1. Treaty establishing the European Community (25 Mar. 1957). as amended by the Treaty on European Union (7 Feb. 1992) (1992) O.J. C224.

2. Idem, Art.34(1). Art.34(2) imposes an obligation on member States to abolish all existing quantitative restrictions on exports and any measures having equivalent effect. Arts.30–33 prohibit quantitative and other similar restrictions on imports.

3. Case 7/68, Commission of the European Communities v. Republic of Italy [1968] E.C.R. 423, 430. See also Case 46/76. Bauhtiis v. The Netherlands [1977] E.C.R. 5.

4. (1992) O.J. L395/1 (31 Dec.).

5. (1993) O.J. L74/74 (27 Mar.).

6. Art.2.

7. Art.2(2).

8. (1969) O.J. L324/590 (27 Dec.), Arts.1 and 11.

9. Recital to Directive 93/7/EEC.

10. The Return of Cultural Objects Regulations 1994. S.I. 1994/501.

11. Law No.95–877 of 3 Aug. 1995 (J.O.4 Aug. 1995).

12. The concerns expressed before the Second World War at the export of pictures from private collections in Britain to collections in the US and elsewhere are described in the Report of the Committee on the Export ofWorks ofArt, etc. (HMSO, 1952) (“the Waverley Report”).

13. Waverley Report, idem, para.3. Works of art were first placed under export control pursuant to the 1939 Act on 21 Aug. 1940: see H.C. Hansard, Vol.400, col.1155 (26 May 1944).

14. Waverley Report, idem, para.22.

15. Idem, paras.121–124, 110–113, 114–117, 118–120.

16. Idem, para.125.

17. Idem, para.187. The Canadian Cultural Property Export and Import Act 1974–75–76 contains similar criteria, namely “(a) whether the object is of outstanding significance by reason of its close association with Canadian history or national life, its aesthetic qualities, or its value in the study of the arts or sciences; and (b) whether the object is of such a degree of national importance that its loss to Canada would significantly diminish the national heritage”: s.11(1).

18. Waverley Report, Idem. para. 188.

19. 1939 Act, s.1(1). The 1939 Act does not impose any requirement that such statutory instrument must be laid before, debated in or scrutinised by Parliament: Report of the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq and Related Prosecutions, H.C.P. 115 (1996) (“the Scott Report”). The Scott Report (paras.C1. 1–C1. 150) contains a detailed historical account of the use of the powers to control exports conferred by the 1939 Act.

20. S.I. 1992/3092. para.2, Sch.1 Group 2. The export of goods other than antiques is currently controlled by S.I.1994/1191.

21. Sir Richard Scott concluded that from 1950 until Dec. 1990 “there was, in my opinion, a reprehensible abuse of executive power by successive administrations” in failing to bring into effect an Order in Council which would bring the 1939 Act to an end: Scott Report, supra n.19, at paras.C1.64 and C1.109. Sir Richard believes that a judicial review challenge to the validity of the export control orders “would have had prospects of success”: idem, para.C1.93.

22. In R, v. Blackledge and Others (Court ot Appeal. 22 May 1995, unrep.), a case involving controls on the export of arms to Iraq, Lord Taylor of Gosforth rejected the contention that orders made pursuant to the 1939 Act were ultra vires and invalid because the emergency of the Second World War had long since passed, and held that, in the absence of any Order in Council under s.9(3) of the 1939 Act, the Act remained in force and it was lawful to exercise powers under it. The Scott Report, idem, para.C1.57. argues that this decision did not decide whether it was an abuse of power for the government to have failed to introduce the requisite Order in Council to bring the 1939 Act to an end.

23. Scott Report. idem, para.K2.1.

24. 1939 Act. s.3(1).

