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Fine Arts, Art Collectors & Thailand

Fine Arts, Art Collectors & Law in Thailand

The 21st century is a golden period for the flourishment and expansion of the fine arts and art collectors not only in Thailand but in South East Asia as a whole. Even though the artistic element of Thai architecture as seen in Buddhist temples and pagodas is widely known (Unesco has added 3 Thai locations to the World Heritage List: Ban Chiang Archaeological Site, Ayutthaya and Sukhothai), Thailand is still a few steps behind other countries in Asia in terms of the art business.

Art Collectors

For example, leading positions in the continent are headed almost exclusively by renowned Hong Kong art collectors such as William Lim, Adrian Cheng, Joseph Lau and Alan Lau. There are, however, indications of change, as art collectors in other regions are emerging such as the Indonesian Budi Tek or the Japanese Shoichiro Fukutake among others.

Despite negative forecast for 2016, since 2010 China has become the world’s leading fine arts marketplace, with other regional hubs growing rapidly in Indonesia (+39%) and Singapore (+22%). There is a growing awareness and interest focused on traditional Chinese, Japanese and Korean ceramic pieces and antiques, as well as an expanding amount of Asian collectors targeting more contemporary art such as Jean-Michel Basquiat art pieces. In China new regulations are being implemented since March 2016 and the necessity of a basic global legal framework for the art business look a must for the professionals of the art world.

According to the Unesco Declaration of 17 October 2003, the international community recognizes the importance of the protection of cultural heritage and reaffirms its commitment to fight to ensure that such cultural heritage may be transmitted to the succeeding generations. Indeed, in my opinion it is impressive that the artistic heritage found in South East Asia has survived the phenomenon of colonialism and decades of cruel war in the continent, and nowadays is one of the most valuable assets for countries in Indochina (For example: Cambodia), reflecting the necessity of cultural diversity for humankind just as biodiversity is for nature.

Fine Arts

On a business related note, it is indeed astonishing how the art market is maturing in the Asean region. We can notice how ‘the big two’ auction houses, being Sotheby’s and Christie’s, are maneuvering fiercely with the goal of gaining a strategic foothold in the promising Asian Art market by setting up different business models of legal entities such as Education centers, representative offices, art institutes, salesrooms and art consultants in key cities such as Manila, Jakarta, Kuala Lumpur and Bangkok.

Asean market is the one of the best performing markets for fine arts as the modern and contemporary art market experienced a growth of 28% in sales during 2015. Indeed, it is not a secret that private collectors are maintaining discourse with curators and art merchants, such as the Thai collector Mr. Tira Vanichtheeranont in Bangkok, with the goal of setting up small museums and art institutes across the region. Recently, the Tourism Authority of Thailand openly asserted that main Thai cities need to promote the establishment of museums in order to attract less low budget tourists and catch the attention of more sophisticated or high end tourists.

Law In Thailand

Evidently, not everything is glamorous in the world of fine arts. The lack of professionalism and credentials are two main weak points for the art sector in the emerging South East Asian market. Evidence of this is the relative abundance of low profile agents and “dealers” with small knowledge or no knowledge of fine arts, often found fighting for commissions that they do not really control or have direct access to.

Many transactions in the art business collapse due to the presence of “middle men” that sell master pieces as they might also sell yachts, luxury villas, diamonds or gold bars. Pablo Picasso said “Art is a lie that makes us realize truth”, which is proving increasingly relevant in a market saturated with unprofessional practices causing falsifications and problems related to the authenticity of pieces.

This is why it is vital to work with professional lawyers and qualified curators with expertise in fine art. Specialized lawyers and curators must work together in conducting comprehensive due diligences prior to the acquisition of pieces by art collectors or museums. It is with this in mind that I would argue that the know-how and know who are as essential as legal expertise and art knowledge in completing such a job.

For example, the curator can draft a price analysis of a piece that is relevant for the collector in order to avoid speculative transactions, even if prices in art differ substantially from other assets, the purchase of collections of art also involves an emotional element that can affect the prospect of the transaction.

As the signature of an artist can change during his or her life, technical analysis by microscope may not be binding and the Certificate of Authenticity (COA) is not necessarily decisive. In my professional experience as a lawyer and art collector I would argue that the main document to take into consideration is the Provenance (from the French word “provenir” that means “to come from”), that is the most important document to assess the genuineness of a piece as it represents the entire life and existence of the piece by including detailed information (dimensions, medium and title) related to the piece, the different owners who possessed the piece, the different museums or art galleries where the piece was exhibited, lot number in catalogs, specific mentions to the piece in books, films and art literature, Catalogues raisonnés, sales or customs receipts acknowledging the piece or appraisals from experts (real experts on the particular artist) or well-known authorities known to have possessed the piece.

Obviously all these documentation comprising the provenance must be original, not a photocopy, and the details have to be confirmed by consultants, both a curator and lawyer, double checking every single detail related to veracity of the referred name, surname and auction house or art gallery.

In order to protect the interests of the collector, lawyers who conduct due diligences on the piece must minimize the risk of litigation, potential disputes or purchase on doubtful pieces. On the scope of work of this due diligence, it is necessary to secure compliance by not giving any chance to trade with stolen art (For example: Protocol to the Convention for the Protection of Cultural Property in the Event of Armed Conflict. The Hague, 14 May 1954 and the Second Protocol to the Hague Convention of 1954 for the Protection of Cultural Property in the Event of Armed Conflict. The Hague, 26 March 1999) or any misconduct or criminal and fraudulent behavior by knowing the client (For Example: Money laundering through art).

In fact I can see that, even if nowadays the big law firms in Thailand have no remote idea about this business, in the future lawyers will involve more on litigation and court proceedings related to art forgery and restitution and recovery of art pieces, sculptures and heritage representing a big variety of institutions such as museums, governments, embassies, insurance companies, art investment funds, patronage, foundations and families. We already have witness this outside of Asia with legal proceedings involved art pieces of Leonardo Da Vinci, Botticelli or Chagall and many other international court cases after the end of the Second World War.

In addition to this, hereby the art lawyer must take in account: jurisdiction and international taxation. For example: a piece purchased from an art gallery in Paris by an Asian collector will carry with it duties and import tariffs that are not present if the same piece was bought in a free trade port, such as Singapore.

The legal work does not finish at this, and it is advisable to work with a legal professional or law firm on issues such as those following:

-Purchase agreement

-Intellectual Property issues

-Insurance (theft or natural disaster)

-Transportation (Export-import)

-Heritage and wills

-Tax planning

To conclude, I would like to point out that the forecast for the fine arts business and art collectors in the Thailand region is overall very positive and is full of opportunities in the public and private sector for those willing to look. In my opinion, the current trend shows that over time the public sector will increasingly become involved in private sector projects involving art. As a result, legal professionals will have to acquire more familiarity with documentation related to art, and long term private collectors will set up and manage their own highly profitable boutique museums.

At the same time I believe that many new players will burst into the Asian art scene, as fine art can be a more profitable investment than banking and financial service (volatility of art is much lower than US and international equities and commodities). In fact recent statistics show that 72% of the art collectors acquired art guided with an investment perspective. This has to be dully assimilated by the wealth management firms and the investment banks in Asia. The outlook is very promising and I have no doubt that lawyers will play an important role on the future of art business in South East Asia.

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