Offence of dealing in unlawfully exported cultural property

Cultural Property (Armed Conflicts) Bill [Lords] – in a Public Bill Committee at 2:00 pm on 15 November 2016.

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Photo of Kevin Brennan Kevin Brennan Shadow Minister (Culture, Media and Sport) (Arts and Heritage) 2:00, 15 November 2016

I beg to move amendment 7, in clause 17, page 8, line 12, leave out

“or having reason to suspect”.

With this it will be convenient to discuss amendment 1, in clause 17, page 8, line 12, leave out “having reason to suspect” and insert “believing”.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Culture, Media and Sport) (Arts and Heritage)

It is a great pleasure to serve under your chairmanship, Mr Turner. You missed an exciting sitting this morning, when the Committee Room was fizzing with debate on all sides—I am sure that it will be the same this afternoon. It is appropriate that you should be in the Chair, because I know that, as well as representing the Isle of Wight and its great cultural treasures, as you do so assiduously, you are originally from Coventry. The subject of the Bill was initially born of the experiences of world war two, when the cultural treasures of cities across Europe, such as Coventry and Dresden, were destroyed terribly by bombing. I am sure that the Bill will be close to your heart, and it is therefore appropriate that you should be chairing proceedings this afternoon.

Along with amendment 7, which was tabled by my hon. Friend the Member for Tooting and me, we are discussing amendment 1, which was tabled by the hon. Member for Kensington, who I am sure will want to speak to it in due course. We are all trying to tease out from the Government exactly what they are trying to achieve with this part of the Bill and what the practical effect of clause 17 will be on people who are dealing in cultural items when they have to operate under the Bill’s provisions.

Amendment 7 is another probing amendment, because we want further clarity on the Government’s intention. It proposes removing the phrase

“or having reason to suspect” from the clause, which is on the offence of dealing in unlawfully exported cultural property. Some concern has been expressed about that particular phrase because of the so-called mens rea—I understand that is what lawyers call it—meaning the intention of someone accused of committing a criminal act of some sort. Would having that phrase in the clause affect honest people who are simply trying to do their job? Will the clause achieve what the Government undoubtedly intend it to achieve, which is to unambiguously target those with criminal intent?

Labour Members are supportive of the Bill, but as it stands the clause creates concerns that there would be a risk that a dealer or auction house might face a criminal prosecution when conducting what they would describe as honest due diligence.

Photo of David Burrowes David Burrowes Conservative, Enfield, Southgate

As I am a lawyer, anyone who mentions mens rea will make my ears prick up and get me excited after lunch. The shadow Minister mentioned the need to consider the practical effect, which is the important issue. Will he give an example of the practical effect that goes to the heart of both his amendment and that tabled by my hon. Friend the Member for Kensington and that would not be dealt with already, not least under the sanctions orders that cover Iraq and Syria, which are already having practical implications?

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Culture, Media and Sport) (Arts and Heritage)

I am very interested to hear what gets the hon. Gentleman excited after lunch, or indeed at any time of the day. To answer his point, I am sure he is anticipating what the Minister might say in response, but I shall rehearse the issues a little as I go through my remarks. It is important that we get these points on the record and air the concerns of those outside the Committee so that the Minister has an opportunity to respond. As I said, this is a probing amendment. At the end of our debate we will withdraw it, because we have sympathy with the point that the hon. Member for Enfield, Southgate makes. However, I want to ensure that the concerns expressed to us in representations are on the record and have been rehearsed.

Although a conviction might ultimately be avoided, no one wants to take a chance on the possibility of people being prosecuted, with all the reputational damage and cost that could be involved. Concerns have been expressed that the result could be to turn legitimate sales away from the UK, impacting upon the future success of the art market, which is a large industry in this country. It depends, crucially, on persuading sellers throughout the world to use the UK’s services. The British Art Market Federation states that its members

“are committed to conducting due diligence on artworks before they are sold. This may involve written evidence of provenance, consultation where necessary with external bodies, including databases of stolen objects and inquiries of the vendor.”

It goes on to argue:

“It is rare, however, that an artwork, particularly an older one, has an unbroken chain of provenance going back to the time it was created. It is also rare that there is comprehensive documentary evidence to support provenance, particularly the further back in time it goes.”

Often that evidence has been lost or perhaps never existed in the first place, as it may have been considered unnecessary at the time.

The retention of documents or records has assumed greater importance in recent years, as more and more claims have been made for the restitution of works of art that were looted during the second world war. Until relatively recently, owners rarely retained copies of export licences. As I understand it, the practice was that they were surrendered to customs authorities at the time of export. Even the authorities themselves did not retain such records beyond a limited time. I am told that objects that were legitimately exported many years ago, even from the UK, routinely lack such documentary evidence that might prove the provenance.

The argument has been put to the Committee that the absence or paucity of documentary evidence does not necessarily indicate that an object is of illicit origin. Due diligence, in practice, can therefore usually come down to trying to make judgments on the legality of an object and therefore whether or not it can be legally sold. As I am sure the hon. Member for Kensington will remind us, the BAMF is not the only body with a behavioural code. The Antiquities Dealers’ Association also has a code of practice that is meant to ensure that dealers buy and sell in good faith. Against that backdrop, it argues that clause 17, as drafted, could present its members with some difficulties.

