What are the consequences of the new Digital Second-hand Dealers Register for the art trade?

Will art dealers now have to be more concerned with administration than with their trade because of the Digital Second-hand Dealers Register? And what does this mean for the rest of their administration?

The Digital Second-hand Dealers Register (DOR) has caused quite a bit of turmoil in the art world in the Netherlands. Though this register is not yet in place all throughout the Netherlands, in more than half of the municipalities, including the four big cities, it is mandatory. A new legislative proposal makes this system mandatory nationwide. What does this register entail? Who does this system apply to and which objects must be registered? What does it add to existing registration duties?

The Digital Second-hand Dealers Register is part of an online system to prevent receiving stolen property and money laundering. The basis of this scheme is the website stopheling.nl which currently lists over 1.7 million stolen items. The Digital Second-hand Dealers Register is linked to this website. If a trader enters an object in the register and it matches a stolen object, the police are automatically notified of this.

The most important change for traders is that registration must be made online. As the register works with predefined categories, it is wise to see if these categories can also be used for the art dealer’s own inventory. This will prevent extra work. The currently existing reporting obligation for traders in second-hand and unregulated goods will also be digitised through the Digital Second-hand Dealers Desk (DOL). Works of art count as unregulated goods. Nationwide, traders will now also have to keep an object for five working days.

Will there only be extra work? No. The registration obligation that currently applies to everything a trader or collector receives will be restricted. This is because the registration obligation will only apply to objects:

1. that have a certain value,
2. that are known to be stolen regularly, and
3. that can be identified.

It is also planned to abolish the sales register that is mandatory in some municipalities.

Digital Second-hand Dealers Register

Who must register objects?

Anyone dealing professionally in second-hand and unregulated goods. This includes works of art in general. Private individuals operating only on a sales site will generally not have to register objects. Please note: Sometimes the line between a collector with a dynamic collection and a trader cannot be drawn sharply.

In which cases?

The registration obligation applies when objects are bought, but also if they are taken on consignment, received in pledge, or accepted for auction by the trader. The goods must be registered immediately upon arrival, even if there is a queue behind the seller or if it concerns a collection that comes in all at once.

Which objects?

Currently, there is an obligation for art traders to register which goods they have purchased or in stock. The new laws and regulations require them to do this administration digitally from now on, but does limit the number of objects that must be registered.

To determine which objects fall under the registration obligation, the definition from the European Council Regulation on the Export of Cultural Goods is used. However, there are a few significant differences. For example, there are no restrictions for hand-made works of art, such as paintings, drawings and sculptures as regards the age and value of the work of art. They all have to be registered. This way, it can be prevented that stolen works of art are not included in the registration obligation because they are offered just below the threshold and investigating officers do not have to estimate the value.

On the other hand, the age limit from the regulation for “original engravings, prints, serigraphs and lithographs with their respective plates and original posters” and for books “more than 100 years old” will be raised to “before 1800”, unless the work is unique. And because of the abominable quality of much nineteenth century paper, works will increasingly be unique. Complete archives – but not individual records –,  collections of fauna, flora, minerals and anatomical parts, and the category of other antiquities are also excluded from the registration obligation. Please note: musical instruments, precious stones, jewels, jewellery, timepieces and metal objects do fall under the registration obligation, even if they are not cultural goods.

Which information

The following data must be recorded with regard to the objects and transaction to be registered:

1. Last name, first name, date of birth and address of the seller or the person who has handed over the object.
2. Type and number of the identity document. N.B. The citizen service number may not be recorded.
3. Date of purchase or arrival.
4. Detailed description of the object and one or more pictures where it is clearly visible. The register was made for goods with serial numbers, but these are usually missing from works of art.
5. Purchase price or other conditions under which the good was bought or received.

Only investigating officers (police and special investigating officers) can access all data from the register. Traders can only access their own data. Four years after the registration, the data will be deleted.

Reporting obligation for buyers and traders

Anyone wishing to make the trade in second-hand and unregulated goods – including art objects in general – their profession or habit is now required to report their business to the municipality within which they intend to do so. The legislative proposal will not change this. What changes is that it is now required to report digitally nationwide. This way, it will be prevented that thieves and receivers of stolen goods can divert to other municipalities with less strict supervision.

The reporting obligation is performed through the Digital Second-hand Dealers Desk (DOL). Here, the trader must provide the following information within three days of the commencement of the work:

1. Last name
2. First names
3. Private address
4. Company name
5. Company address
6. Company e-mail address
7. Chamber of Commerce numbers

The term of three days also applies to reporting changes and the termination of the profession or the business.

Only municipal officials in charge of supervising buyers and traders in second-hand and unregulated goods have access to all the information of the Desk. Traders have only access to their own data. If they terminate their business, the data will be destroyed.

Stopheling.nl

The cornerstone of the registration system is the linking of the Digital Second-hand Dealers Desk and the Digital Second-hand Dealers Register with the database stopheling.nl. This database of objects is publicly accessible. So, if someone offers you something you can immediately check whether the object is included in the database.

The data from the DOL and the DOR will not be included in this database. However, the police will be notified immediately if an object from stopheling.nl matches a registration in the DOR. It is not completely clear to us how smoothly this will run for objects without serial numbers, but the minister has assured the House of Representatives that it can be filled in unambiguously. The example given, a “picture” that can only be entered as “painting” is rather simple however. How does it work with techniques that are not included in the system and with mixed media? And how do a layman reporting and the official recording the report tell an etching, engraving, woodcut and reproduction apart?

Retention obligation

The legislation proposal also equalizes the period during which the trader must keep an object all throughout the Netherlands. Currently, this period differs per municipality from three days to two weeks. From now on, a trader has to keep all objects that fall under the registration obligation for five working days. This term starts to run when the good has been registered. This way, investigation officers (police and special investigation officers) get the opportunity to investigate the provenance of the goods. If this term is too short, it can be extended by a maximum of two weeks.

This will mainly be the case if objects are hard to identify. Our estimation is that an art dealer will be faced with this more often than a buyer of electronic devices with a type and serial number. During this term, objects may not be sold, even if the delivery is scheduled after this term.

No more sales register

Many municipalities currently require to also record the details of a sale. However, the government has not included the sales register in the legislative proposal for privacy reasons. Moreover, such a register adds nothing to the fight against receiving stolen goods and money laundering. A practical consequence has been drawn from this. The government will ask the Association of Dutch Municipalities to drop the sales register from the model General Police Regulation. It is likely that municipalities will adapt their own regulations accordingly.

Focus points

• Check whether the DOL and the DOR are already mandatory in your municipality.
• Ensure that your registration is ready for the DOR. This means not only your registration must be made digitally, but also that the descriptions must fit the categories of the register. This will prevent double work.
• Keep an eye on whether your municipality is indeed dropping the compulsory sales register.

Art lawyer

Do you have any questions about the new registers? Do you want to know which objects you should or should not register? Or are you looking for legal assistance in art purchases and sales in general? The specialists at Russell Advocaten will be happy to help you. Please contact us: