United States: New Law Provides Foreign Governments With Immunity From Suits Brought To Recover Artworks On Exhibition In The U.S.

The "Foreign Cultural Exchange Jurisdictional Immunity Clarification Act," (the "FCEJIC") was signed into law on December 16, 2016. The law is a significant amendment of the Foreign Sovereign Immunities Act, providing immunity from lawsuits to foreign governments loaning artworks for exhibition in the United States.

The statute was passed as a reaction to a landmark case, Malewicz v. City of Amsterdam, that Herrick's Art Law Group had brought on behalf of the heirs of the famed constructivist artist, Kazimir Malevich, against the City of Amsterdam, Netherlands, to recover a number of Malevich artworks brought to two major museums in the U.S. for temporary exhibition. In that case, the District Court for the District of Columbia held in 2005 that even though the artworks were immune from seizure by the Court during the exhibition, and therefore could and did return to Amsterdam when the exhibition ended, the fact of their presence in the United States, among other things, could serve as a jurisdictional basis for the heirs' suit. The lawsuit was eventually settled, with the heirs recovering five iconic Malevich paintings from the City of Amsterdam.

The FCEJIC essentially overrules the Malewicz case and provides foreign states with immunity from being sued in a U.S. court where such states have obtained immunity from seizure for artworks on loan to the United States -- with one major exception.

The law specifies that "any activity in the United States of such foreign state, or of any carrier, that is associated with the temporary exhibition or display of such work shall not be considered to be commercial activity by such foreign state" if the following three conditions are met:

  1. a work is imported into the United States from any foreign state pursuant to an agreement that provides for the temporary exhibition or display of such work entered into between a foreign state that is the owner or custodian of such work and the United States or one or more cultural or educational institutions within the United States;
  2. the President, or the President's designee, has determined, in accordance with subsection (a) of Public Law 89–259 (22 U.S.C. 2459(a)), that such work is of cultural significance and the temporary exhibition or display of such work is in the national interest; and
  3. the notice thereof has been published in accordance with subsection (a) of Public Law 89–259 (22 U.S.C. 2459(a)).

The law does, however, provide an exception for Nazi-era claims and other culturally significant works taken in violation of international law from members of a targeted and vulnerable group. In the first instance, the exception applies where the claim is based on a taking committed during the war era -- broadly defined as commencing on January 30, 1933 and ending on May 8, 1945 -- in connection with acts taken by the Government of Germany or its allies, including those governments that were occupied or established with the assistance or cooperation of Germany during the relevant time period.

With regard to the latter portion of the exception, the FCEJIC likewise does not apply where the property "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 where the following factors apply:

  1. the taking occurred after 1900;
  2. the court determines that the activity associated with the exhibition or display is commercial activity, as that term is defined in section 1603(d); and
  3. a determination under clause (iv) is necessary for the court to exercise jurisdiction over the foreign state under subsection (a)(3).

The law will not apply to preexisting claims, but applies to civil actions commenced on or after the date of enactment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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