It was pointed out on Second Reading that other offences dealing with crimes of dishonesty—for example, offences under the Dealing in Cultural Objects (Offences) Act 2003—opt for the phrase “knowing or believing”. Some argue that that phrase would be superior to the one used in the Bill, as there is a difference between having knowledge and acting in spite of it, and not having sought out that knowledge in the first place. Current principles indicate that under current law the former would be a criminal offence and the latter, although it would be frowned upon, probably would not meet the bar of being a criminal offence.

The BAMF argues that changing the phrasing of mens rea in the Bill to include the phrase “having reason to suspect” muddles the legal principle and could create ambiguity, and therefore the opposite outcome to the one we all want. It suggests that those who have acted criminally could be emboldened to exploit the muddled language to avoid conviction, while legitimate operators would be put off buying and selling by the potential of a criminal conviction. The issue has been raised many times during the passage of the Bill, so this is a probing amendment to understand fully why the Government have not responded and changed the wording.

From memory, the Secretary of State said on Second Reading—I will check the record when I sit down—that she would go away and consult the Minister and others to see whether the Government should take on board the concerns expressed on the Floor of the House and in the other place and then offer an amendment. I would be grateful if the Minister, when she responds, could indicate whether the Secretary of State has fulfilled that commitment and what the outcome of those discussions was.

Photo of Victoria Borwick Victoria Borwick Conservative, Kensington

It is a pleasure to serve under your chairmanship, Mr Turner. I declare an interest as president of the British Antique Dealers’ Association. I have also been advised by the British Art Market Federation, the Antiquities Dealers’ Association and LAPADA, all of which have made written representation to the Committee.

Amendment 1, which stands in my name, relates to the most important point made in the submissions from the art and antiques trade, including from the British Art Market Federation, the Antiquities Dealers’ Association and LAPADA, and from Professor Janet Ulph. I have spoken before of the need for certainty in law—a point that other colleagues have made—so that well intentioned and honest dealers and auction houses are clear as to what is permitted. That is even more important when there is the possibility of a criminal conviction. The concern is over the level of knowledge of wrongdoing required before a dealer or auctioneer can be judged to have committed a criminal offence—what I understand the lawyers call mens rea—and whether that has been expressed to an appropriate level in the Bill.

Clearly no one objects to the word “knowing” in the relevant subsection. If a dealer knows that cultural property was unlawfully exported from an occupied territory, they are guilty of an offence. The problem lies with the additional criterion for committing an offence when someone has “reason to suspect” that an item was unlawfully exported. Despite carrying out appropriate provenance checks on an item of cultural property, a dealer or auctioneer might, just prior to exhibiting it at an antiques fair or auction, receive an unsubstantiated allegation that it was illegally removed from an occupied territory, or a request for evidence that it was legally exported. The allegation might be totally groundless, but the seller, despite genuinely believing that the item had not been illegally exported, would fear that the allegation could be deemed “a reason to suspect”, and that could lead them to withdraw the item from sale. The time-dependent opportunity to sell it would be lost, and the very act of withdrawal could well damage the artwork’s future saleability.

My right hon. and learned Friend the Member for Harborough (Sir Edward Gamier), a former Solicitor General, made that point succinctly in an article in The Times on 3 November—it has been appended to the submission from the Antiquities Dealers’ Association. He wrote:

“The mere making of an unfounded allegation that an item was unlawfully exported from an occupied territory after 1954 may place in the mind of the potential dealer or auctioneer a reason to suspect that it has been unlawfully exported; and although it may later turn out to be untainted, he will not go near it.”

I also draw Members’ attention to the submission from the British Art Market Federation, which gives current examples of the issue, particularly at paragraphs 14 and 15. It states:

“An example may serve to illustrate the uncertainties created by this Bill. An old master picture that has changed hands on the legitimate open market in Europe in the past few years is sent to London for sale by auction. Due diligence is carried out and its known provenance is investigated, as is its sale history, and checks are made that it has not been stolen. The picture is then included in an auction catalogue which is published several days before the sale. An allegation is then made that it was removed from an occupied eastern European country in the 1960s. Time is necessarily short to investigate whether this is true or not. Attempts to resolve the matter beyond doubt before the auction do not succeed and even though it may well prove groundless the allegation itself represents a reason for suspicion under the terms of the Bill, as currently drafted.

Not wishing to run any risk of prosecution, the auction house has no alternative but to withdraw the picture from the auction, to the disadvantage of its owner, who at best will have to wait for another auction and, at worst, will face financial loss, as marketing it for a second time may adversely affect its value.

The rarer and more valuable a picture is, the greater risk that its successful sale will be prejudiced by a withdrawal from an auction. In time, the allegation may prove groundless but the damage will have been done.

