For GLAM

• Are GLAM gift shops acting as AMPs when selling original visual artworks to their customers  when the first sale is between the artist and the GLAM gift shop? 

  In this case yes, as the GLAM gift shop can be regarded as “any other person who is in the business of dealing in visual artworks”, they will fit the definition of an AMP under the act.  In any event, the obligations will be the same whether they are regarded as a GLAM member or an AMP, as the responsibility will be on them to report and pay the relevant royalty if required. 

• But aren’t Universities publicly funded?

  Just because a University receives some public funding for its operations, does not make it a “publicly funded art gallery” or “a publicly funded archive that collects and displays artworks”.   Universities receive funds and revenue from many sources.  Any artworks the University has collected and displayed may have been purchased other than with public funds (e.g. through University operating revenue, sales of assets, or private bequeaths or foundations).  The proportion of public funding it does receive is likely to be ear-marked and attached to tuition, rather than for the purpose of operating an art gallery or archive to collect and display artworks.   

  Universities may establish special bodies to collect and display artwork.  But unless that special body is in effect operating as an art gallery or archive (etc) that collects and displays artworks, and its operation is publicly funded (e.g. it applies for and receives public funding for that purpose) then resales involving that body are unlikely to automatically qualify as a professional resale (unless an AMP or GLAM is involved in the resale).

• Has there been any consideration regarding the extension of copyright duration that will be enacted sometime in the next four years?

  Currently the artist resale royalty will apply for 50 years after the death of the artist which aligns with New Zealand’s current Copyright Act. However our understanding is that the Copyright term will be extended prior 1 May 2028, and we would expect that the ARR term will then also be extended to align with the Copyright Act. 

• How do you define ‘limited number of copies’? 

  The Act does not define what a limited number of copies is, although there is provision in the Copyright Act that a 3 Dimensional artwork that has fewer than 50 copies produced is copyright protectable, so this might be a useful benchmark. We suggest using good faith best efforts to do your due diligence in researching, and keep a record of your research in case it is needed at a future date.  If you have any concerns or want to discuss then please just get in touch with us. 

• How does the scheme apply to GLAM organisations?

  This section applies to:

  • publicly funded art galleries; and
  • publicly funded museums, libraries, and archives that collect and display artworks (“GLAM”). 

  Three ways the Scheme affects GLAM:

  1. GLAM are not Art Market Professionals (AMPs). 
  2. However, resales involving GLAM do fall within the Scheme.  If any GLAM is involved in a resale of original visual artwork it may still count as a “professional resale”  (and therefore a “qualifying resale”).  (See Step 1 of the Criteria to learn what a qualifying resale is). 
  3. GLAM don’t have liability for paying the royalty.  Generally, GLAM aren’t required to report to RRA on qualifying resales either, UNLESS there are no Art Market Professionals involved in the resale.  In that event, then each GLAM  will be responsible for reporting information about the resale to RRA.

• How is the resale value calculated?

  The resale royalty payable is calculated at 5% of the “resale value” of the qualifying resale (section 16).

  Section 10 says that “resale value” means: “the value of the consideration given for the visual artwork under the contract for resale” which may include:

  • the amount paid in New Zealand dollars;  
  • the value of goods and/or services paid in kind;  
  • (if paid in another currency), the amount converted to NZD at the date of payment.   

  ‘Resale value’ does not include:

  • goods and services tax (GST; or
  • duties, levies, or taxes (etc) under the Customs and Excise Act 2018; or
  • “any costs associated with the resale, for example, a commission or a buyer’s premium” 

• How much is the resale royalty payment?

  The amount is the same for both eligible artists and successors, a 5% royalty will be collected for eligible artists each time there is a qualifying resale of their original visual artwork. 

  The collection and distribution of the payment is managed by RRA, a not-for-profit. RRA will retain 20% for the purpose of funding RRA operations and distribute the remainder of the royalty to the visual artist or successor.

• In the RRA guidelines, it states RRA will ‘verify’ GLAM’s reports. What does this involve?

  RRA will review resales reports for detail and completeness, as defined by the Act and Regulations. The objective of verifying reports is to have complete and accurate information to support rights holder identification and distribution processes, ensuring timely payment to the artist(s) or successors(s).

• Is there any process we should follow to determine whether a sufficiently “limited number of copies” of a item exist to determine whether the work is an original visual artwork or not?

  If copies are not numbered as with a limited edition print, and there is no other information available to help ascertain how many copies have been made, then you can possibly assume it is not a sufficiently limited number and therefore not a qualifying resale.  The Act does not define what a limited number of copies is, although there is provision in the Copyright Act that a 3 Dimensional artwork that has fewer than 50 copies produced is copyright protectable, so this might be a useful benchmark. We suggest using good faith best efforts to do your due diligence in researching, and keep a record of your research in case it is needed at a future date.  If you have any concerns or want to discuss then please just get in touch with us. 

• RRA policy on non-compliance

  If a liable person fails to pay a resale royalty, or fails to provide the required reporting information, or if any other requirement of the Act is not complied with, then the Act provides that the Collection Agency may apply to a court for orders enforcing these obligations, and for any other order that is appropriate for an infringement of a property right.  The Act provides that this does not limit any other proceeding that may otherwise be taken by the Collection Agency, a right holder, or any other person affected.  Nor does it limit any other power of the court.  

• Should a GLAM purchase an item of jewellery in 2023 attributed to an artist from Palmerston North who died in 1959. Is it correct that this doesn’t qualify for the royalty as the known maker died more than 50 years ago?

  Correct this is no longer a qualifying resale (assuming it would otherwise have been), as the right to a resale royalty for this Artist expired fifty years from the end of the year that they died, ie at the end of 2009.  

• We often buy acquisitions as lots and within those lots there might be qualifying items, for example, a sketch valued over $2000. How should we declare a select item?

  We suggest using good faith best efforts to do your due diligence, which is probably exactly what you will have done anyway as part of your research into identifying each item you purchase.  We recommend you keep written records of your due diligence in case it is needed in the future, but we will not be auditing your decisions unless independently requested to do so.

  Report the individual item not the lot and include the details as you can – i.e. the artist’s name and details of the sketch, the seller of the lot, and the date of the acquisition.  And again, if in doubt please contact us.

• What are the requirements to report all secondary purchases to RRA, or only those that are a Qualifying Resale under the Act?

  You are only required to report a Qualifying resale as defined in the Act. The scheme will operate on good faith and the belief that you are better qualified to determine whether a purchased item is a qualifying resale or not, and we will not be investigating your decisions unless independently alerted

• What do we do when we are unable to determine the Artist or maker of an item? Do we need to report a resale when we are unsure as to whether it is a qualifying resale?

  We suggest using good faith best efforts to do your due diligence, which is probably exactly what you will have done anyway as part of your research into identifying each item you purchase.  We recommend you keep written records of your due diligence in case it is needed in the future, but we will not be auditing your decisions unless independently requested to do so.  If you have any doubts please contact us and we will be happy to help you.  

• What doesn’t count as visual art? Clothing? Or does haute couture count as visual art? 

  Section 8 of the Act defines what is a visual artwork, and does not refer to clothing – although it does refer to drawings and textiles, so while the clothing items themselves may not be regarded as an original visual artwork,  the underlying drawings that they are based may be regarded as an original visual artwork, and the same with the textile designs.  Arguably if the clothing item is at the level of a WOW entry, it might be regarded as sculpture and therefore would be included in the definition of an original visual artwork.