Resolution and Report of Committee on Legal Affairs and the Internal Market

The De Clercq ‘Report on a legal framework for free movement within the internal market of goods whose ownership is likely to be contested’, drawn up by the European Parliament’s Committee on Legal Affairs and the Internal Market, was passed in a vote of the European Parliament on 17 December 2003 with 487 in favour, 10 against and 16 abstentions:


26 November 2003

REPORT on a legal framework for free movement within the internal market of goods whose ownership is likely to be contested (2002/2114(INI))

Committee on Legal Affairs and the Internal Market

Rapporteur: Willy C.E.H. De Clercq

PROCEDURAL PAGE

At the sitting of 4 July 2002 the President of Parliament announced that the Committee on Legal Affairs and the Internal Market had been authorised to draw up an own-initiative report, pursuant to Rule 163 of the Rules of Procedure, on a legal framework for free movement within the internal market of goods whose ownership is likely to be contested.

The Committee on Legal Affairs and the Internal Market had appointed Willy C.E.H. De Clercq rapporteur at its meeting of 28 May 2002.

The committee considered the draft report at its meetings of 11 September, 4 November and 17 November 2003.

At the last meeting it adopted the motion for a resolution unanimously.
The following were present for the vote: Willi Rothley, acting chairman; Ioannis Koukiadis, vice-chairman; Willy C.E.H. De Clercq, rapporteur; Ward Beysen, Bert Doorn, Raina A. Mercedes Echerer (for Uma Maija Aaltonen), Janelly Fourtou, Fiorella Ghilardotti, Malcolm Harbour, Lord Inglewood, Klaus-Heiner Lehne, Sir Neil MacCormick, Toine Manders, Arlene McCarthy, Manuel Medina Ortega, Marcelino Oreja Arburúa (for Kurt Lechner), Elena Ornella Paciotti (for Maria Berger), Marianne L.P. Thyssen and Ian Twinn (for Joachim Wuermeling pursuant to Rule 153(2)).

The report was tabled on 26 November 2003.

MOTION FOR A EUROPEAN PARLIAMENT SOLUTION

on a legal framework for free movement within the internal market of goods whose ownership is likely to be contested
(2002/2114(INI))

The European Parliament,

– having regard to its resolutions of 14 December 1995 on the return of plundered property to Jewish communities(1) and removed from the territory of a Member State,

– having regard to Rule 163 of its Rules of Procedure, of 16 July 1998 on the restitution of property belonging to Holocaust victims(2),

– having regard to the European Convention on Offences relating to Cultural Property of 23 June 1985 and Council Directive 93/7/EEC of 15 March 1993(3) on the return of cultural objects unlawfully

– having regard to the report of the Committee on Legal Affairs and the Internal Market (A5-0408/2003),

A. whereas early moves were made following the end of the Second World War to find and return looted property to its country of origin,

B. whereas a very considerable amount of property has not been recovered by its owners or their successors,

C. whereas litigants have often been confronted with difficult problems due to conflicts of law, varying prescriptive periods and other difficulties, and that this hampers or prevents access to swift and efficient resolution of the interests of all parties affected,

D. whereas this is an important human and legal problem as victims continue to encounter legal and technical problems,

E. whereas a public hearing was held on 18 March 2003,

F. whereas this is a widespread European legal problem,

1. Welcomes the recognition among various governments that the unique problems associated with cultural goods (i.e. public or private property considered as constituting an artistic creation or cultural property) which were plundered in wartime through acts of violence, confiscation or by apparently legal transactions or auctions need to be addressed;

2. Recognises that, although the problem of these goods is a matter of public knowledge, it has often proved remarkably difficult for private claimants to recover their property and to clarify their provenance;

3. Welcomes the efforts being made by third countries (especially the United States of America and the Russian Federation) to take parallel or reciprocal action;

4. Calls on the European Commission, with due regard for Article 295 of the EC Treaty, to undertake a study by the end of 2004 on:

– establishing a common cataloguing system, to be used by both public entities and private collections of art to gather together data on the situation of looted cultural goods and the exact status of existing claims;

– developing common principles regarding access to public or private archives containing information on property identification and location and tying together existing databases of information about title to disputed properties;

– identifying common principles on how ownership or title is established, prescription, standards of proof, rights to export or import property which has been recovered;

– exploring possible dispute resolution mechanisms that avoid lengthy and uncertain judicial procedures and take into account principles of fairness and equity;

– the value of creating a cross-border coordination administrative authority to deal with disputes on title of cultural goods;

5. Calls on the Member States and applicant States to make all necessary efforts to adopt measures to ensure the creation of mechanisms which favour the return of the property referred to in this resolution and to be mindful that the return of art objects looted as part of crime against humanity to rightful claimants is a matter of general interest for the purposes of Article 1 of Protocol 1 to the European Convention of Human Rights;

6. Calls on the Presidency of the European Union to assign this issue to a working group of the Council;

7. Instructs its President to forward this resolution to the Council, the Commission, the Member States, accession States and the Council of Europe.