How is the auction house or dealer to respond if an assertion is made on social media or a blog that an object may be in breach of this new law? The allegation may subsequently be proved to have no foundation, but no auction house is likely to run the risk of possible criminal prosecution, and if, as in this example, there is no time to investigate its veracity, there will be no choice but to remove it from the sale.”

I recall the Secretary of State saying on the Floor of the House on 31 October:

“It is important that we are clear that the Bill will not hamper the way in which the art market operates.”––[Official Report, 31 October 2016; Vol. 616, c. 700.]

The closest existing legislation to the current Bill is the Dealing in Cultural Objects (Offences) Act 2003, which is concerned with illegally removed archaeological material and objects illegally taken from monuments or historical structures. However, unlike the current Bill, in which the types of cultural property covered are extensive and could even include cultural property in people’s family collections, the 2003 Act does not cover works of purely artistic interest. In that Act, a person commits an offence if they deal in such cultural objects “knowing or believing” them to be tainted. For good measure, that offence also requires the dealer to have acted “dishonestly”. I understand that the Theft Act 1968 also requires the mental element of dishonesty.

As the BAMF has stated, both those existing statutes mean that a dealer with honest intent and conducting reasonable due diligence is highly unlikely to run the risk of prosecution, unless it is shown that they wilfully acted dishonestly. Although I understand that the Government have cited article 21 of the second protocol of the convention as justification for a lower level of mens rea, I draw my hon. Friend the Minister’s attention to article 15 of the protocol, which indicates that an offence has occurred if a person intentionally commits an act of theft or misappropriation against cultural property protected under the convention. Surely that suggests that an element of dishonest criminal intent is required by the convention.

For the Bill to introduce a lower threshold of mens rea would amount to gold-plating, which appears to run counter to Baroness Neville-Rolfe’s assurances in the other place that the Government intend

“to do only what is necessary to meet our obligations under the convention and its protocols.”—[Official Report, House of Lords, 6 June 2016; Vol. 773, c. 586.]

I also understand that the Government have cited the Syria and Iraq sanctions orders as examples where “having reason to suspect” is the required level of mens rea. I am not a lawyer, but I have been told that this level of mens rea is unusual as a basis for establishing criminal intent. The Syria and Iraq orders relate to clearly identified geographical locations and, by their very nature, are likely to be short-term. As Orders in Council, they were not subject to consultation and parliamentary scrutiny. They have little in common with the Bill.

For all those reasons, the words “having reason to suspect” are inappropriate. Terms such as “believing” or even “suspecting” carry greater certainty and clarity. I emphasise that this is a point of law; it does not weaken or water down the Bill. We all understand that the objective is to squarely target those with criminal intent. My hon. Friend the Member for Enfield, Southgate said that sufficient reassurance should be given to the trade in the guidance on the Bill. I do not wish to divide the Committee, so I will not press my amendment. However, I would be grateful if the Minister took those points of law into account.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon 2:15, 15 November 2016

Although I have no interest in any bodies that sell art, I appreciate the importance of art sales to this country. I would therefore like to say a few words. I have read the Second Reading debate, along with subsequent briefings from various parties. This has clearly become a contentious issue for a number of right hon. and hon. Members, and indeed for a significant section of the art market. My hon. Friend the Member for Kensington and the hon. Member for Cardiff West have set out those concerns very effectively, and I do not intend to rerun them. I note the Government’s position that this offence and the change in the criminal intent required will not in practice make a difference to the operation of the art market in the UK. I am sure that the Minister will elaborate on that point.

I appreciate the practical reality of the change in legal approach. Whatever the Minister says today, nothing will be able to stop a prosecuting lawyer advising that this is new law and that it is therefore open to be tested in the courts. Furthermore, because of the nature of the changes, there are those in the auction market and wider art market who would have concerns that the existing, accepted levels of due diligence will be threatened by the legislation, and uncertainty is always the enemy of business. The art sellers’ fear is that, as a result, Britain could lose its international pre-eminence in the art sales arena—a scenario that none of us would want to see.

I have a suggestion. When I was a shadow Minister, I scrutinised the previous Labour Government’s Bribery Act 2010, which mostly had cross-party consensus. The Act also addressed corruption. As with this Bill, we had to persuade large sections of the business community that its practical application would not disrupt their operations. The route devised to address those concerns was for the relevant Department to publish guidance. There was significant and wide consultation on that guidance, which addressed the more day-to-day, process-type decisions and due diligence considerations that could not realistically have been included in the legislation.

For example, if the famous picture to which my hon. Friend the Member for Kensington referred had been removed from a Soviet-occupied country in the 1970s—a country that is no longer occupied, of course—would it come within the Bill’s scope? Or if the same picture had been shown in a widely distributed sale catalogue for a certain period of time, would it be acceptable for an allegation of dodgy provenance to be made on social media half an hour before the sale, so that the auctioneer would stop the sale, possibly affecting the picture’s value and a possible future sale, even if the allegation was subsequently disproved? If so, under what conditions would that be acceptable? Those concerns also apply to clause 2 and what constitutes property that is important to all peoples.

