For those in peril on the sea – risk reduction for the superyacht art collector

For those in peril on the sea – risk reduction for the superyacht art collector

By Pandora Mather-Lees

The rise of the superyacht as a second home replete with outstanding interior décor suggests increased mobility and movement of art. It also presents complexities, unforeseen risks and challenges.

The rise of the superyacht as a second home replete with outstanding interior décor suggests increased mobility and movement of art. The prospect of procuring special pieces or indeed a full curated programme is naturally exciting for dealers, art advisers and, of course, interior designers. 

It also presents complexities, unforeseen risks and challenges for all industry stakeholders which can result in painful losses. In such an environment, compliance with regulatory standards and respect for the value of art, artefacts and decorative objects should underpin all fine art on board, its sale, transportation and ongoing ownership.

Avoiding hazards starts long before the vessel receives a collection.  Considerations will include prior evaluation, concept planning, preparation and expedition of artwork followed by supervision and then continuing administration.  One should be mindful of three risk categories; the legal implications of moving art across borders, the logistics chain when transporting delicate objects and the consequences of the human and environmental impact – the ‘agents of deterioration’.

 

Photo: David Churchill
Beach bar of Galactica Star courtesy of Bannenberg & Rowell Yacht Design (Photo: David Churchill)

 

Are Export Sanctions really a risk on Superyachts?

Export risks arise at three levels, individual, national and international. For example tax liability (best addressed by a tax adviser on a case by case basis), national treasure laws and, at global level, endangered species regulation.   Superyachts entering multiple ports during the year inevitably attract attention of the port authorities and inspections can be conducted with little or no warning.

National Treasure Laws

In August 2015, the Sailing Yacht ADIX was impounded in Corsica against a backdrop of media attention surrounding the confiscation of a Picasso masterpiece which had been adorning the interior.   Before this drama, few in the superyacht sector would have been aware of the implications of cultural heritage laws for captains, crew or their yacht management companies. 

The painting in question is now in the Madrid National Museum while the owner, Jaime Botin, faces up to 4 years in prison and a potential €100m smuggling fine. In most cases the objects are simply removed on the spot and subsequently destroyed or unceremoniously disposed of. It is unclear how many such incidents concerning superyachts have not reached the press.  However with valuable artworks on board, these itinerant floating homes crossing national borders can be an obvious target for Customs and Border agencies. 

These treasure laws exist to preserve national heritage for future generations; a reminder of our place in history and a means by which we understand our past.  Cultural artefacts may have significant emotional as well as material value and nations are becoming more protective in their bid to win objects back. Each country has its own thresholds, standards and rules. In the UK, the Waverley Criteria, established in 1952 work according to three principles by which a committee determines if a work should be allowed to leave the country. The object does not have to be priceless; Lawrence of Arabia’s dagger was retained for the nation as was Jane Austen’s turquoise ring.  Paintings departing French territory have various thresholds according to value and medium: for instance paintings and watercolours 50 years old and with a value of over €150,000 for paintings and €30,000 for watercolours,  must travel with their own stamped, photographic passport when leaving the EU. 

The wave of repatriation claims made against museums in respect of objects deemed looted or stolen has exacerbated global consciousness as regards any national treasure and indeed has created near diplomatic incidents.  We are even witnessing the revocation of previously granted export  licences. For instance the extraordinary case where Italy revoked its licence for a painting of Camille Borghese expatriated to The Frick Collection in New York. The Italian authorities claimed “they did not know” at the time that the sitter was a Borghese despite a clearly marked label to this effect on the reverse!

Compiling, reviewing and understanding documentation relating to items on board a yacht is thus critical especially when cruising and carrying newly purchased pieces.

Protecting Endangered Species

‘CITES’ regulations were established during the 1973 Washington Convention and today 183 countries have signed up to an international treaty to control the trafficking of over 36,000 species. These include coral, ivory, rosewood, butterflies and any number of oddities that have ended up aboard luxury vessels.

Superyachts have been impounded over seemingly harmless objects such as a fish skeleton and a butterfly painting by artist Damian Hirst.  Industry anecdotes also include the confiscation of a rock musician’s rosewood guitar, another rock musician’s grand piano (for its ivory content) and an inlaid cabinet where the ivory was hacked out by officials.  

In the light of the news that 100,000 elephants were slaughtered in three years in Africa alone regulation on ivory has tightened up to the effect that shippers do not want to handle it at all. Even special leather coverings have come under scrutiny on yachts sporting crocodile, alligator and other skins.

A valid CITES licence must accompany objects crossing borders comprising or containing protected species, so a review of documentation on board is, therefore, an important preventative measure. It is an area of compliance which dovetails with sustainable and responsible sourcing. Burmese teak decking from Myanmar recently caused a flurry throughout the yacht industry with press reports of vessels which fell short of expectations.

For owners and guests transporting personal items, one should remember that watches, handbags, belts, hats and various decorative items such as vanity sets should be reviewed.  Only recently ‘Rich Kid’ Instagrammer Stephanie Scolaro, was prosecuted for smuggling python skin baseball caps from the Far East amid a surge of unwanted tabloid publicity.

