A work leaving the EU needs its own licence, and a Gulf carnet covers exhibitions only.

ArtisDomus sees this move as two separate systems that meet in the middle. The European one asks whether a particular object may leave. The Gulf one asks whether a consignment may enter, on what security, and for how long. A shipment that satisfies only the first stops at the second.

Published by ArtisDomus, written by Polina Surina.

Two things decide the move: what you must obtain before the collection leaves, and what you must settle when it lands.

Council Regulation (EC) No 116/2009 defines cultural goods as the items listed in its Annex I (art. 1). Member States keep their powers under Article 30 of the Treaty. Exporting cultural goods outside the customs territory of the Community requires an export licence (art. 2(1)). Anything outside Annex I is outside this Regulation, whatever it is worth.

Annex I lists fifteen categories, and Part B sets a value threshold in euro for most of them.

The age rule does most of the work, and it sits in a footnote. Footnote 1 to Annex I applies to categories 3 to 9, items “which are more than 50 years old and do not belong to their originators”. Those seven categories are pictures and paintings, watercolours, mosaics and drawings, engravings and prints, sculpture, photographs, and incunabula and manuscripts. So a painting bought from the artist is outside this Regulation at any price. Most of a living collection drops out on age before value comes into it.

Annex I also fixes when value is tested: when the export licence application is submitted. The value is the object’s value in the Member State referred to in Article 2(2). The Council must review the amounts in Annex I every three years, on a Commission proposal, and update them where appropriate (art. 10(2)).

Article 2(2) decides which Member State issues the licence. It is the Member State where the object was lawfully and definitively located on 1 January 1993. After that date, it is the Member State where the object is located after one of three events. The events are lawful and definitive dispatch from another Member State, import from a third country, or re-import from a third country after lawful dispatch there from a Member State.

Two more paragraphs cover a refusal and what lies beyond the Regulation. The licence may be refused if the goods are covered by legislation protecting national treasures of artistic, historical or archaeological value in that Member State (art. 2(2)). Some national treasures of artistic, historic or archaeological value are not cultural goods under the Regulation. Their direct export from the customs territory of the Community falls under the national law of the Member State of export (art. 2(4)). Member States set the penalties, which must be effective, proportionate and dissuasive (art. 9).

Commission Implementing Regulation (EU) No 1081/2012 sets out the forms. There are three types of export licence: the standard licence, the specific open licence and the general open licence (art. 1). A standard licence is normally used for each export under Regulation (EC) No 116/2009 (art. 2(1)).

An export licence is valid for up to 12 months from the date of issue (art. 9(1)). For a temporary export, the authorities may set a deadline for re-import into the issuing Member State (art. 9(2)). If a licence expires unused, the holder must return the sheets to the issuing authority at once (art. 9(3)).

The two open licences are worth knowing before planning a move, because a private owner can hold only one of them. A specific open licence covers repeated temporary export of one specific cultural good by a particular person or organisation (art. 2(2)). It may be issued for a good likely to leave the Union temporarily on a regular basis, for use and / or exhibition in a third country (art. 10(1)). The authorities must be convinced that the holder offers all the guarantees needed for the good to return to the Union in good condition (art. 10(2)). It may not be valid for more than five years (art. 10(3)).

The general open licence is only for museums or other institutions, and only for goods in their permanent collection (art. 13(1)). It is also capped at five years (art. 13(3)). A family office cannot hold it. For a work that travels back and forth, it can hold the specific open licence, and that licence names one object.

The application needs more than a photograph (art. 6(2)). It must include documents giving all relevant information on the object and its legal status at the time of application, such as invoices or expert appraisals where appropriate. It also needs a duly authenticated photograph or, where the authorities see fit, black and white or colour photographs of at least 8 cm by 12 cm. The authorities may ask to see the goods (art. 6(3)), and the applicant pays any costs of these steps (art. 6(4)).

Where the licence is used is a separate question from where it is obtained. The licence is valid throughout the Community (art. 2(3), Regulation 116/2009). It must be presented with the export declaration at the customs office competent to accept that declaration (art. 4). A Member State may limit the number of customs offices that handle these formalities (art. 5). The customs office checks that the goods match the licence, and that box 44 of the export declaration refers to it (art. 12, Implementing Regulation). Where a written declaration is required, the licence is attached to copy 3 of the single administrative document. In that case it also travels with the good to the customs office at the point of exit.

The carnet rests on the Convention on Temporary Admission, made at Istanbul on 26 June 1990 under the Customs Co-operation Council and in force since 27 November 1993. Each Contracting Party undertakes to grant temporary admission to the goods specified in the Convention’s Annexes (art. 2(1)). It is granted with total conditional relief from import duties and taxes, and without import restrictions or prohibitions of an economic character, except as Annex E provides (art. 2(2)).

