting is resold. However, common sense would tell them that they might not find many buyers for their paintings if they included such ridiculous arrangements.

I call on all artists throughout the European Union and elsewhere to join with me, and offer their works for sale free of Droit de Suite. Furthermore, I see no reason why your local gallery or your local auctioneer should not sell your works free of Droit de Suite if you waive your rights. l make a simple claim to copyright on my invoices, and also on a label attached to the back of my paintings. I also issue a Droit de Suite waiver which states: "All sale and resale rights under Droit de Suite have been waived by the creator of this painting". This does not prevent me from including reproduction rights of a painting if I wish to do so, or any other terms which may be agreed with the purchaser. I use the same procedure if I am donating a painting to an institution or a charity, or if I make a gift to a private individual. I have also put my local collection agency on notice that they do not have the right to collect royalties on my behalf. However, if you are unsure about your own position, you should seek local professional advice.

If an artist wants to attach resale conditions or any other conditions to the sale or resale of their paintings, they have the right to do so. However, State imposition of inalienable rights is intolerable in a modern democracy.

Dominic Penny
Artist
Dublin, 2nd March 2009

 

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Private Dealers in Fine Irish and European Paintings
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