By using guidance that is properly consulted on, acceptable practice norms could be established and generally supported with the buy-in of our art selling and auctioneer communities. That could address many of the practical concerns raised on this clause. I would be grateful to hear the Minister’s views on what I hope she will take as a positive suggestion.

Photo of David Burrowes David Burrowes Conservative, Enfield, Southgate

It is a pleasure to take part in the debate on clause 17, which drew a lot of attention from both Government and Opposition Members on Second Reading, as well as in the other place and among the all-party group on the protection of cultural heritage. I welcome the involvement and contributions of the Antiquities Dealers’ Association, the British Art Market Federation and others, which have drawn their expertise to the Committee’s attention in their submissions. I very much respect their concerns, amplified by my hon. Friend the Member for Kensington, about mens rea, which, as I said earlier, gets me interested.

Were one to have a blank canvas—I suppose this is an appropriate forum in which to discuss canvases—there would be an even greater weight to the argument. As a criminal lawyer, when I look across the family of dishonesty-type offences, I will plainly be looking at the state of mind. In the normal course of dishonesty-type cases, one would look to ensure that there is a subjective test that is consistent not only in terms of enabling a prosecution, but with an eye to how the judge would distinguish between or collate the subjective and objective elements in the summing up to the jury. I appreciate that everyone wants to ensure that prosecutions under the Bill are successful.

Having said all that, although I accept that there is genuine concern about the potential effect on the market, I say, respectfully, that it has been somewhat overstated. Given that we do not have a blank canvas, the idea that the implementation of the Bill will cause such repercussions on the market has been overstated. Elements of the canvas are relevant and show things working, albeit in a slightly different form. The Syria sanctions order and the UN’s Iraq sanctions order are relevant and give some texture to enable us to recognise that a precedent has been followed in relation to this particular element of the subjective and objective tests.

One can also look further afield. We can have our own views, but to give a sense of balance, if one looks at the recent written submissions to the Committee, some significant views have been brought to our attention. Mr Michael Meyer is head of international law at the British Red Cross, a respected body of international import when one is dealing with issues of international humanitarian law. In his written evidence, he makes the point that the British Red Cross is a neutral body that is keen to maintain its neutrality—the commonality of that view was shown in both this House and the other place.

In paragraph 5 of his submission, he outlines some concerns that have also been raised in this debate. He then says:

“However, it appears that, in practice, the clause should place no greater burden on dealers than already exists to conduct appropriate due diligence. In other words, the threshold of ‘reason to suspect’ is not so low as to have an adverse impact on the legitimate market, while at the same time acting as a necessary and suitable deterrent for those who may be less scrupulous. The wording is somewhat similar to that used in the existing Iraq and Syria sanctions orders. There is also very similar wording found in section 17 of New Zealand’s Cultural Property (Protection in Armed Conflict) Act 2012.”

Interestingly, the latter Act also dealt with the ratification of The Hague convention.

The written evidence from Peter Stone, the UNESCO chair in cultural property protection and peace, to whom I have referred previously, asks the Committee not to amend the Bill. He draws attention to clause 17 and prays in aid the note submitted by Professor Roger O’Keefe of University College London law school, who was involved in scrutinising the draft Bill before the Culture, Media and Sport Committee. He, too, very much supports the current wording and suggests that appropriate due diligence and legal advice can deal with concerns.

The Council for British Archaeology has already recommended to the Committee that the Bill’s drafting is adequate, as has the UK National Committee of the Blue Shield. I say that to show that there is a balance of opinion. One way of properly dealing with the suggestion that the amendments will not be pressed is by recognising that this issue is important. I recognise and value the pre-eminence of the market here, not least in London. We need to ensure that there is proper confidence, assurance and guidance, and appropriate clarity and transparency, to ensure that any chill factor or fear of a knock on the door, seizure of any artefacts and so on, will not be there. We need real clarity, so that there will not be the cost of having to get expensive lawyers on the case—I know about those. Perhaps the Minister can give some assurance on that, and recognise that there is a balance of opinion that wants to move forward and keep the drafting as it is, given that we do not have that blank canvas in place.

Photo of Tracey Crouch Tracey Crouch The Parliamentary Under-Secretary of State for Culture, Media and Sport 2:30, 15 November 2016

As always, it is a pleasure to serve under your chairmanship, Mr Turner. Welcome to the afternoon session. As the hon. Member for Cardiff West pointed out, the morning’s session was full of consensus and we moved quite swiftly through the Bill. It is a pleasure to continue this morning’s work.

Before I get into the detail of clause 17, allow me—for the second time—to answer directly the hon. Gentleman’s question, this time on consultation, which he raised about the Secretary of State and I holding further meetings. I can confirm that the Secretary of State and I have both had further meetings with stakeholders, as have officials. I am grateful for the time that others have afforded us to have further discussion on this clause.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Culture, Media and Sport) (Arts and Heritage)

The Minister also said on Second Reading—it is in column 700 of Hansard—that she would meet concerned parliamentarians. Was she able to do so, as part of that process?

