Arcarta, a leading art market due-diligence platform, warns smaller art firms in particular to keep abreast of major regulatory changes.
Market volatility is something that various sectors of business continue to contend with – and the global art market is no exception.
For all things art, the European Union’s new regulation on cultural goods, due to take effect in June this year, plus Trump’s trade tariffs paint a tricky picture for the flow of art trade, and as usual, it’s the smaller firms that could stand to lose out the most.
The soon-to-be-implemented EU regulation to prevent illegal trade of cultural goods, while commanding widespread support for obvious legal reasons, could add complexity to imports. The regulation’s core provisions state that cultural goods created or discovered outside the EU will be banned entry if they aren’t in accordance with the laws of the source country, with objects more than 200 years old and valued above €18,000 having to be accompanied by an importers statement and items over 250 years old requiring a licence. In short, plenty of red tape for the art market.
While there are exceptions for artworks previously imported into the EU and for EU-originated goods, the task of establishing the exact age and provenance of artworks is challenging. Factors, including lengthy ownership histories which predate modern documentation and shifting geographical borders, can muddy the waters when trying to successfully identify the origin of artefacts.
When implemented, these new regulations could see dealers and collectors turning their attention away from the EU and to countries with less stringent import policies.
Key players in the art world including art dealers, galleries, and auction houses will be the ones feeling the administrative burdens. Especially in an economy with mounting overheads, the fear is it is the smaller, younger art businesses, and the potential future figures of the industry will suffer the most.
Add to this harder-to-navigate art landscape the potential US tariffs, and it’s a more uncertain picture still. While US President Donald Trump hasn’t yet gone into specifics, the tariffs have the potential to reduce interest from US buyers, museums and galleries due to the higher cost of acquiring artworks from abroad, negatively impacting art businesses in the EU as well as Mexico and China.
In a market that relies on a few key players, it is the smaller, scaling firms which will likely fall, potentially removing diversity and innovation from the global art market and preventing the future leaders of tomorrow from coming to the fore.
The art market is facing a war on two fronts; navigating new, tougher regulatory landscapes and dealing with external economic pressures like inflation, it’s an arguably tougher balancing act than other sectors are contending with.
The hope now for art firms the world over is the establishment of a clearer, transparent and equitable system, but for now, the sector, including the smaller players, needs to pay close and constant attention to regulatory changes in order to keep their head above water.