25. Customs & Excise Management Act 1979. s.68(2) and (3).

26. S.I.1992/3092, para.2, Sch.1 Group 2.

27. Department of Trade and Industry. Notice to Exporters, Export of Antiques, Collectors' Items, etc. (1991), para.7.

28. The roles of the expert adviser and of the Reviewing Committee are explained in ibid. Detailed discussion of the Reviewing Committee's consideration of cases referred to it can be found in the annual reports of the Reviewing Committee, which are published each year as a Command Paper. In addition to commentaries on the individual cases considered, each report contains general observations by the Reviewing Committee derived from its experience during the year.

29. Department of National Heritage Press Notice DNH 27/94.16 Feb. 1994.

30. In Mar. 1990 the Trade and Industry Secretary announced that, when considering an application for an export licence for a heritage item in the future, he intended to take into account the existence of offers to buy from private sources as well as public. The widened policy was implemented with effect from 4 May 1990: Department of Trade & Industry Press Release 90/113.2 Mar. 1990.

31. 34th Report of the Reviewing Committee 1987–88. Cm.526. paras.14.15. 17 and 19.

32. DTI Notice.supra n.27, at para.11; Department of Trade and Industry Press Notice 90/265.4 May 1990.

33. 38th Report of the Reviewing Committee 1991–92. Cm.2071. App.B, paras.3. 61 and 62.

34. Idem, para.6.

35. The current OGEL is the Open General Export Licence (Antiques) dated 3 Sept. 1993. which was granted by the Secretary of State in exercise of powers conferred by Art.3(a) of S.I.1992/3092. The OGEL does not apply to goods intended for export to Iraq, Libya, Serbia or Montenegro.

36. Where an EC export licence is required under Reg.3911/92, the OGEL will not be valid unless an EC licence has first been obtained.

37. There is no generally available published material on the OIEL system. The information contained in the text has been supplied by Mrs Lynn Gates, Head of Export Licensing Unit. Department of National Heritage.

38. The history of The Three Graces and the principal events concerning the attempts by the Getty Museum to purchase it are described in the Reports of the Reviewing Committee for 1988–89. Cm.834, para.27 and Case 23: 1989–90, Cm. 1225, paras.53–57: and 1993–94. Cm.2710. paras.3–7 and Case 11. Further detail is to be found in the unreported judgments of Laws J (13 Sept. 1994) and of the Court of Appeal (27 Oct. 1974) which dismissed the applications for judicial review of the decision in Aug. 1994 of the Secretary of State for National Heritage to defer consideration of the export licence application.

39. The Three Graces stood in the sculpture gallery at Woburn Abbey from 1819 until 1985. In 1984 the statue was sold to Fine Art Investment and Display Ltd, a Cayman Islands company, for a reported £1.5 million. Before each of the contracts of sale to the Getty Museum was entered into, the owners had enquired whether a UK national museum was willing and able to acquire the work.

40. Office of Arts and Libraries Press Releases PN/0A L/27. June 1989. and Press Release. 12 Dec. 1989.

41. Department of Trade and Industry Press Release 90/113.2 Mar. 1990.

42. Department of Trade and Industry Press Release 90/265.4 May 1990.

43. The second export licence application was for an EC licence. No differences are apparent in the procedures applied to this licence application and that made in 1989.

44. Department of National Heritage Press Release DNH 27/94. 16 Feb. 1994.

45. As appears from the judgment of the Court of Appeal in R. v. Secretary of State for National Heritage and Another, ex p. the J. Paul Getty Trust (unrep., 27 Oct. 1994), the Minister gave no such assurance in his letter notifying the Getty Museum of his decision, and there was no evidence that the press report was known of or relied on by the Getty Museum: transcript, pp.14.24.

46. Department of Trade and industry Press Release. DNH 115/94.9 Aug. 1994.

47. Ex p. the J. Paul Getty Trust, judgments (unrep.). supra nn.38 and 45.

48. The Times, 13 Dec. 1994.

49. “Starred items” are those which the Reviewing Committee feels to be “of especial importance, for which every effort should be made to produce a compensating offer”: see 38th Report, supra n.33, at App.B. para.14.