Photo of Tracey Crouch Tracey Crouch The Parliamentary Under-Secretary of State for Culture, Media and Sport

I am pleased to confirm that I have had meetings with concerned parliamentarians since Second Reading, and I am sure that I will continue to do so before Report, if necessary.

The debate this afternoon has been interesting. I am grateful to colleagues for raising these issues, because it allows me as Minister to try to reassure them and other stakeholders who are concerned about clause 17.

Clause 17 creates the offence of dealing in cultural property that has been unlawfully exported from occupied territory. An offence is committed if a person deals in unlawfully exported cultural property when they do so knowing or having reason to suspect that it has been unlawfully exported. The amendments tabled to clause 17 seek to modify or remove the “reason to suspect” element. It is therefore important to explain our approach to the mental element of the dealing offence.

First, we did not develop this approach in a vacuum. The wording was developed following discussions with the police, who felt that this threshold was appropriate. Crucially, I understand that the national policing lead for cultural heritage crime remains content with our approach. Secondly, the mental element of the offence created by clause 17 is comparable to similar offences concerning cultural property implemented by the Iraq and Syria sanctions orders, which use “reason to suppose” and “reasonable grounds to suspect”. The offences created by those sanctions orders are the most appropriate comparators, as they deal with cultural objects which have come from situations of conflict. Thirdly, we know that the Bill sets a lower threshold for criminal intention—or mens rea—than other existing legislation, including the Dealing in Cultural Objects (Offences) Act 2003. However, the Government consider this to be appropriate, given that it is designed to protect a very special and limited class of cultural property that is of great importance to all people, as defined by article 1 of the convention.

As part of my discussions with concerned stakeholders in the House, I have taken representation from those with close connections to the art market. When they have been discussing issues around the difference between the mens rea in the 2003 Act and in this Bill, there was a suggestion that perhaps we should review the 2003 Act when the opportunity arises. If there is continued concern about the differences between the mens rea in this Bill and that in the 2003 Act, we will certainly look to increase the mens rea in the 2003 Act, rather than watering down the mens rea in the Bill.

To be clear, we arrived at our approach for three main reasons: first, following consultation with the police; secondly, due to the close analogy with the Syria and Iraq sanctions; and thirdly, because we are looking to protect such a small and special class of objects. We are pleased to note from the written evidence the support we have for that approach, including positive statements from academics, the British Museum and the Council for British Archaeology. I draw Members’ attention to the views set out in the British Museum’s written contribution:

“We feel it is particularly important that there is no watering down of responsibilities or requirements in the Bill. Specifically we feel that in regard to the Clause 17...it is imperative that the wording should remain ‘knowing or having reason to suspect that it has been unlawfully exported’”.

I find the museum’s views particularly compelling as its officials regularly offer their expert advice to the art market as part of the due diligence process.

My hon. Friend the Member for Enfield, Southgate stole my quotation from the British Red Cross, but it is worth repeating that it said that

“it appears that, in practice, the clause should place no greater burden on dealers than already exists to conduct appropriate due diligence. In other words, the threshold of ‘reason to suspect’ is not so low as to have an adverse impact on the legitimate market, while at the same time acting as a necessary and suitable deterrent for those who may be less scrupulous.”

I want to move on to consider the impact of our approach and explain how it will work in the real world. Reason to suspect is primarily an objective test, in that the prosecution need not show that the defendant personally suspected that cultural property was unlawfully exported—only that a reasonable person would have suspected that it was. However, the prosecution must be able to point to something that would or should have caused a reasonable person to suspect. It therefore has to be shown that the defendant was personally in possession of the knowledge that would cause a reasonable person to suspect.

A dealer who took possession of an object merely for the purpose of carrying out due diligence would not be committing an offence, as that would not be classed as dealing. They would commit an offence only if, having been through the due diligence process, they went on to deal with the object after discovering or having had reason to suspect that it was unlawfully exported. The Bill will not require art dealers to change how they operate. The art market is a self-regulated industry and the trade associations already have clear due diligence guidance and checklists in place, which they expect dealers to follow before putting an object forward for sale.

My hon. Friend the Member for Kensington and others raised concerns in the consultation in the run-up to the Bill that a phone call received or accusations published in a blog post shortly ahead of a sale could stop it from proceeding. However, those are already issues for the market, and they will not be solved by watering down our Bill. If new, convincing evidence is presented about the provenance of an object shortly before an auction, we would already expect dealers to pause and consider whether they need to undertake further due diligence. If, however, the claim is a completely false accusation with no evidence to back it up, it may be perfectly legitimate for a dealer to ignore it. Such accusations are unlikely to be considered a reason to suspect that an object has been unlawfully exported. We have listened to the concerns of the art market, but it has not provided any compelling evidence to support the idea that the Bill would create insurmountable problems for the market, or increase the amount of due diligence that it needs to undertake.

