May 2, 2018 Cultural Property Advisory Committee Meeting to Discuss Ecuadorian MOU and Renewal of MOU with PRC

              On May 2, 2018, the U.S. Cultural Property Advisory Committee held a “virtual” meeting where CPAC members and all speakers were linked via an internet based video platform.  At least the following CPAC members were in attendance:  (1) Karol Wight (Museum); (2) Lothar von Falkenhausen (Archeology); (3) Nancy Wilkie (Archaeology); (4) Rosemary Joyce (Archaeology); (5) James Willis (Trade); and (6) Jeremy Sabloff (Public-Chair).  Cari Enav, the Cultural Heritage Center’s new chief, introduced Dr. Andrew Cohen as CHC’s new executive director and Dr. Sabloff as the Chair of CPAC. Dr. Sabloff ran the meeting.

                There were five (5) speakers:  (1) Peter Tompa (Global Heritage Alliance (GHA)/International Association of Professional Numismatists (IAPN)/Professional Numismatists Guild (PNG)); (2) Kate FitzGibbon (Committee for Cultural Policy (CCP)); (3) Josh Knerly (Association of Art Museum Directors (AAMD)); (4) Alex Nyerges (Virginia Museum of Fine Arts (VMFA)); and (5) Tess Davis (Antiquities Coalition).

Ecuadorian MOU

                Peter Tompa spoke on behalf of GHA, CCP, IAPN and PNG.  He indicated these groups had serious concerns about the short public comment period and the fact that the Ecuador’s proposal sought import restrictions on “Colonial and republican period coins; medallions more than 50 years old …manuscripts more than 50 years old; and certain works by modern artists.”  None of these materials may be restricted under the terms of the Cultural Property Implementation Act (CPIA) because they do not meet the definitions for archaeological or ethnological objects.  Archaeological objects must be at least 250 years old and be normally found in the ground.  Ethnological objects must be the products of tribal or non-industrial societies.  The Legislative History makes clear that Congress understood the term “ethnological” to only encompass what is considered “primitive” or “tribal” art, and not any object which is repetitive in character. 

                These limitations on archaeological and ethnological material should preclude restrictions being placed on coins and medallions.  While the State Department has—over the objections of the numismatic community and prior precedent—placed import restrictions on ancient and other early coins, the Spanish Colonial and Republican era coins at issue here cannot lawfully be restricted because they are neither archaeological nor ethnological in character.  More than that, however, they are as much a part of US culture as they are of Ecuadorian culture.  Large swaths of what is now the US was formally part of Spain’s Empire and even the United States itself—due to the shortages of hard currency at the time—used such coins as legal tender until 1857.  Indeed, such coins were so popular that the term “two bits” entered into our language as meaning 25 cents.  Moreover, references to “pieces of eight” and “gold doubloons” abound in our storytelling, including Melville’s Moby Dick and countless yarns about pirate treasure. 

                Before recommending a MOU, CPAC must also consider what self-help measures Ecuador has undertaken, including the funding Ecuador has devoted to cultural heritage protection.  At least one recent academic work has questioned Ecuador’s commitment in this area.

                Josh Knerly spoke on behalf of AAMD.  AAMD may have been in a position to support the MOU, but the short time span made impossible to poll members.  Knerly echoed Tompa’s concerns about import restrictions being misapplied to objects that are neither archaeological nor ethnological in character. 

                Chairman Sabloff indicates that staff ran into unexpected difficulties in getting out the notice for the CPAC meeting, and that in the future the Committee will try to do better.

                Rosemary Joyce asked about AAMD’s generic recommendations. Knerly indicated that AAMD typically asks for long term loans, low loan fees and immunity from seizure laws.

                In response to a question from Nancy Wilkie, Knerly indicated he did not know if any Ecuadorian artifacts were on display in US museums.  During the review of the China MOU, he later stated that he had learned that at least one AAMD member museum displays Ecuadorian artifacts.

China MOU

                Peter Tompa spoke on behalf of IAPN and PNG.  IAPN and PNG are all for Chinese collecting, but the reality of a huge, largely open internal Chinese market in common antiquities like pottery and coins, raises serious questions about the point of import restrictions imposed on American collectors.  This is especially problematical because the most successful Chinese antiquities sales outlets are controlled by insiders associated with the Chinese Government.  

