Publicly funded Galleries, Libraries, Archives and Museums

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. 

• 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?

  The scheme 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” 

  Plain English Guidelines

  In plain English, this means that the “Resale Value” is the amount the buyer has agreed to pay the seller for the artwork itself.   All external and other associated costs (taxes, fees, or levies, etc) are separate to (not part of) the scheme or the Resale Value calculation.  This ensures the value of the royalty relates directly to the value of the artwork itself, and is not subject to other external or variable factors.

  For example:

  An original visual artwork sells at auction.  The sale and purchase agreement records that the buyer will pay $2,000 to the seller as consideration for the artwork (plus any applicable fees and taxes).  

  Under the AMP’s terms of service, the parties agree that the seller will pay the AMP a 20% commission ($400) for acting as its agent, and the buyer will pay the AMP a 15% premium (additional amount) ($300) for facilitating the resale.

  Resale Value

  Assuming the Act applies, in the example given above:

  • The “Resale Value” is $2,000 because, in terms of s 10(1) of the Act, that figure represents the value “given for the visual artwork under the contract for resale”. 
  • In plain English, this is the amount the buyer has agreed to pay the seller “for the artwork”. 
  • The artist is entitled to a 5% share in that Resale Value = $100 in this example.  (The AMP and the seller are jointly and severally liable to pay the $100 royalty to RRA).

  Other Associated Costs:

  Other fees, costs, taxes etc may or may not apply to the sale.  These are, however, separate matters to the value given for the artwork. 

  It is important to distinguish these other transactions from the “Resale Value”.  Note that commissions, premiums, taxes, and other costs are usually separately stated in your legal documents and invoices.  For example, they may appear as separate & distinct line items to the hammer price, within the same invoice (or in separate invoices).  They may appear in the AMP’s terms of service rather than in the contract for resale. 

  A helpful way to distinguish “Resale Value” from “costs associated” is first to ask (1) who is paying whom, and second to ask (2) in respect of what?  For example, “Resale value” is (in plain English) the amount the buyer has agreed to pay the seller, for the artwork.   By contrast:

  • a “buyer’s premium” is, first, an amount the buyer has agreed to pay to the AMP (i.e. not buyer to seller).  It is, second, not given “for the artwork”, but rather for the AMP successfully facilitating the resale. 
  • “commission” is, first, an amount the seller has agreed to pay the AMP (i.e. not buyer to seller).  It is, second, not given as consideration “for the artwork”.  Rather it is given for professional services related to the resale (e.g. marketing, valuation, handling & housing of goods, administration, auctioneering, and other professional services etc). 

• In the example where a GLAM gift shope is acting as an AMP – are they required to report buyer information for qualifying resales in a retail context (e.g. an American Tourist purchases art)?  What if the GLAM gift shop is prepared to assume full liability for the resale?

  Section 21 of the Act details the reporting requirements which includes as follows: 

  (a) the name of the artwork, if known: 

  (b) a brief description of the artwork: 

  (c) the resale value: 

  (d) the name of the artist, if known: 

  (e)the name and contact details of the persons liable under section 17 to pay the resale royalty, if known: 

  (f) any other information specified by the regulations. 

  If the GLAM gift shop assumes full liability for payment of the royalty, then RRA would not require the shop to report the name of the buyer, because liability will be discharged as soon as full payment is received by RRA. 

• 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 a GLAM required to report seller information for resales to the GLAM where the resale / donation is conditional to anonymity? E.g. Executor of an estate. 

  If it is a donation then it is unlikely to be a qualifying resale (see below). But if it is a qualifying resale it is as above.   

  i.e. If the GLAM assumes full liability for payment of the royalty, and pays the royalty to RRA, then RRA would not require the GLAM to provide the name and contact details of the seller. The GLAM (and the seller’s) liability becomes fully discharged as soon as full payment is received by RRA. 

  Regarding any anonymity concerns, please be assured that personal information provided to RRA is not shared publicly.  In particular, seller information received by RRA is not shared with the Government nor any other third party – rather it is used only for the purposes of ensuring payment of the royalty to RRA.   Please refer to our Privacy policy for more information. 

• Is protest art an original visual artwork (e.g. a protest placard)?

  We consider that each respective GLAM is best qualified to determine whether an item meets the definition of “original visual artwork”.   Section 8(2) defines visual artworks as: 

  In this Act, visual artwork— 

  (a)includes a visual work of any 1 or more of the following types: 

  (i)a cultural expression of Māori: 

  (ii)a cultural expression of Pacific peoples: 

  (iii)ethnic or cultural art that is a variation of a type of work described in any of subparagraphs (iv) to (ix): 

  (iv)painting, drawing, carving, engraving, etching, lithography, woodcutting, or printing (including a book of prints): 

  (v)sculpture, collage, or modelling: 

  (vi)craftwork, ceramics, glassware, jewellery, textiles, weaving, metalware, or furniture: 

  (vii)photography or video art: 

  (viii)multimedia art: 

  (ix)art that is created using computers or other electronic devices 

  (b) does not include— 

  (i) a building, as defined in section 2(1) of the Copyright Act 1994: 

  (ii) a dramatic work or musical work, as those terms are defined in section 2(1) of the Copyright Act 1994: 

  (iii) a literary work, as defined in section 2(1) of the Copyright Act 1994, unless it is a compilation that includes a visual work of a type specified in paragraph (a)(i) to (ix): 

  (iv) a work of a type specified in the regulations. 

• Is the GLAM required to report a qualifying resale in instances where they have not identified the artist? e.g. Maori artifact

  Yes.  A GLAM must report all “qualifying resales” (even if the identity of the artist is unknown – see section 21(2)(d)).  

  Please note, however, that not every qualifying resale the GLAM reports will necessarily attract a royalty.  If the artist is unknown to the GLAM, RRA will nevertheless attempt to identity the artist in order to confirm whether or not they are eligible for a royalty.  RRA will receive and review the full report, then confirm to the GLAM which resales are (or are not) liable for a royalty in accordance with the Act, and then invoice accordingly.        

  For assistance with what is a “qualifying resale” see our step-by-step flowchart under the ‘Criteria’ section here Resale Royalties Aotearoa | Toi Huarau

  

• 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 GLAMs reporting obligations when reporting a qualifying resale when the purchase is made from a collective? (e.g A group of artists who work collectively or under an umbrella ‘collective’ organization).

  The same reporting rules apply. Assuming it is a qualifying resale (i.e. not a first sale), the responsible party must report the sale under section 21.  That must include information about the name of the artist (or artists) if known.