U.S. Extends Foreign Sovereign Immunity for Art Works
Kelley Drye Client Advisory
On 16 December 2016, a new amendment to the U.S. Foreign Sovereign Immunities Act (FSIA) was signed into law, extending the immunity of foreign States which send art works to the U.S. for temporary exhibit. While the change was welcomed by the U.S. art community, two important exceptions to the extension of immunity might result in new uncertainties.
This new amendment, the Foreign Cultural Exchange Jurisdictional Immunity Clarification Act (FCEJICA), extends the immunity of foreign States which send art works to the U.S. for temporary exhibit by narrowing the expropriation exception in the FSIA. The bill with the proposed amendment was introduced for the first time in 2012, but had to be reintroduced several times before passing both the House and the Senate in December 2016. The amendment was welcomed by the U.S. Association of Art Museum Directors, as many foreign museums were unwilling to lend art works to U.S. museums. However, it remains to be seen whether the FCEJICA will be successful in providing greater certainty to foreign States.
Narrowing the FSIA Expropriation ExceptionThe amendment for art works narrows the expropriation exception in the FSIA. The expropriation exception (Section 1605 (a)(3) of the FSIA) lifts the immunity of foreign States if ‘rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state.’ The art works amendment provides that the temporary exhibition of art does not constitute ‘commercial activity’, subject to 3 conditions: (1) the foreign State is the owner or custodian of the art work and has entered an agreement for the temporary exhibition of the work, (2) the U.S. President has decided that the art work is of cultural significance, and (3) the exhibition of the art work is in the national interest (Section 1605 (h)(1) of the FSIA). Hence, foreign States are immune from claims in relation to art works which are on temporary exhibition in the U.S.
This amendment was brought about by the 2007 judgment in the Malewicz case in which the U.S. District Court for the District of Columbia decided that the loan of art works constituted ‘commercial activity’. The case revolved around claims of the descendants of Russian painter Kazimir Malewicz alleging that the City of Amsterdam had unlawfully acquired a number of Malewicz’ paintings in 1956. The City of Amsterdam had loaned these paintings to museums in the U.S. and invoked immunity before the U.S. Court. However, the Court decided that the loan constituted ‘commercial activity’ under the FSIA expropriation exception, which allowed the suit to go forward. The Malewicz judgment discouraged foreign States from lending art works to U.S. museums out of fear of legal claims. Its legacy was invoked as the impetus for the FCEJICA bill.
Broader Immunity, but More Legal Certainty?The immunity of foreign States for the temporary exhibition of art works has two important exceptions (Section 1605 (h)(2) of the FSIA). The first exception relates to Nazi-era claims, claims relating to art works taken in violation of international law by the Government of Germany or any government in Europe occupied by or established with the assistance of the Government of Germany from 30 January 1933 to 8 May 1945. The second exception lifts immunity for claims relating to art works taken in violation of international law if ‘such work was taken in connection with the acts of a foreign government as part of a systematic campaign of coercive confiscation or misappropriation of works from members of a targeted and vulnerable group’ and this taking occurred after 1900.
The first exception, for Nazi-era claims, could encompass many potential cases as Nazi Germany is known to have stolen a lot of art.
However, more troubling is the second exception as it is unclear what is meant with ‘a systematic campaign of coercive confiscation’ and ‘vulnerable group’. Read in combination with the 2016 judgment of the U.S. Court of Appeals for the D.C. Circuit in the Simon v. Republic of Hungary case, the FCEJICA could even expand the FSIA expropriation exception. In this judgment it was held that the confiscation of property in itself can amount to genocide and thus violate international law, even if this concerns a government seizing property of its own nationals. This contrasts the traditional view that the confiscation, by a government, of the property of its own nationals, does not infringe international law. The second exception of the FCEJICA seems to leave room for claims similar to the ones in Simon v. Republic of Hungary, in which a government expropriates its own nationals. To sum up, although the FCEJICA was meant to provide greater protection to foreign States lending art works to U.S. cultural institutions, it remains to be seen whether it does not create more uncertainty.