                There is also the issue of Chinese obligations under the current MOU.     First, China was supposed to make it easier to legally export artifacts, but that provision was drastically limited in the 2014 renewal to Chinese objects imported into China for re-export and there is no indication China has even complied with this weaker provision.  Of course, few rules apply to the free ports of Hong Kong and Macao.  China was also initially supposed to clamp down on them, but it has not.  Instead, artifacts leaving these ports can still be re-imported into the PRC no questions asked.  

                Even more importantly for US coin collectors is the issue of Chinese fakes of historic US coins.    Chinese businesses licensed by the Chinese Government are counterfeiting untold thousands of fake historic US mint coins which are then being introduced into the US numismatic market.    

                Summing up, Tompa stated that the MOU with China should be suspended because it is doing nothing to actually protect Chinese archaeological sites.  At a minimum, Chinese cash coins, which exist in the billions and which are widely collected in China itself, should be delisted. 

                Lothar von Falkenhausen made a statement that what we know about Chinese coins comes from archaeology.  Tompa disputed this claim noting that much information has come from documentation and observation of the types of cash coins found in 1000 coin strings that were used for trade through the early part of the 20^th century.

                Nancy Wilkie states it is not CPAC’s concern that China is counterfeiting US Coins.  Tompa states this is a matter of comity and falls broadly under cultural exchange.  Tompa states this should be addressed in Art. II of the agreement, the part that requires undertakings by the Chinese.

                Kate FitzGibbon spoke for CCP and GHA.  She stated the U.S. Senate recently condemned China’s repression of Tibet, including its cultural heritage.  She then stated there is no justification whatsoever for renewing the China MOU under the CPIA.

• China has a billion-dollar annual internal market in art of all periods that includes the same kinds of antiques barred from US import.
• China has more than adequate internal enforcement resources; its government does not need the US to be a distant, international policeman.
• Past MOUs barring import of Chinese art have had no discernable effect on looting in China.
• The United States is no longer a primary market nation; it has had a net outflow of Chinese art for the last decade. Thousands of US-owned antique objects have left the US – destined for China.

                According to a comprehensive study by Artnet and the China Association of Auctioneers, after the enactment of the original MOU with the United States in 2009, the auction market for art and antiques in mainland China experienced 500% growth between 2009 and 2011. In 2011, the Chinese auction market surpassed all other countries in the world.

                Even in 2014, the year after the MOU’s first renewal, the fastest growing import into China was art, antiques, and collector items, which increased at a staggering 2281% rate.

                Despite its pro-archaeological rhetoric, nothing in Chinese law prohibits the import of all objects predating the end of the Tang Dynasty, as the MOU now does in the US. Nor does Chinese law prohibit the trade or import of monumental sculpture or wall art more than 250 years old ‑ the very objects banned under the China-United States MOU.

                The CCP asked ArtNet, an independent art market research network, to analyze the largest auction sales. In 2016, the total sales of Chinese art at the top ten auction houses worldwide were $103 million dollars. Of this total, $58 million was sold at four auction houses in Hong Kong, and $46 million in six auction houses in Beijing and Hangzhou in mainland China. The only US auction house to make it into the top ten globally that year was Sotheby’s New York, with only 6% of total market share.

                In the United States, the most recent high-value sales are from long-held and foreign collections. A brief 2017 spike in U.S. sales of Chinese art resulted from a single record-breaking sale at Christie’s of a museum collection.  Even there, some of the largest buyers were Chinese

                There is an obvious contradiction between the Department of State’s designation of China’s government as systemically violating international norms of cultural tolerance, and the repeated renewal of US-China agreements on cultural property that grant China’s government absolute control over the same cultural heritage that it has sought to destroy.

                Jim Willis asked if the State Department should renew restrictions that touched on Tibetan art.  Kate FitzGibbon said we should not repatriate Tibetan art to China.

                Josh Knerly stated that AAMD was also hampered by the short time frame allowed in responding to the China MOU.  While AAMD museums have enjoyed good cooperation with Chinese museums, there has been very little progress in the last 5 years on issues related to the length of loans and legislation granting immunity for such loans.

                Karol Wight indicated that her museum, the Corning Glass Museum, was getting good cooperation from China.  She asked Knerly about access for scholars.  He stated such access has had problems at times.  In at least one example, a scholar did not learn whether they could examine objects before they actually arrived at the Chinese institution in question.    