The hon. Member for Cardiff West has suggested removing “reason to suspect” altogether, which would mean that an offence would be committed only if it could be proved beyond reasonable doubt that a defendant knew that they were dealing in unlawfully exported cultural objects. That sets the bar far higher than for either handling stolen goods under the Theft Act 1968 or dealing in tainted cultural objects under the 2003 Act. I am concerned that requiring proof of actual knowledge on the part of the dealer, as opposed to reason to suspect, could actually discourage less scrupulous dealers from carrying out due diligence, and enable them to turn a blind eye to things that would cause a legitimate dealer to ask more questions.

I appreciate that the Opposition’s amendment is probing, but I was a little surprised by it, given that on Second Reading Louise Haigh criticised the threshold of the 2003 Act for being too high and seemed content with the level of mens rea proposed in the Bill. She hoped that on that point

“the Minister will stick to her guns”——[Official Report, 31 October 2016; Vol. 616, c. 736.]

The amendment would make it much harder to prosecute dealers who deal unlawfully in cultural property. That seems to me to be an extraordinary change in position; but fortunately the amendment is merely probing.

My hon. Friend the Member for Kensington has proposed amending “reason to suspect” to “believing”. Her amendment would raise the threshold for criminal liability so that proof was required of the dealer’s belief that the object was unlawfully exported. That would be seen in a number of quarters as a watering down of the Bill. The offence created by clause 17 will not have an adverse impact on legitimate dealers who have continued to operate since the Iraq and Syria sanctions came into force, but it will cause unscrupulous ones to think twice. Dealers should always be concerned to establish that any cultural object that they are asked to deal with has good and lawful provenance. The argument that this new offence will stifle the art market seems to imply that dealers are happy to risk dealing in unlawfully exported objects as long as they cannot be prosecuted. Dealers should not be taking such risks in any event; where there are question marks over provenance, they should simply not deal in those cultural objects. I would like to stress once more that the Bill should not require changes to the due diligence processes that the art market already follows.

I refer to the wise counsel of my hon. Friend the Member for Huntingdon and his experience of the issue with regard to the Bribery Act 2010. I confirm that the Government are committed to updating the guidance available to all stakeholders in this Bill. We stand ready to work co-operatively with the art market to ensure that all dealers understand their roles and responsibilities. That could if necessary include consultation before the guidance is issued, if that is helpful. I hope that reassures hon. Members and that the hon. Member for Cardiff West feels able to withdraw the amendment.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Culture, Media and Sport) (Arts and Heritage)

I thank the Minister for her response. I confirm that amendment 7 is a probing amendment. She quite rightly picked up on the summing up that my hon. Friend the Member for Sheffield, Heeley made on Second Reading. This is an important issue and the debate has been useful, and a probing amendment is a useful vehicle for a debate. The Minister just mentioned the hon. Member for Huntingdon, and it is useful to have on the record her commitment on the guidance.

Several extended metaphors have been used during our debate. The hon. Member for Kensington talked about gold-plating. I do not think anything that is gold-plated is covered in the Bill; it might not be of sufficient cultural importance. [Interruption.] I have at last provoked a reaction from my hon. Friend the Member for Rhondda, who insisted that he would take no part in today’s proceedings. He did comment from a sedentary position that it was a rather extended metaphor about the blank canvas. Of course, we want to make sure that nobody gets framed.

One of the many interesting things that the Minister said was that the Government are considering increasing, or strengthening, or decreasing the mens rea, whichever way round it is. I do not know the correct phrase; I am not a lawyer.

Photo of Tracey Crouch Tracey Crouch The Parliamentary Under-Secretary of State for Culture, Media and Sport

I said that we would be happy to consider doing that, if the art market and stakeholders were interested in making sure that the Bill and the 2003 Act were more aligned.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Culture, Media and Sport) (Arts and Heritage)

I will not get into a discussion on the difference between being happy to consider something and considering something, much though I would enjoy that. I will rephrase: the Minister confirmed that she would be happy to consider changing the threshold in relation to the 2003 Act.

The Government’s position is quite interesting. There has been only one successful prosecution and conviction under the 2003 Act, in May this year; somebody was convicted after having gone around historical churches across the country and stolen Bibles, statues, friezes and even two 15th century oak panels in Devon. They pleaded guilty to 37 offences of theft under the 2003 Act and received a three-year sentence. However, the Government were keen to say on Second Reading—this is how I understand their position—that that in no way reflects the Act having too high a threshold for prosecution, and that it might in fact be a result of the Act acting as a deterrent. I do not believe that. I think that if people are being prosecuted, it is under the Theft Act 1968 or other Acts relating to these sorts of offences.

The Minister is right to consider looking at the 2003 Act again in conjunction with the market, because if there is a bumpy playing field, it may well create perverse incentives when it comes to which laws are used to prosecute people who carry out these offences. It has been helpful to discuss the issue. This was a probing amendment, and I beg to ask leave to withdraw it.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss new clause 3—Cultural property: duty to provide information—

‘(1) Auctioneers and traders within the United Kingdom shall have a duty to provide buyers and potential buyers of items of cultural property (including antiques, cultural artefacts and artworks) with information to enable buyers and potential buyers to decide whether the item has been unlawfully exported within the meaning of section 17 of this Act.