EU Regulation

A third area of risk at international level relates to imminent EU rules on looted antiquities crossing borders from outside the EU inwards. Framed at the end of 2018, EU Regulation 2019/880 brought into force in 2019 and taking effect fully from 2020-25 is essentially about stemming terrorist financing in conflict zones. Concerning the import of antiquities over 250 years and artworks over 200 years old, artefacts from outside EU territory must carry sound provenance with documentation to demonstrate they are clean from illicit trafficking. This first EU law regarding import of cultural heritage requires a licence for antiquities and statement of origin for other artefacts.

Each member state will establish a register of licences to keep a record of documentation. It  would, therefore,  be prudent for collectors, dealers and institutions to ensure they have a good collections management system to ensure they have all their ducks in a row in good time and know the origins of the pieces in their portfolio.

Responsible collections management and sourcing will demand weeding out conflict objects, looted for instance from museums and archaeological sites in Syria and Iraq. Cultural items from both territories are already barred, however antiquities have for years been traded internationally via multiple channels including social media to fund terrorism, so this means enhanced vigilance.  Superyacht residents may freely wander into a bazaar, art gallery or market at any number of luxury destinations. How likely are they to pick up an attractive piece as ornamentation on board or to bring back home? This could apply to crew with disposable income as well as guests.  Further channels and sources could be an art fair, dealer or interior designer. Value is immaterial and the European legislation specifies that painting, drawing, coins, sculpture, engravings as well as archaeological pieces apply, although antiquities have the most stringent controls. The regulation provides for some exceptions, such as when documentation is hard to locate or if an importer can prove legal export from a specific territory of 5 years’ residency, but even this will have to be interpreted by individual member states.

For the superyacht industry, countries with weaker laws, varied border control and those which are known vulnerable trafficking routes into Europe will be under scrutiny.  Turkey along with other destinations in the East Mediterranean meets this criteria and Southern Italy is another. The region is important for the superyacht industry and there is a strong case for raising awareness with captains and management in how to prepare and indeed for art advisers to warn potential purchasers and existing clients. Moreover the recent trend towards incorporating antiques in contemporary design with initiatives such as Christie’s The Collector platform enhances the risks of artefacts slipping through unnoticed.

 

Agents of deterioration

Once sound documentation is in place and export risks have been navigated, there are other special considerations for art on superyachts.  When staff have little to do, they will often be asked to look busy and clean something. This can be a mistake. Overcleaning is usually more responsible for damage in a luxury home or yacht than under cleaning.  In the art world, we are familiar with the ten ‘agents of deterioration’ the most damaging elements to valuable objects. Crew and others in service are not so familiar. Therefore, basic training in the susceptibility of materials, care and placement of objects is important. Heat, light, humidity, salinity and pests along with chemical agents all play their part. Committing to avoiding chemical agents is a risk avoidance tactic in itself, but most cleaning staff do not consider this. An Anish Kapoor mirror sculpture delivered to a yacht sustained fingerprint damage to the concave surface on installation – attempting to clean it off made it worse.  Shipping it back to the studio for repolishing cost more than US$20,000 all told.  After its return, it developed spores from the saline air and had to be shipped back again some months later.

 

Human error is often the highest risk

Many of the accidents that happen to art on board are because individuals are generally new to working with fine art at close quarters.  They may not know who the artist is or characteristics of their practice and this stretches to understanding questions of value and also understanding that the superyacht owner is an art collector. 

When a captain unwittingly unwrapped a Christo & Jean Claude masterpiece and threw the “wrapping” down into the engine room he could have had no idea this would cause his owner to utter cries of despair upon embarkation. This anecdote shows why learning a little art appreciation could go a long way towards avoiding embarrassing moments, discomfort and financial loss.  Yachting crew cannot be expected to have such depth of knowledge, so dealers or any vendor should have a good imagination to pre-empt disasters and excellent communication skills to ensure everyone in the supply chain is informed. In the case above, had there been good co-ordination between the supplier, the shipper, the owner and those on board, undoing paper and string that was part of the fabric of the work itself might not have happened. 

 

Conclusion

As Captain of a superyacht, priorities centre around health & safety, itineraries, upkeep and maintenance of the exterior, interior and crew on board, not to mention the important aspects of ensuring the owner’s requirements are met to the highest standard possible.

The additional burden of responsibility for specialist interior assets is now an unwanted part of the overall responsibility and it is not just related to paintings.  Some vessels have significant design pieces which cross the border into contemporary art. There is often limited inventory, awareness or knowledge about these.

The variety of risks arising from onboarding fine art are exacerbated because of the itinerant nature of UHNW families. Moreover the owner is also likely to be a private aircraft owner where it is commonplace to carry objects as ‘personal effects’ without thinking of the risks. For larger aircraft fine art is now forming part of the interior design too. Road transport is another and proved to be a sober lesson for a Modigliani owner who drove his painting out of Italy into Switzerland.

Whatever the means of transport, these disaster incidents can be contained and prevented with good management and best practice guidelines. 

The lesson here for professionals in the art market is to show the client duty of care and to preach due diligence. One should consider supporting the sale with practical information, proposing both training in the care and appreciation of art along with risk assessment for those who will be the new caretakers of what is after all our cultural heritage.

 

 
Pandora Art Services offers training to empower guests and crew in the practical care of art and handling of works on board along with art appreciation, risk assessment and supervision to provide both initial and ongoing training for the crew at the shipyard, on board the vessel or in the classroom.

 

Top Image: Glowing Moon by Michaela Smrcek 

 

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