                Alex Nyerges indicated that the VMFA has received good cooperation with Chinese museums with which VMFA has had its own MOUs.  He echoed Knerly’s concern about the length of loans.  Such loans should be for multiple years so that artifacts may travel to other venues so the exhibit is cost effective.  China should also send higher graded antiquities that can be the centerpiece of exhibits. 

                These cultural exchanges have been two way.  Recently, the VMFA sent an exhibit of Fabergé eggs to the Palace Museum in Beijing. 

                In response to a question from Nancy Wilkie, Nyerges has said that seizures of foreign exhibits in China has not been a concern.  He also indicates that the security at the museums VMFA has MOUs with has been excellent.  Other AAMD member museums such as Cleveland, the Met, and Indianapolis also have had very positive experiences with Chinese museums. 

                Tess Davis states China has met all the requirements for a renewal.  The first determination is met.  China has 760,000 archaeological sites that remain in jeopardy of looting. 

                The second determination relating to self-help is met.  China is making its best efforts to protect these sites.  There are export controls on artifacts.  Chinese cultural officials recently met with judicial officials to underscore the need to punish looters.

                The third determination regarding a concerted international response is met.  More countries have joined the UNESCO Convention.  Others now have strong anti-looting legislation favoring repatriation. 

                The MOU has promoted culture exchange.  The Terracotta warrior exhibit is a great example.    Davis believes protecting cultural heritage is a human rights issue. 

                Jim Willis asked how we can enter into an agreement that recognizes the Chinese government’s rights to Tibet’s culture.  Davis stated by restricting imports of Tibetan heritage in the US, we are helping to protect it for a future time when Tibet is hopefully free.

The Chinese Dream is No Reason to Harm US Collecting

Here is what I said at yesterday's CPAC meeting with regard to a proposed renewal of a MOU with the PRC.  More later. 

          China’s leader, Xi Jinping, has popularized the slogan, the Chinese Dream, as a call for China to reclaim its ancient glory. 

          Part of all this, of course, is to highlight the importance of ancient Chinese artifacts not just through diplomatic efforts like this MOU, but through the creation of a vibrant internal collector’s market, including world class bourses like the Beijing International Coin Exposition and auction houses like China Guardian and Poly Auctions.

          IAPN and PNG are all for the Chinese government encouraging China’s own people to collect, preserve, study and display ancient artifacts, particularly as common as ancient Chinese coins, which must exist in the billions.  That certainly is much preferable to the ideologically motivated destruction of Chinese cultural heritage during the Cultural Revolution or, for that matter, the far more recent demolition of Christian Churches by China’s atheist government.

          But given the reality of a huge, largely open internal Chinese market in common antiquities like pottery and coins, it’s a fair question to ask what is the real purpose of the import restrictions our State Department, presumably with the consent of CPAC, have imposed on American collectors, the small businesses of the antiquities and coin trade and museums?

          Certainly, archaeologists have argued that import restrictions help drive potentially looted artifacts off the market, but such a claim makes little sense whatsoever given this huge internal Chinese market.   Indeed, all that is really being accomplished is to give Chinese dealers, auction houses and collectors a leg up on their foreign, particularly American competition.   

          Does the Trump Administration really support such a state of affairs, particularly where the most successful Chinese antiquities sales outlets are controlled by insiders associated with the Chinese Government, like Poly Group controlled by the family of former leader Deng Xiaoping who also run a major weapons producer, and China Guardian Auctions, run by Chen Dongsheng, the grandson-in-law of the PRC’s founder, Mao Zedong?  Let’s hope not.

          There is also the issue of Chinese obligations under the current MOU.     Several issues come to mind.   First, China was supposed to make it easier to legally export artifacts, but that provision was drastically limited in the 2014 renewal to Chinese objects imported into China for re-export and there is no indication China has even complied with this weaker provision.  Of course, few rules apply to the free ports of Hong Kong and Macao.  China was also initially supposed to clamp down on them, but it has not.  Instead, artifacts leaving these ports can still be re-imported into the PRC no questions asked.   

          Even more importantly for US coin collectors is the issue of Chinese fakes of historic US coins.   As the letter submitted by our sister organization, ICTA, states, Chinese businesses licensed by the Chinese Government are counterfeiting untold thousands of fake historic US mint coins which are then being introduced into the US numismatic market.   How can the US State Department countenance the renewal of a MOU when the PRC encourages the production of counterfeits that have damaged the American coin trade and which also represent a serious violation of US counterfeiting and hobby protection laws? 

