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Artist's Resale Royalties: Unveiling Global Disparities in the Global Art Market

In the dazzling world of public auction sales, an artist's name can reverberate far and wide, echoing as the pinnacle of artistic achievement. Yet, amidst the glittering headlines proclaiming record-breaking sales in the millions of dollars, a lingering silence envelops a critical aspect - more often than not, the artist remains financially disconnected from the spectacle.

For example, in recent news, the artist Julie Mehretu (b. 1970, Ethiopia) made headlines with her painting, "Walkers With the Dawn and Morning" (2008), realizing a sale value of $10.7 million at Sotheby's New York Fall auction. Even though this sale positions Mehretu's work as the most expensive artwork ever sold by an African-born artist at auction, it's noteworthy that she, like many artists in the USA, receives zero royalties from such sales due to the country's laws.

In unraveling the intricacies of this dilemma, we delve into the fascinating realm of Artist's Resale Royalty Rights, exposing a tale of financial inequity within the global art market.

Artist's Resale Right Explained

The artist's resale right, also referred to as droit de suite, guarantees creators the ability to earn a fair share from the resale of their works. It is a royalty paid to visual artists when their works are resold by an auction house or gallery above a specific price. The royalty is a small percentage of the resale price, varying from country to country and normally depending on the work's sale price. The need for the artist's resale right became apparent in 1920 when a collector made a significant profit from the sale of Jean-François Millet's painting "The Angelus," leaving the artist's family in extreme poverty. The first resale rights law was enacted in France as a response to such inequities.

The Global Landscape

A Directive of the European Union passed in 2001 required all EU countries to implement the resale right. This was a significant step towards the global recognition of the right, which now exists in more than 70 countries worldwide, such as Mexico, Brazil, and Morocco, to name a few. However, the fact that it has yet to be implemented in some countries, including major art markets such as the United States and China, remains a significant hurdle for visual artists worldwide.

Visual Artists' Challenges in the USA

For artists in the United States, particularly those whose works command millions at auction, the prospects of benefiting from resale royalties remain disheartening. Historically, California stood as the sole state championing artists' rights in this arena, with a law allowing artists to claim a percentage when collectors resold their artworks at auction. However, a significant turning point occurred in 2018 when a US Court ruling blew artists' hopes. The Ninth Circuit, in a decisive move, asserted that US Copyright law supersedes the 1977 California Resale Royalties Act (CRRA). This California law, initially groundbreaking, mandated the payment of royalties to artists, equating to five percent of the resale price under specific circumstances. The CRRA's jurisdiction extended only to works sold in California or those sold by a California resident, sparking debates about its potential impact on the state's art market dynamics. Nonetheless, the court ruling closed the chapter on the CRRA's efficacy, leaving US artists with limited recourse for claiming their rightful share of the burgeoning art market.

ARR in the UK

In the UK, the Artist's Resale Right (ARR) was implemented in 2006 and extended in 2012 to benefit the artist's beneficiaries after their death. The duration of ARR in the UK aligns with copyright, lasting the artist's lifetime plus a further 70 years. ARR royalties, prescribed by law as a percentage of the overall sale price on a sliding scale from 4% to 0.25%, provide artists with a fair share of the increased value of their works over time. However, ARR faces limitations, especially in countries like China and the US, where it is not recognized, hampering the potential income for artists globally.

How Much and When

ARR royalties are determined by law, ranging from 4% to 0.25% based on the sale price, capped at €12,500. The royalty applies when the work is resold for more than €1,000 on the secondary market through art market professionals. The involvement of dealers, galleries, or auctioneers triggers ARR, providing artists with compensation for sales in the art market.

Final Thoughts

In an industry worth billions of dollars, artists deserve to be compensated each time their artwork is resold at auction. Just like all other creatives in the industry, such as musicians, composers, lyricists, actors, playwrights, and screenwriters who receive royalties for subsequent productions, performances, or sales, visual artists deserve the same laws to allow them to be paid for the profit made from their creations. If artists get to enrich the lives of others, why can collectors share the wealth and enrich the lives of the living artists after selling their work? 


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