Annex A covers the carnet itself. Temporary admission papers are an international customs document accepted as a customs declaration. They identify the goods and include an internationally valid guarantee for import duties and taxes (art. 1(a), Annex A). An ATA carnet is temporary admission papers used for goods, excluding means of transport (art. 1(b)). Each Contracting Party must accept them in place of its national customs documents, and as security for the sums in Article 8 (art. 2(1)). Article 2(1) ends with the words that decide this whole move: “for goods temporarily imported under the other Annexes to this Convention which it has accepted”.

Three provisions set the clock. Issuing associations may not issue papers valid for more than one year from the date of issue (art. 5(1)). The period for re-exporting the goods may never exceed the validity of the papers (art. 7). Once a carnet is issued, no item may be added to the list of goods on the back of the front cover or on any continuation sheet (art. 5(3)). A work left off the general list when the carnet was drawn up cannot be added later.

The guarantee makes the document work, and it has a cap. Each guaranteeing association undertakes to pay the customs authorities of its own Contracting Party the import duties, taxes and other sums due if the rules are breached (art. 8(1)). The association is liable jointly and severally with the persons who owe those sums. For an ATA carnet, its liability may not exceed the import duties and taxes by more than ten per cent (art. 8(2)). Customs may never demand payment if no claim was made against the association within a year of the carnet’s expiry (art. 8(4)).

Proof of re-export must be a document. It is the re-exportation counterfoil, completed and stamped by customs in the territory of temporary admission (art. 10(1)). Even after the papers expire, customs may accept details entered by another Contracting Party, or any other documentary proof that the goods are outside the territory (art. 10(2)). They may then charge a regularization fee (art. 11). The guaranteeing association has six months from the date of the claim to provide that proof (art. 9(1)(a)). A deposit or provisional payment becomes final three months after it is made (art. 9(1)(b)).

Four articles of the Convention govern the ending. Temporary admission normally ends with re-export (art. 9). It can also end by moving the goods to a free port or free zone, a customs warehouse, or customs transit, for later export (art. 12). The competent authorities must agree. It can end by clearance for home use where circumstances justify it and national law allows (art. 13). Customs may grant a longer period than the Annex provides, or extend the first period (art. 7(2)). The re-export requirement is suspended during a seizure, unless private persons brought the seizure (art. 7(3)).

When a state signs, ratifies or accedes, it must name the Annexes it accepts. It must accept Annex A and at least one other (art. 24(4)). It is then bound only for goods in the Annexes it has accepted (art. 2(1)). Treating a carnet as general permission to import anything temporarily is the most expensive mistake in this move.

All six chose Annex B.1 as their other Annex: goods for display or use at exhibitions, fairs, meetings or similar events. Its Article 1 defines an event. It covers an exhibition or meeting organised mainly to promote any branch of learning, art, craft, sport, or scientific, educational or cultural activity. It expressly excludes exhibitions organised for private purposes in shops or business premises to sell foreign goods. So a selling show in commercial premises is outside the Annex.

Two provisions of Annex B.1 govern the work once it is in. While the relief applies, the goods may not be loaned or used in any way for hire or reward, or removed from the place of the event (art. 3). The law of the country of temporary admission can allow otherwise. The re-export period is at least six months from the date of temporary admission (art. 4(1)). Goods to be shown or used at a later event may stay, under that territory’s conditions, if they are re-exported within one year of temporary admission (art. 4(2)).

Annex B.5 is the one people expect to use, and none of the six has accepted it. It covers goods imported for educational, scientific or cultural purposes, with a re-export period of at least twelve months (art. 5). The goods must be owned by a person established outside the territory and imported by approved institutions in reasonable quantities. They must not be used for commercial purposes (art. 3(a)). Its Appendix III gives an illustrative list of other goods imported for educational, scientific or cultural activities. It names only two: costumes and scenery lent free of charge to dramatic societies or theatres, and music scores lent free of charge to music theatres or orchestras.

At 25 November 2020 the Convention had 72 Contracting Parties and thirteen Annexes in force. The European Union had accepted all thirteen. Each of the six Gulf states has two, and each accepted the second with reservations.

This changes the shipping structure itself. A private collection moving to a residence, a store or a warehouse in any of the six falls outside every Annex they have accepted, so a carnet cannot cover it. The carnet serves an exhibition, and Annex B.1 covers it for six months.

