Institutions and collectors now have a new form of Uncle Sam looking over their art transactions: royalty seekers. If you’re planning to sell works by California artists, or works created in our state, you need to know the provisions of a statute currently on the books, as it could impact your pocketbook or those of any auction house or gallery selling works on your behalf.

As the Los Angeles Times and other news outlets have recently reported, the Sam Francis Foundation and other artists or their estates are suing for repeat sale royalties under the California Resale Royalties Act. This legislation, apparently honored more in the breach than in actuality, returns a 5% royalty to artists upon profitable reselling of works at values above $1000. The California law applies to artists living in the state, estates of artists going back 20 years, and/or to sales taking place in the state.

Galleries, major auction houses, and even Ebay are being targeted in lawsuits seeking payment of royalties by well known artists such as Chuck Close, Laddie John Dill and Robert Graham Estate . Similar to “droit de suite” resale royalties laws on the books in many European countries, artists are hopeful that such suits, if successful, will lead to adoption of a national law. The royalty is based on the retail sale price of the artwork, less whatever was originally paid for the work by the current seller. So works purchased years ago and held during decades of appreciation, as often occurred with the top tier of artists, can result in some whopping assessments.

The royalty can apply even if the artist lived in California for as little as two years, and also applies to barter or exchange of works as well as outright sale. Yikes. The fine print can be found in the California Commercial Code, section 986, always our first stop for a rousing read.

Betsy Dorfman

The FBI has just launched a new searchable database which lists both images and details of stolen artworks. The National Stolen Art File (NSAF) is a free online tool allowing both the public, law enforcement, and institutions to aid in the identification and recovery of stolen works.  Oh and, yes, art shippers too.

Any item stolen in the U.S. and valued at $2000 or over can be listed. The goal, in addition to recovery, is to provide a forum that will help keep “hot” items off the market in the first place. Collectors and galleries can and should search here if any red flags are raised in the course of their due diligence before acquiring or representing works. The listings cover a variety of works including paintings, sculpture, stamps, pottery, tapestries, books and other cultural heritage artifacts.

The database currently has a library of some 7000 images, and items can be searched by keyword and category, as well as by artist, title, and date range. The FBI website also features stories of both solved and unsolved art thefts — pretty interesting reading from an unlikely source of, albeit cautionary,  entertainment.

Weve had only one encounter over the years with law enforcement seeking information on a possibly forged painting we shipped for a client. Such cases can take years to unfold and prosecute; just discovering the  principal parties to a transaction can be tricky where layers of contacts are deliberately put in place to conceal buyer and/or seller identities. Such concealment isn’t always nefarious — galleries and dealers sometimes have quite Byzantine arrangements involving loans and multipart ownership of pieces which may not be made transparent to the buyer. And which, so long as the artwork and provenance are genuine, will not be made famous online by the FBI.

It remains to be seen if the Internet will prove useful in curbing at least some of the trafficking in stolen art, which the FBI acknowledges to be an age old problem. Time to turn in that Monet you found in the dumpster — everyone is going to recognize it now.

Betsy Dorfman

Actually, they’re here. We’re branding these as ARTfids, our in house name for radio frequency identity tags which track the location of artworks in our care. You likely have experienced RFIDs in the guise of those pesky tags stores embed in clothing as a theft preventative.  Step out the door and through the “reader” and you trip an alarm.

Now this technology is making its way into the realm of fine art inventory systems and handling.  RFID technology is a huge improvement over bar coding as well as  visual only labeling systems.  Information from RFID tags can be scanned and uploaded directly into a computer to form an instant inventory. When pieces are deaccessioned from storage they are scanned out,  and scanned again coming off the truck at a delivery point using the handheld reader. Game, set and match.

The application for fine art is obvious: you want to know where high value items are at all times. New flat labels make this possible. RFID tags look like regular shipping labels and can be affixed to artworks quickly and simply.  Our proprietary system of ARTfids works with a handheld reader that is carried through our warehouses,  taken to job locations, and used on the trucks.   Inventories are read and verified in far less time than it takes to do manual counts, and with far greater accuracy.

And, how cool is this: unlike barcodes or human eyes,  RFID readers don’t require line of sight to the actual tag. The radio signal can be picked up from even inside closed containers. So, for example, the reader can report and verify the entire contents of a crate containing multiple pieces, without opening the crate. Walking through a loaded truck the reader can verify which items are on board, even if one is behind the other. Point it at a set of shelves where small items have been stored and it will tell you if one has been left on a high shelf out of sight.

RFID technology has obvious applications for institutions, collectors, and homeowners wanting peace of mind as to the location of their valuables. We’ll have a follow up post on a major Los Angeles art theft that might have been prevented had an RFID detection system been in place.

In our setting, i.e. the professional fine arts and antiques storage facility, the upgrade to RFID has been a major improvement. We’re very excited about this technology and invite questions from customers and the general public on this grand new tool for inventory and tracking of fine art.

We’ll also show you some photos of the tags and the system in use in later posts.

Betsy Dorfman