EXPLANATORY STATEMENT

Background: the Nature of the Problem

Various aspects of the problem of property looted during World War II have been the subject of international agreements. One issue remains outstanding: the problem of cultural goods whose ownership is likely to be contested.

The problem of looted cultural goods (i.e. public or private property considered as constituting an artistic creation or cultural property), which were plundered in wartime through acts of violence, confiscation or by apparently legal transactions or auctions, unfortunately remains part of human history even at the beginning of the twenty-first century. Such plundering occurred throughout the ages, but became more acute during the nineteenth and twentieth centuries. During World War II cultural goods were looted on a massive scale never before seen. The scale of the looting was well-documented both during and after the war, and has been recognised and accepted by all the Member States. Post-war records show that several million objects were looted, including museum quality works of art, furniture, books, religious objects and other culturally significant works. From the records of post-war claims made by survivors and their families, and by Member States it appears that thousands of major art works in circulation (including some in museum collections) have gaps in their provenance which are traceable to the World War II period in Europe (1939 – 1945). It is also acknowledged by public entities that considerable numbers of art works have been moved through the art market without any clear identification of title, and with gaps in the history of their ownership. Museums and art dealers acknowledge the need for legal certainty to clarify the provenance of their collections and acquisitions.

Although the problem of looted cultural goods is a matter of public knowledge, it has often proved remarkably difficult for private claimants to recover their property. One reason for this is that many European nations have chosen to ignore international law regarding the status of this property, and permit a thief (or those in the chain of possession from the thief) to pass valid title to buyers under national law. In addition, looted cultural goods cases often become enmeshed in complex issues of choice of law and statutes of limitation, based on where the art was looted, where it has been over time or where it was found. Finally, claimants have faced significant hurdles in researching their claims, due to varying standards of archival access over Europe.

Immediately after World War II, various national laws dealing specifically with looted property were adopted, many of which were then allowed to lapse. The subject returned to the forefront of public attention when the Berlin Wall fell and archives in Eastern Europe and Russia were opened. Many private organisations began to work actively on the issue of looted cultural goods, and various national commissions and working groups were established to scrutinise archives, enquire into the provenance of works of art and, in some cases, examine individual requests for restitution.

Unfortunately, it is generally acknowledged that the problem of looted art in Europe did not end in 1945. By way of example, the Commission on Real Property Claims in Bosnia-Herzegovina has recognised claims for loss of property in connection with the recent Serbian ’ethnic cleansing’ campaign in Bosnia. Sadly, similar claims are almost certain to arise from future conflicts.

Current State of Play

The Nazi regime was responsible for looting vast amounts of valuable cultural goods, not only in Germany, but also in every country which was allied with or occupied by that regime, including Austria, Belgium, Czechoslovakia, France, Hungary, Italy, Luxembourg, the Netherlands, Norway, Poland, Romania and the former Soviet Republics occupied by Nazi forces (the Baltic Republics, Russia, Ukraine and Belarus). Under international law, this looting was illegal. During the war the United Nations made it clear that looted property recovered by States was to be restored to its nation of origin for return to its original owner. This looted property was then granted special status by the Nuremberg Tribunal, which expressly ruled that under Article 6(b) of the Nuremberg Charter, the looting of private property during the war could constitute a crime under international law. In its final judgment, the Tribunal specifically ruled that certain looting conducted after September 1, 1939 was a crime against humanity.(4) (The panel did not excuse looting from Jews before that date, finding only that it was not a war crime. Germany itself recognised the earlier looting as illegal in various post-war treaties). Numerous post-war treaties also recognised that States had a duty to recover looted property, notwithstanding transfers to seemingly innocent purchasers, and a duty to care for and maintain that property pending return to the nation of origin. Thus, under international law, States became custodians for looted property, not owners of it.