A carnet also needs a guarantor in the country of entry. Article 8(1) of Annex A refers to the guaranteeing association of the Contracting Party where it is established. The papers must name the countries or customs territories where they are valid, and the guaranteeing associations there (art. 6). The International Chamber of Commerce keeps that directory through its World Chambers Federation. It lists the ATA Carnet system in approximately 80 countries and customs territories. Under Africa and Middle East it names Bahrain, Qatar, Saudi Arabia and the United Arab Emirates, each with its chamber. Kuwait and Oman are Contracting Parties to the Convention but are missing from that directory.

The six share one customs law. The Common Customs Law of the GCC States was adopted at the 20th Session of the Supreme Council in Riyadh on 27 to 29 November 1999. At its 21st Session in Manama, the Supreme Council made it binding on all GCC customs administrations from January 2002. The edition of January 2003 contains the Law, its Rules of Implementation and Explanatory Notes. The Arabic text is the authentic, binding version.

Goods are admitted temporarily without customs duties and taxes, on the conditions in the Rules of Implementation (art. 89). This is subject to that chapter, the Unified Economic Agreement of the Council countries and other applicable international agreements. Article 90 lists eight grounds on which the director general may grant temporary admission. Three can cover a work of art: items for playgrounds, theatres, exhibitions and similar events; commercial samples for exhibition; and other cases that require it. None of the eight names a private collection, and the last of the three is left to discretion.

Article 90 also sets the ending. The goods must be re-exported, or placed in the free zone, customs offices or warehouses, within the temporary admission period set by the Rules. Goods released under temporary admission may be used, allocated or disposed of only for the purposes they were imported and declared for (art. 92). Any shortage pays the customs duties in force at the time of admission (art. 93). The Rules set the practical conditions and the guarantees required (art. 94).

The Rules set the period. Goods under Articles (89) and (90) may be placed under temporary admission for six renewable months, with customs duties suspended (Article (2)(a)). The duties, and any others, are secured by a bank or cash guarantee, as circumstances require and at the director general’s discretion (Article (2)(b)). The procedure ends in one of three ways, following the director general’s procedures (Article (2)(c)). The goods are re-exported outside the state, or deposited in free zones, customs warehouses or stores. Or they are released for home consumption and the duties are paid.

The two clocks do not match. The carnet may run for a year from issue. The GCC admission runs six months at a time and can be renewed. Whichever ends first sets the date the work must move. And Article 7 of Annex A puts the carnet’s own expiry above any longer period a customs office might otherwise allow.

Each State sets up free zones by its own legal instrument, and the minister or competent authority sets the rules by resolution (art. 77). Subject to Articles 79 and 80, any foreign goods, of any kind or origin, may enter free zones and duty-free shops free of customs duties and taxes (art. 78(a)). They may leave the same way, for abroad or for other free zones and duty-free shops. Article 78(c) matters most to a collection with nowhere to go: goods in free zones and duty-free shops face no limit on how long they stay.

The zone is still under customs control. Imported goods listed in the cargo manifest may enter a zone only with the director general’s approval, under his conditions and controls (art. 79). Goods may move from one zone to another, or to stores or warehouses, only under the securities, undertakings and procedures he sets (art. 83). Customs may inspect in the zones, review documents and examine goods where smuggling is suspected (art. 81). The Administration may require a list of all goods brought in or taken out (art. 82).

Leaving the zone for the country counts as an import. Goods taken from free zones to the customs office are treated as foreign goods (art. 85). This holds even if they include local raw materials, or articles on which duties and taxes were paid before admission. Goods imported from free zones and duty-free shops into or out of the country are treated as foreign goods (art. 88). Withdrawal of goods from the zones into the country follows the applicable laws and the director general’s instructions (art. 84).

Article 80 lists goods barred from zones altogether. Check one head before routing a shipment there: goods infringing laws on commercial and industrial property rights and copyright, where the competent authorities have issued resolutions. The others are flammable goods, radioactive materials, arms and ammunition, narcotics, goods from an economically boycotted country, and goods each State bans from entry by its own list.

The Convention and the customs law meet at the free zone, and that gives the one useful ending. Temporary admission can end by moving the goods to a free port or free zone, a customs warehouse, or customs transit, for later export (art. 12, Istanbul Convention). The competent authorities must agree. Article (2)(c) of the GCC Rules says the same from the other side. For a carnet running out and a work that cannot go home yet, this is the one lawful ending. It must be arranged before the carnet expires.

A detailed customs declaration is needed to clear any goods, even goods exempt from duty (art. 47). It must follow the forms approved within the GCC framework and contain all the information needed to apply the customs laws and levy the duties.