          Finally, let’s talk more about Chinese coins currently on the designated list.   The State Department and U.S. Customs have misapplied the CPIA’s requirement limiting any restrictions to artifacts “first discovered within” and “subject to the export control” of China.  They have instead barred the import of any Tang Dynasty and earlier coins based on their place of production, which is entirely different. 

          One cannot safely assume any Chinese cash coins are only found where they were made.  Scholarly evidence demonstrates that early cash coins like those on the designated list were exported in quantity with later issues all around the Far East and even as far West as Africa and the Arabian coast.   Moreover, it is difficult for all but experts to tell restricted Tang and earlier Chinese cash coins from later unrestricted ones that were produced as late as 1911 or similar ones made in places like Japan, Korea and Vietnam.

          The MOU with China should be suspended because it is doing nothing to actually protect Chinese archaeological sites, but at a minimum, Chinese cash coins, which exist in the billions and which are widely collected in China itself should be delisted. 

          Thank you.

Any MOU with Ecuador May only Authorize Import Restrictions on Archaeological and Ethnological objects.

Here is my statement at yesterday's CPAC meeting regarding Ecuador's request.  More later:

Thank you for this opportunity to speak on behalf of 4 different organizations, the Committee for Cultural Policy, a non-profit educational organization, Global Heritage Alliance, an advocacy group, and two numismatic trade associations, the International Association of Professional Numismatists and the Professional Numismatists Guild.   I would direct your attention to their two separate papers, one by CCP and its sister organization GHA, and one by IAPN and PNG.  In the interests of time, I am speaking on behalf of all these organizations here, but each have distinct personalities and interests.

            What they share is concern about this proposed MOU, particularly the lack of sufficient public notice and the apparent breadth of the request, which includes cultural goods that are neither archaeological nor ethnological in character.   According to the public summary, Ecuadorian law only applies to objects 100 years old, but the request includes objects only 50 years old.   So, there even appears to be a serious disconnect within the Ecuadorian request itself.

            More to the point, however, CPAC—which has an obligation to follow the Cultural Property Implementation Act—should be hard pressed to recommend any restrictions on items that are neither archaeological nor ethnological in character such as “Colonial and republican period coins; medallions more than 50 years old …manuscripts more than 50 years old; and certain works by modern artists.” 

            This should be clear from the CPIA itself which defines archaeological objects as being over 250 years old and normally discovered as the result of digging and which defines ethnological objects as the products of tribal or non-industrial societies.  The Legislative history, also quoted in our papers, makes clear that Congress understood the term “ethnological” to encompass only what is considered “primitive” or “Tribal art” and not any object that is repetitive in nature.

            These limitations on archaeological and ethnological material should preclude restrictions being placed on coins and medallions.  While the State Department has—over the objections of the numismatic community and prior precedent—placed import restrictions on ancient and other early coins, the Spanish Colonial and Republican era coins at issue here cannot lawfully be restricted because they are neither archaeological nor ethnological in character.  More than that, however, they are as much a part of US culture as they are of Ecuadorian culture.  Large swaths of what is now the US was formally part of Spain’s Empire and even the United States itself—due to the shortages of hard currency at the time—used such coins as legal tender until 1857.  Indeed, such coins were so popular that the term “two bits” entered into our language as meaning 25 cents.  Moreover, references to “pieces of eight” and “gold doubloons” abound in our storytelling, including Melville’s Moby Dick and countless yarns about pirate treasure. 

            Before recommending a MOU, CPAC must also consider what self-help measures Ecuador has undertaken, including the funding Ecuador has devoted to cultural heritage protection.  Congress has recently included reporting language as part of its funding of the Bureau of Educational and Cultural Affairs that underscores this requirement.   Although it is unclear what Ecuador spends on protecting its cultural patrimony, according to Ernesto Salazar, an academic who has written on the subject, the situation in Ecuador is far from perfect.   

            In sum, we request CPAC take steps to ensure that any designated list excludes coins and any other objects that do not meet the definition of archaeological or ethnological objects found in the CPIA.  We also ask CPAC to gauge Ecuador’s self-help measures, including efforts to ensure archaeological site workers get a fair living wage for work done on behalf of foreign archaeological missions.

            Thank you.