50. 36th Report of the Reviewing Committee 1989–90. Cm. 1225. para.7.

51. Idem, para.9.

52. The Reviewing Committee's view was that “The sudden introduction of the Secretary of State's proposed changes to the Waverley system in March [1990]… and the subsequent further policy statement in May [1990], coinciding with the dates when the Secretary of State was due to review the licence application for the statue, gave the unfortunate impression that policy was being made on the run so as to avoid producing [the necessary sum]”: idem, para.56.

53. See the figures contained in 38th Report, supra n.33. at App.B. para.6, and 41st Report of the Reviewing Committee 1994–95. Cm.3008. para.22. It is also worth noting that in recent years export licences were granted in respect of purchases by the Getty Museum of a Sebastian del Piombo oil valued at £6.5 million (1991–92). a Turner oil valued at £11 million (1992–93), a Michelangelo drawing valued at £4.5 million and a Tiepolo sketch valued at £3.2 million (1993–94), and oil paintings by Rembrandt and by Correggio valued respectively at £4.8 million and £3.7 million (1994–95).

54. See 38th Report, Idem. App.B. paras.61–62.

55. The NHMF was established under the National Heritage Act 1980. From Jan. 1995 it has administered the fund created for its original purposes (the Heritage Memorial Fund) as well as a new Heritage Lottery Fund.

56. See NHMF, Guidelines for Applicants to the Heritage Lottery Fund (Dec. 1994), paras.5.4.1 and 3.6.

57. The National Heritage Secretary announced that in the first 66 weeks of the Lottery £322 million was distributed to each “good cause”: DNH Press Release 46/96.20 Feb. 1996.

58. See Capital Taxation and the National Heritage (IR 67). issued by the Board of Inland Revenue. Dec. 1986.

59. IHTA 1984. ss.30(3) and 31(1). Lifetime gifts are eligible for conditional exemption only if the transferor (or his spouse) had been the beneficial owner of the property throughout the six years ending with the transfer, or if the transferor acquired the property on a death as a result of a conditionally exempt transfer.

60. Idem, s.31(2).

61. Idem, s.32(1), (2). (3) and (5).

62. Idem, s.25(1)and Sch.3.

63. Idem, s.32(4)(a).

64. The Inland Revenue allows this practice, for which there is no statutory authority.

65. Although the rate of douceur considered by the Inland Revenue to be applicable in the normal case is 25%. “there will be occasions on which a figure above or below 25% would be appropriate. For example, a higher figure may be necessary to provide an adequate inducement in respect of low value objects and a lower figure may well be reasonable for very high value items”: 1R 67, supra n.58. at para. 10.4.

66. IHTA 1984, ss.230 and 231.

67. The guidelines on the interpretation of pre-eminence in respect of objects offered in lieu of tax are: “(i) Does the object have an especially close association with our history and national life? (ii) Is the object of especial artistic or art-historical interest? (iii) Is the object of especial importance for the study of some particular form of art. learning or history? (iv) Does the object have an especially close association with a particular historic setting?” See IR 67. supra n.58. at para. 11.12.

68. The Reviewing Committee has recommended that the douceur be increased so as to restore the benefit to the proportion it was before the top rate of IHT was reduced: see 35th Report 1988–89. Cm.834. para.39.

69. In Mar. 1990 Lord Rothschild proposed that the estate of his late aunt should purchase The Three Graces for the recommended price of £7.6 million on the basis that the estate would then offer the statue to the nation and receive a credit against the liability of the estate for IHT under the “acceptance in lieu” procedure. It was presumably intended that the estate would also benefit from the douceur.