National laws adopted after the war in Switzerland, Belgium, France, Germany, Greece, Italy and the Netherlands recognised this concept, creating a presumption in favour of the original owner of property looted during this period. Today, however, the majority of these national laws have lapsed or expired owing to statutes of limitations, and there is no international convention applicable to the World War II period. Given that the problem is recognised, States are still seeking legal instruments to harmonise discrepancies in national laws. At institutional level, the Parliamentary Assembly of the Council of Europe has adopted a Resolution on Looted Jewish Cultural Property(5). In addition to these rules, on the occasion of a diplomatic conference in Washington on Holocaust Era Assets on 3 December 1998, 44 States including all EU Member States adopted ’non-binding’ principles and morally undertook to return looted cultural goods. The participating States recognised the mass of looted cultural goods still in circulation and enacted eleven recommendations by which they agreed to (i) take all measures to identify and distribute a list of works of art of doubtful origin, (ii) develop mechanisms allowing the resolution of ownership issues and taking into account the difficulties claimants often have to establish their title, and (iii) ease the requirements regarding the burden of proof faced by claimants seeking return of looted property. The follow-up October 2000 Vilnius International Forum on Holocaust Era Looted Cultural Assets aimed at bringing the Washington principles and the Council of Europe Resolution into effect(6). Some EU Member States and third countries such as Russia(7) have recently adopted measures for victims of looted art, for example examination of recovery claims(8), relaxation of the rules of tort and property law, such as limitation periods, and the establishment of Parliamentary Commissions to study this subject.

At European level, Directive 93/7/EEC of 15 March 1993 addressed the return of cultural objects unlawfully removed from the territory of a Member State. This Directive aimed to establish cooperation between Member States and create mutual recognition of the relevant national laws in the field of cultural national treasures. However, it did not establish a level playing field for individual claims, which must still rely on extremely varied national legal requirements. The Parliament has subsequently adopted two resolutions on the issue of looted cultural goods, one in 1995(9) on the return of plundered property to Jewish communities and the other, on the restitution of property belonging to Holocaust victims, in 1998(10). Thus the European Union has rightly taken steps to recognise the historical fact of art-looting between 1933 and 1945, but it has not yet established a comprehensive framework to resolve the remaining legal problems arising from looted art, which have an effect on the freedom of circulation of all works of art in the Internal Market.

Need for EU Action on a European Legal Problem

The legal situation in this area is at present entirely unclear, so that museums, art dealers, victims and heirs have been unable to recover looted goods or fill the gap in provenance of art ownership. Claimants face a bewildering array of legal problems, many driven by the sheer accident of where looted property happens to be found. Access to data varies from nation to nation, as do the legal standards regarding such fundamental issues as determining the applicable law, proving ownership, assessing when a claim must be brought and the effect of intervening transfers to allegedly innocent transferees. There is a need for a legal and institutional framework that will be fairer to claimants, current holders and state-owned and not-for-profit entities. Moreover, this is very much a European problem which requires a European solution, and the forthcoming enlargement of the European Union makes the issue still more important as it directly affects a number of candidate Member States.

Around 170 claims are currently pending in courts all over Europe, including Russia. All face the same legal problems: establishing the origin of a cultural good, assessing how to account for the legal gap in ownership between 1933 and 1945, defining the applicable jurisdiction, deciding who may be a ’good faith’ purchaser and what that purchaser’s rights may be, determining if any limitations period should apply etc. Moreover, differences between civil and common law in the Member States lead to different results and cause endless litigation and a legal morass for victims and heirs to looted cultural goods. While some of these problems may appear to be cultural, the aim of a European legal and institutional framework on looted cultural goods must be to find a legal solution to decidedly legal problems, rather than allowing this to become a cultural problem.

There is no doubt that this is a legal problem. Firstly, the systematic and discriminatory plunder of property by totalitarian regimes was and remains a serious violation of the human right, recognised by the ECHR and the Charter of Fundamental Rights of the European Union, to peaceful enjoyment of property. Deciding how the rights of those affected by these violations should be addressed raises distinctly legal issues.

Secondly, the problem posed by such looting arises from conflicts of law which result in different treatment across the EU for similarly situated claimants, depending on where their property has come to rest.

Thirdly, addressing looted cultural goods issues entails sorting through legal questions relating to public international law, the operation of various treaties, private international law, access to information, property rights, the burden of proof and prescriptive periods.