Article 27 is where private collections tend to fail. Every customs declaration must come with a detailed original invoice (art. 27(1)). The director general or his representative may let clearance finish without the authenticated original invoices and required documents. In that case, an undertaking must be given to produce them within 90 days at most from the date of the undertaking. The value must be proved with all original invoices and documents showing it (art. 27(2)). Customs may require all documents, contracts, correspondence and other relevant papers, and need not accept everything they or the invoices say (art. 27(3)). The Administration may ask for an Arabic translation of foreign-language invoices, showing the goods in line with the customs tariff, and of other documents (art. 27(4)).

Imported goods must prove their origin under the rules of origin in the international and regional economic agreements in force (art. 25). The director general specifies which documents go with customs declarations and what they must contain (art. 48). Clearance can be completed with a required document missing, against a cash or bank guarantee or a written undertaking to submit it.

Articles 27(1) and 48 look lenient, and they only delay the problem. Both let a consignment through against a guarantee and an undertaking. The goods move. The duty to produce the paper stays, the guarantee stands behind it, and the deadline starts running on the day the undertaking is given.

Abu Dhabi Customs publishes Policy number 03 / 2018, Policy of Temporary Admission under ATA Carnet. Its first page gives its legal basis. One is Article (89) of the GCC Common Customs Law on temporary admission. The other is federal decree no. 59 of 2010, ratifying the UAE’s accession to the Istanbul Convention on Temporary Admission and its Annexes (A, B1). The decree confirms that the United Arab Emirates accepted two Annexes and no more.

Article (2) of the Policy, Controls, shortens the period. The re-export period for goods under an ATA Carnet may not exceed six months (180 days), and the carnet must not expire during that period (item 1). As in the Convention, nothing may be added after issue to the goods listed on the back of the first cover or on any attached page (item 4). The issuing association may issue a replacement carnet if the holder is expected to be unable to re-export within the original’s validity (item 5). The replacement must be presented to the department to be checked against the expired carnet, which is then cancelled.

Three more items cover what happens when something goes wrong. Under item 6, the department may ask the guaranteeing association, Dubai Chamber, to pay customs duties or other sums owed. It can do so within one year of the carnet’s expiry, in case of re-export or on breach of any carnet condition. Goods under seizure may not be re-exported, and re-export waits until the seizure ends (item 7). The department will, whenever possible, tell the guaranteeing association about the seized goods and the action taken. Customs may ask for more information on the goods’ description where there is a discrepancy or the tariff heading cannot be identified (item 8).

Under Article (3), a foreign carnet arrives with the ATA Carnet issued at origin. Air or sea imports also need a delivery order and a bill of lading, and land imports a manifest. The carnet goes to the customs centre showing value, quantity, description and origin. The centre checks that every field is complete, including the guaranteeing association’s accreditation and the holder’s signature. Goods are inspected and examined according to risk criteria. The centre then stamps the counterfoil, fills in fields 1 to 8 of the import counterfoil, issues the temporary admission card and releases the goods.

For anyone arriving without a carnet, Dubai Customs sets out the alternative for exhibition goods brought by travellers. The documents are the original invoice, the certificate of origin and the packing list. They go with an authorisation or official letter from the exhibition organiser confirming participation, and a detailed list of all goods coming in for display. Such items are charged 5 per cent of their CIF value. Goods imported under an ATA Carnet follow carnet procedures, with no bonds, no customs duty and taxes, and none of the normal customs procedures.

Owners expect to find artworks on Abu Dhabi’s table of restricted and banned commodities. The table covers live animals and animal products, pesticides and fertilizers, agricultural amendments and seeds, weapons and ammunition, and fireworks and explosives. It lists food products, communication devices and GPS, and industrial equipment and machinery. It also covers vehicles and tyres, pharmaceutical products, publications and recorded media and photographic and cinematic products, rough diamonds, radioactive materials and electronic cigarettes. Each item sits against the ministry or authority that approves it. Antiquities, artworks and paintings are absent. Photographic and cinematic products are on it, against the UAE Media Council.

In Qatar, the General Authority of Customs has completed the requirements for applying the Istanbul agreement on temporary entry, in cooperation with Qatar Chamber. It did so by launching the ATA carnet as a customs document and an international guarantee of due customs duties. The carnet operates in Qatar on that basis.

ArtisDomus works through five steps, in this order.

The same pattern sits behind all five. The European licence is a document about an object and its history. The Gulf admission is a document about a consignment and its dates. Both are answered from the inventory. It must record when a work was made, what it is worth today, where it lawfully stood in 1993 and what it will do on arrival. An inventory that records only what the work is cannot answer either. The French leg of the same move, with the certificate and licence needed before anything is packed, is covered in moving a collection from France to the UAE.

A summary of the law. It is not legal or tax advice.