(2) The Secretary of State may make regulations specifying the nature of the information to be provided under subsection (1).

(3) Regulations under this section—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.’

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Culture, Media and Sport) (Arts and Heritage)

It is me again, I’m afraid, Mr Turner. Hopefully we will be able to get through our proceedings fairly expeditiously this afternoon. I will make some brief remarks on the clause before I turn to new clause 3.

To return to what we were just discussing, the Bill’s focus on preventing the illegal exportation of cultural property from occupied territories is certainly vital, and we very much welcome that. Daesh, which sometimes calls itself ISIS, has set up a so-called ministry of antiquities. If ever there was a perverse use of that terminology or an example of Orwellian newspeak on stilts, that is it, because that body exists simply to turn cultural property into income streams for that terrorist organisation by exporting and selling stolen precious items abroad. We have discussed the concerns regarding the phrase “reason to suspect” in clause 17(1), so I do not intend to rehearse those points.

New clause 3, which stands in my name and that of my hon. Friend the Member for Tooting, aims to ensure that the art market produces and keeps records necessary to determine whether an item has been illegally exported. Once again, it is a probing amendment, but we want to hear the Government’s response to our suggestion. We have heard that there is not always a good paper trail in the arts market for objects of the kind that we are discussing, so the new clause is an attempt to look at the problem of ineffective accountability from a different angle. It is no use punishing legitimate operators for a lack of knowledge when there is little reliable paperwork. That could divert resources away from stopping criminals carrying out the activities that the Bill intends to deter people from doing. If we ensure that reliable paperwork is produced and kept, perhaps we can hold the market to account more effectively.

I mentioned on Second Reading that cultural property is important in at least two ways. The first is through its monetary value, and the second is through its importance culturally and to the morale of a particular country—or, indeed, the world. We have heard much about the importance of heritage to morale, in terms of cultural, national and personal identity. We have also heard how groups such as Daesh mobilise cultural property for money by illegally exporting artefacts and selling them on the international market. UNESCO found that looting is happening on an industrial scale in the middle east, and that is what we are trying to discuss and seek a way of tackling with the new clause.

I have outlined the challenges that the art market faces in trying to assert provenance. Paperwork stretches back only so far, and that which existed before the 1990s was not always kept by owners or authorities. That has resulted in what some have seen as a culture of non-disclosure in the art market. With our earlier amendment 7, I was keen to show that we do not in any way oppose the art market. Rather, we want to support those who work to make it exemplary, by providing a legal backstop to their codes of practice and due diligence. As I have mentioned, this is a very valuable industry, worth many billions of pounds under some estimates, and London’s art market is the second largest in the world. We want to support those who work to ensure that its reputation remains high, and that it therefore continues to hold a pre-eminent role in the world.

Of course, an object’s entire paper trail cannot be retroactively reconstructed, but we can put in place robust measures to ensure that records are reliable from this point. We should aim for the transparency that we demand in other industries because, as in every industry, there are activities and actions of individuals within it that have to be deterred and prevented. A lot of investigative work was done by both Channel 4’s “Dispatches” and The Guardian into some of those activities. I understand that the Metropolitan police have stated that the market has improved recently, largely due to the due diligence practices that we have discussed. Building on that, it is not unreasonable to expect, as a minimum, that the identity of an item’s owner and buyer should be made known, as referred to in subsection (1) of the new clause.

Subsection (2) would have the Secretary of State bring forward regulations regarding specific requirements for transparency. I think that a similar amendment was proposed in the House of Lords, to which the Government objected because it would have put too much detail in the Bill. That is always an objection that Governments, often reasonably, but at other times unreasonably, bring forward. In this version, we have allowed the Secretary of State the opportunity to bring forward those regulations on what would be specifically required for transparency. That is so that there can be appropriate consultation with the market, and an opportunity for others to make representations on the exact detail of what that transparency would consist of. It is not possible to trace the entire provenance of every item, but if the Secretary of State were to ask, or require, that an effort be made to identify owners since 1970—the date of the UNESCO convention—that would go a long way towards helping to improve the market.

I have outlined that there are self-regulatory codes of practice in place in the art market. I am happy to praise the industry for putting those in place and for the improvements in recent years. However, the Government have acknowledged that that is partly due to the effect the 2003 Act had in incentivising due diligence, so legislation can have an impact on improving due diligence. With this new clause, we are suggesting that we should not be complacent. The Bill is an opportunity to incentivise further transparency and deter further fraudulent behaviour. Does the Minister agree with that? We are approaching the same issue of criminality from a different angle, and our aim is to establish effective enforcement and deterrents. I look forward to hearing the Minister’s response on new clause 3.

Photo of Victoria Borwick Victoria Borwick Conservative, Kensington

I wish to comment on new clause 3 on behalf of the art and antiques trade, because I believe that it is entirely inappropriate. I believe that there is considerable misunderstanding about the information available for millions of works of art, antiques and antiquities owned by citizens and institutions in this country. The submissions from the trade make it clear that the vast majority of cultural objects, whether held privately, in museums, or being bought or sold on a daily basis, are not supported by historical or documentary evidence of previous ownership, or the dates and locations of their previous whereabouts—what the art market calls provenance.