To conclude, looted cultural goods cases generally present the following issues, all of which are subject to diverging legal standards under the laws of Member States: (1) how is ownership or title established and what access to necessary information do Member States offer claimants? (2) when must a demand be made for return of property, and what should be the relevant statute of limitations? (3) what rights, if any, do ’good faith’ purchasers have in looted cultural goods? (4) what claims run against professional sellers such as art dealers who have bought or sold looted cultural goods? and (5) if a looted cultural good is recovered, may there be limitations on an owner’s ability to export it? The different answers to these questions in the Member States cloud title and impede the movement of cultural goods in the Internal Market.

Assessment of Possible EP Initiatives

The current legal system relating to looted cultural goods is neither consistent nor predictable; it does not encourage the voluntary or efficient settlement of claims, protect the rights of victims seeking recovery of looted property or accomplish the stated goals of international law established by the nations of the world after World War II. In order fully to appraise the issues raised by looted cultural goods, the European Parliament held a hearing in March 2003 with a view both to raise public awareness and to identify potential EU solutions to the problems posed. To pave the way to a comprehensive European framework for the fair resolution of disputes relating to the ownership of looted cultural goods, such a hearing:

– evaluated efforts to implement the principles set forth at the Washington Conference, in Council of Europe Resolution 1205, and at the Vilnius Forum.

– reviewed Member States’ existing programmes for identifying and returning looted cultural goods.

– assessed existing or planned databases relating to looted cultural goods and the feasibility of expanding public databases to allow more comprehensive asset searches tied to specific works and/or claims.

– evaluated EU laws and regulations relating to access to archives on (a) cultural goods, (b) World War II-era expropriation, asset sales, or looting, (c) post-war lists of items looted, items returned to ’countries of origin’, claims filed, and claims settled, (d) museum and dealer records regarding objects bought or sold in Europe between 1933 and 1945. A key question was the relationship between respect for individual privacy and ensuring that the ability of claimants to take action is not impeded.

– established uniform standards for the identification and handling of looted cultural goods, including looted cultural goods which raises provenance questions.

– evaluated the current scope of EU regulation and inter-European treaties or agreements regarding import/export and customs regulation that might relate to establishing uniform standards for the identification and treatment of looted cultural goods.

– reviewed existing efforts to establish parallel cooperation with the authorities in Russia, the Central and East European Countries, and other jurisdictions linked to the identification and recovery of looted cultural goods.

– appraised the use and development of the Lugano Convention and current practice relating to use of that Convention to enforce judgments as to movable property (or cultural objects).

– discussed how the European Convention on Human Rights, the Charter on Fundamental Rights and the jurisprudence that has developed in the ECJ and Court of Human Rights might relate to stolen or looted cultural goods.

General conclusions

The hearing abundantly showed that the current situation lacks legal certainty, transparency and a coherent approach. This is a cross border issue calling for a cross-border solution.

The main objective of this European Parliament initiative is to propose the development of transparent remedial structures, which should be consistent with applicable principles of European and international law.

The European Union should play a leading role in creating a cross-border, coordinating authority that would replace the present system where these disputes are addressed case by case under national law.

In order to play this leading role, the European Union should establish a level playing field of provisions addressing the resolution of disputes relating to the identification, ownership and return of looted cultural goods. To this purpose, it is urgent to create a central database and to provide general access to public and private archives.

These measures not only contribute to a more consistent and predictable internal market in art works, they also improve access to justice and respect the rule of law.

It is ultimately a moral and ethical issue urgently calling for a moral and ethical solution.

We need a clear and coherent approach, not only based on rules and legal principles, but also on principles such as equity and morality. This might be done by a coordinating, administrative authority on European level, setting out these common rules. Cross-border problems need cross-border solutions.

(1) OJ C 17,22.1.1996, p. 141.
(2) OJ C 292, 21.9.1998, p. 112.
(3) OJ C 120 E, 24.4.2001, pp. 182-183.
(4) See Judgment of the International Military Tribunal, 30 September 1946.
(5) Resolution 1205, adopted on 4 November 1999.
(6) The reference to the ’Holocaust Era’ should not be taken to indicate that these initiatives were concerned only with art looted from Jews. During the period in question, large numbers of individuals and groups throughout Europe were victims of such looting, carried out by a variety of perpetrators.
(7) The Russian Parliament modified its law on cultural assets in 2000.
(8) A Bundesrat Resolution regarding the ’Modernisation of the Law of Obligations Act’ (Gesetz sur Modernisierung des Schuldrechts) reaffirmed the Berlin declaration and made it clear that the recent legislation was not intended to alter German law to cut off looted art claims (Autumn 2001).
(9) OJ C17, 22.01.1996.
(10)OJ C292, 21.09.1998