70. Taxation of Chargeable Gains Act 1992. ss.257(1) and 258(2)(a).

71. Value Added Tax Act 1994, s.31 and Sch.9, Group 11.

72. J.O.4 Jan. 1914.

73. Idem. Art.14.

74. Conseil d'État decision, the Walter case. 31 July 1992.

75. Law of 31 Dec. 1913. Art.16.

76. ibid.

77. Idem. Art.3.

78. Idem, Art.21.

79. Idem, Art.22.

80. Idem, Art.23.

81. Idem, Art. 19.

82. Idem, Art.24.

83. Idem, Art.16.

84. ibid.

85. J.O.19 July 1941.

86. Idem, Art.1.

87. ibid.

88. The Finance Act of 31 Dec. 1921, Art.37. Inonecase the National Museumsof France acquired by pre-emption a painting described in the auction particulars as “School of Car-rache” but which the subsequent researches of the Louvre identified as a painting by Poussin, Olympos and Morsyas. Once the attribution was made public the vendors commenced proceedings which led after 16 years of litigation to the purchase by the State being set aside on the ground of mistake. The painting (originally sold at auction for 2.200 francs) was subsequently sold by the original owners for 7,400,000 francs.

89. Law No.92–1477 (J.O.5 Jan. 1993). amended as to various financial provisions by Law No.94–679 (J.O. 10 Aug. 1994).

90. Decree No.93–124 (J.O. 30 Jan. 1993).

91. Law No.92–1477, Art.5.

92. Decree No.93–124, Art.2.

93. Law No.92–1477, Art.7.

94. Decree No.93–124, Art.3.

95. ibid.

96. ibid.

97. Idem. Art.2.

98. Idem, Art.4.

99. ibid.

100. Law No.92–1477, Art.5.

101. Decree No.93–124. Art.7.

102. Idem, Art.5.

103. Law No.92–1477, Art.9.

104. ibid.

105. Idem, Art.13.

106. The decisions in the Schlumpf case were handed down by the Conseil d'État on 16 June 1978. by the Tribunal d'Instance de Mulhouse on 7 Jan. 1983, by the Cour d'appel de Colmar on 23 Jan. 1989, and by the Cour de cassation de Paris on 28 May 1991. The case was reheard by the Cour d'appel de Metz in Mar. 1996 and the decision announced in May 1996.

107. The decisions in the Walter case were delivered by the Tribunal d'Instance de Paris on 22 Mar. 1994, by the Cour d'appel de Paris on 6 July 1994 (noted in 1995 Recueil Dalloz Sirey 254), and by the Cour de cassation on 20 Feb. 1996.

108. Jean-François Canat appeared for the French Treasury in the Schlnmpf and Walter cases when those cases were previously before the French courts other than the Cour de cassation. Professional ethics prevent him from doing more than reporting factually on matters in the public domain. The expressions of opinion which appear in the text of this article are views of Michael Polonsky alone.

109. Statement of Madame Cachin. Director of Musées de France, in Entretiens du patri-moine (Paris. Jan. 1996).

110. ibid.

111. The Export Licensing Unit of the Department of National Heritage has issued a voluntary Code of Practice in which it has set out the periods within which it aims to complete stages of its consideration of an export licence application. However, the Code gives no guidelines to indicate within what period the Reviewing Committee should make its recommendation to the relevant Minister after an expert adviser has objected to export on the ground that one of the Waverley criteria is satisfied. Deferral periods commence only once the Minister has received the recommendation of the Reviewing Committee.

112. A statutory codification of a system which embodies the Waverley principles can be found in the Canadian Cultural Property Export and Import Act. This specifies (inter alia) the periods within which the Export Review Board must take steps under the Act. The Board must render its decision within four months after it receives a request to review a decision to refuse an export permit. Where the Board determines that an object meets the Canadian equivalent of the Waverley criteria it may establish a delay period of not less than two months and not more than six months to enable a fair offer to purchase to be made by a public institution.

113. 41 st Report of the Reviewing Committee 1994–95, Cm.3008, para.13.