That is inevitable when you consider that works of art have been entering and leaving this country for hundreds of years. Documentary evidence may never have existed, may have been lost with the passage of time, or may never have been considered necessary. Until very recently, owners of objects rarely retained copies of export licences, and the originals would have been surrendered to the authorities. Although it would now be considered good practice to retain such information, it is not possible retrospectively to create a paper trail for the majority of objects where none exists.

The absence of such documentary evidence by no means necessarily indicates that an object is of illicit origin. On a daily basis those in the trade have to make honest judgments for the majority of objects for which no documentary evidence exists. Taking that into account, when a dealer is in possession of information demonstrating that an object was legally exported, then all is well and good. If they have information to suggest that it was illegally exported, they would be breaking the law if they sold it.

As I have mentioned, the vast majority of cultural works of art on sale in this country are, for historical reasons, not accompanied by such information. Although specialists will often be able to identify the date of manufacture and country of origin from the style, condition and craftsmanship exhibited by an item, in the case of an item likely to have been made abroad, the date it left the country of origin and the date it arrived in Britain will often simply not be known.

My final comment about new clause 3 concerns client confidentiality. The Minister in the other place, Baroness Neville-Rolfe, expressed concerns that passports containing details of previous owners would infringe article 8 of the European convention on human rights. The retention of the names and addresses of previous owners would interfere with the right to respect for private and family life.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Culture, Media and Sport) (Arts and Heritage)

Does the hon. Lady acknowledge that the detail proposed in the amendment that was tabled in the Lords is not included in this new clause, and that any such detail would be outlined in regulation after discussion with industry?

Photo of Victoria Borwick Victoria Borwick Conservative, Kensington

Although I accept that, it is also an important briefing point today as to why the art and antiquities associations feel so strongly about this. The Government’s opinion is that such a level of interference could not be justified as necessary for the aim of protecting cultural objects. I maintain that the same considerations would apply to the proposals contained in the new clause, and I therefore ask my colleagues to reject it.

Photo of Tracey Crouch Tracey Crouch The Parliamentary Under-Secretary of State for Culture, Media and Sport

I actually agree that it is important that dealers in cultural property provide appropriate information on the provenance of the items they sell, but I am unable to support new clause 3, for the following reasons. First, it would introduce a statutory requirement for the art market to provide information about provenance for the first time. As I have said before, I believe that it is appropriate to allow the art and antiquities trade to regulate itself. The established trade associations possess codes of ethics that they expect their members to abide by, and we expect them to enforce those codes strictly.

Furthermore, we believe that the existing legal framework, along with the new offence we are creating, provides a sufficient incentive for legitimate dealers to ensure that they do their due diligence and pass on relevant information concerning an object’s provenance. The Government are not in the business of imposing disproportionate regulatory burdens on well functioning markets. Indeed, we have a manifesto commitment to cut red tape further. We believe that the current self-regulatory approach to the art market works well and that there is no need to add an additional statutory burden.

Secondly, new clause 3 appears to be an attempt—I am not sure whether this was the Opposition’s intention—to shift responsibility for making decisions about whether a cultural object has lawful provenance to the buyer. It seems strange to put the focus on the buyer in this way. It could result in buyers being far more cautious about purchases, which would genuinely risk slowing down the art market. Our expectation is that dealers should carry out due diligence, seeking advice as appropriate and taking a view on an object’s provenance before offering it for sale. If there is a question mark over provenance, it simply should not be for sale.

Thirdly, we cannot understand the Opposition’s motivation in tabling both new clause 3 and amendment 7, which I appreciate has now been withdrawn. Raising the threshold of the mens rea to such a high level and putting the onus on buyers to make decisions about whether or not an object has lawful provenance would significantly water down clause 17, while at the same time putting additional burdens on both buyer and seller. I must therefore strongly resist new clause 3.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Culture, Media and Sport) (Arts and Heritage) 3:00, 15 November 2016

I thank the Minister for her response. She will understand that, in tabling probing amendments, we sometimes have to probe from one direction and sometimes from another in order to find out whether the Bill is sound.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Culture, Media and Sport) (Arts and Heritage)

I will not go any further.

It is not entirely illogical if, as the Minister has said, auctioneers and traders should have a duty to determine provenance. They should have a duty to tell the person to whom they are selling the item what its provenance is, and that is what is envisaged in new clause 3; it would require nothing more than passing on information. I take the point that those matters could be covered in industry codes of practice, but the problem with such codes is that it is usually only the good guys who sign up to them, whatever field we are talking about. The purpose of regulation is to cover everybody, not just members of industry bodies who pay their subscriptions and obey codes of practice that they have signed up to. However, the new clause was a probing amendment and I will therefore not seek to press it.

Question put and agreed to.

Clause 17 accordingly ordered to stand part of the Bill.

Clauses 18 to 27 ordered to stand part of the Bill.

Clause 28