As one barrier to the mobility of museum collections is removed with the Australian Government’s recent move to provide immunity legislation, another rears its head in the form of a policy change from Australian Customs that sees the costs skyrocket for lending and borrowing museums.
It has been long recognised that the mobility of museum collections is important for many reasons, not least of which are the opportunities for furthering research, the possibility of flushing out issues relating to title and provenance, the development for high level diplomatic opportunities, and of course, the positive economic impact of staging major exhibitions.
On 14 March 2013 the Australian Federal Government passed the Protection of Cultural Objects on Loan Act (2013). The purpose of this Act is to ‘encourage the loan of objects for temporary public exhibition in Australia and for related purposes’. In essence this law provides comprehensive immunity from seizure and immunity from suit for objects on loan for exhibition in approved Australian museums and galleries. It is a legally complex Act and contains exceptions to its coverage so it will take time for the museum community to fully grasp. The operational detail of the immunity scheme will become more apparent when the regulation, that is currently being drafted to supplement the Act, is released and the process for institutions to access the immunity is set up.
Gaining the ability to provide immunity is a huge step that keeps Australia in line with other countries that work to promote mobility of cultural collections as a priority but it is not the only legislation in the equation. A recent decision by Australian Customs has sent the costs associated with customs clearance for international multi lender exhibitions skyrocketing and also threatens to undermine the efforts of museums in New Zealand and other overseas countries to borrow from multiple Australian lenders for their own exhibitions.
Australian Customs policy decision to enforce existing legislation about cargo reporting and customs clearance has been outlined in Australian Customs Notice No. 2009/47 – Definition of ‘consignor’ and ‘consignee’ and Compliance Approach for the purposes of reporting cargo:
Customs and Border Protection (CBP) requires cargo reporters to report all goods they have arranged to be carried to Australia. Cargo Reporters are obliged to report a separate cargo report for each consignee/consignor combination.
This is a significant change from the current museum practice of reporting objects from multiple lenders on one customs import/export report. As such it creates substantial cost implications for museums who want to consolidate shipments to control the freight, customs and packing costs for multi lender exhibitions and tours.
In practice this means a shipment of works from five international lenders that was previously shipped into Australia using one Airway Bill (freight ticket) and one import lodgement will now require the following:
- Five incoming Airway Bills, one for each lender, that each incur a cost to be created;
- A fivefold increase in fees for each of the following: Import clearance and lodgement, customs brokerage to lodge the imports, AQIS inspection, and import Terminal Documentation Fees because each of these costs is paid per Airway Bill;
- An increase in transhipment supervision costs at certain transhipment ports such as Dubai where the Airport Security charges per Airway Bill, regardless of whether the shipments are on the same flight and pallet;
- Five outgoing Airway Bills (in the country of origin the freight must be documented in the same way for re-entry as the original departure);
- A possible increase in air freight rates (smaller amounts of freight per Airway Bill can attract higher rates);
- An increase in fees associated with obtaining Export Declaration Numbers for the return export;
- Five-fold increase in export Terminal Documentation Fees; and
- Possible increase in crating costs (consolidated packing of multiple lenders works is not possible).
In addition to these costs Australian Customs have also announced a threefold increase in import declaration fees.
The Art Gallery of New South Wales and Global Specialised Services have analysed the impact of these changes using a recent incoming multi-lender international exhibition, Francis Bacon: Five decades, as an example and has found that the increased costs for customs entry for the 35 international lenders would represent over a 230% increase in customs clearance costs (not factoring in freight and supervision cost increases).
The problem is not just confined to international multi lender exhibitions but will effect museums that buy international exhibition packages that contain objects from multiple owners. The costs involved in this situation begin to spiral up particularly if multiple shipments are used to transport the exhibition. To give an example, an exhibition containing material from four lenders that is transported in six shipments could mean that as many as twenty four Airway Bills (instead of the previous six Airway Bills) need to be issued if material from each owner travels on each flight. The answer to this particular scenario is not as simple as deciding to put one owner’s material on one flight – often issues of size, packaging and value preclude this from happening.
It is important to note that Australia’s main international lending partners in Europe, the UK and the US do not operate with customs procedures that require a single Airway Bill per lender. So the situation begins to look particularly bleak when considering the broader implications for touring exhibitions. Any multi lender/owner exhibition, regardless of where in the world it is developed, that is toured to an Australian venue may see the tour organiser having to consider whether all international movements of the exhibition should be handled on a one Airway Bill per owner basis so that they can comply with the import/export requirements of Australia. The costs associated with this could see Australian museums at a distinct disadvantage when being considered as a tour venue for major international touring exhibitions.
The impact of these changes on Australian museums sending multiple loans to venues overseas would attract the same multiplication of fees. There is already a perception in international museums that Australia is expensive to borrow from because of its geographic distance, and this would be further compounded by having to pay the costs associated with issuing a single Airway Bill per lender.
This policy change hinders the ability of Australian museums to borrow internationally and puts Australian museums at a further disadvantage in their efforts to contribute to exhibitions in the international arena. Clearly the specific needs of the museum community have not been considered in this policy change. As an industry we need to move to seek an exemption on the basis that this policy stifles the mobility of museum collections, and will impact on the number of loans that museums can borrow for international exhibitions. Using the recent Protection of Objects on Loan Act we can cite bipartisan governmental support for increased cultural collection mobility and acknowledged recognition of the value of cultural tourism to Australia.
In approaching Australian Customs the museum industry needs to request that museums be allowed to continue the practice of shipping artworks from multiple lenders on one Airway Bill. Currently the Airway Bill lists an approved Fine Art agent as the shipper and the names of individual lenders are then declared on the Customs lodgement. The information about the lenders is provided to Customs in advance of the shipment arriving because all Australian museums lodge their information as part of the process to pre clear their shipments before arrival. This approach, agreed upon in a major Customs audit of the Art Gallery of New South Wales in 2009, addresses concerns raised by Customs about the importance of knowing the names/ details of individual lenders in their ability to assess security risks.
Any approach to Customs needs to reinforce that Fine Art agents are heavily vetted and regulated in each country and have to prove high degrees of compliance to become a ‘Regulated Agent’ and particularly stringent security requirements to coordinate the ‘Known Shipper’ programme that allows them to accept art for export. It is for these reasons that museums are confident that this is the appropriate agent to represent the lenders on the Airway Bill.
Finally the industry needs to suggest to Customs that an exemption to this policy could be triggered by the ABN of an approved museum (similar to the current trigger process whereby the submission of a museum’s ABN alerts Customs that the importer is registered for GST deferral which allows any GST to be settled when submitting their BAS return).
So it is ‘game on’ for another round of governmental lobbying to remove the most recent barrier to the mobility of museum collections into and out of Australia. In the meantime check with your transport agent about changed cost implications for your upcoming international projects.
Download or view online at: www.comlaw.gov.au/details/ C2013A00012
By Charlotte Davy, Senior Manager, Exhibitions at the Art Gallery of New South Wales