• March 28, 2024

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Iran’s Prized Collection of Western Art Might Be Coming to America, but Don’t Count on It

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Word is getting out that Iran is host to one of the most prized collections of Western art outside of Europe and North America. This week, following more than three decades of relative obscurity, Iran will start to show off its inheritance when it opens an exhibition at the Tehran Contemporary Museum of Art, in which Pollocks, Rothkos, and Warhols will adorn the museum’s walls.

Reports indicate that the exhibition will also travel overseas soon after its opening in Tehran, making it the first time since 1979 that the art-world will have access to Iran’s prized collection, which includes some of the most well-known modern art works. Some of the works would travel to Berlin, Germany next fall for the Tehran Contemporary Museum of Art’s first overseas exhibition.

The bigger news, though, is that some of the works could travel to the U.S. in 2017 for an even larger exhibition that would take place at the Smithsonian’s Hirshhorn Museum. According to Bloomberg Businessweek, citing the Hirshhorn’s director, Melissa Chiu, the proposed exhibition is dependent on “political and legal circumstances.”

Leaving aside the political issues, I see two immediate legal concerns – one of which is resolvable, the other of which might prove a significant barrier for this cultural exchange. First, there is a sanctions issue, insofar as the Hirshhorn Museum would be importing into the United States works of Iranian-origin and would also be offering services to an Iranian-origin “person” for purposes of the Iranian Transactions and Sanctions Regulations (“ITSR”), 31 C.F.R. Part 560.

Significantly, though, the importation into the U.S. of Iranian-origin “information and information materials” is exempted from the ITSR’s sanctions prohibitions, “regardless of format or medium of transmission.” 31 C.F.R. 560.210(c). For purposes of the ITSR, “information and information materials includes, but is not limited to, …artworks…,” so long as the artworks are “classified under chapter heading 9701, 9702, or 9703 of the [U.S.] Harmonized Tariff Schedule…” This would be inclusive of such items as paintings, engravings, lithographs, and sculptures (i.e., most of the items that the Hirshhorn Museum would be interested in importing from Iran for purposes of the exhibition).

It is probable that the Smithsonian’s Hirshhorn Museum will also be providing certain additional services to the Tehran Contemporary Museum of Art. Those services, insofar as they are not incidental to the importation of the artworks into the U.S., would need to be licensed by OFAC. Considering the pointed interest that the U.S. administration has had in fostering both person-to-person and cultural exchange between the U.S. and Iran, though, I don’t see this as a particular hindrance. Provided that the Hirshhorn Museum requested a specific license to engage in the provision of certain services related to the presentation of the exhibition, those services would likely be licensed by OFAC. As such, U.S. sanctions issues relating to the proposed exhibition would be fully resolvable.

The real issue is whether U.S. plaintiffs holding outstanding judgments against Iran for terrorism-related offenses would seek to attach the artworks in aid of execution of their judgments by alleging that the artworks are owned by the Iranian government or one of its agencies or instrumentalities. We have seen plenty of instances thus far where U.S. plaintiffs have aggressively sought to execute against Iran’s cultural heritage, including the Persepolis tablets, so I am confident that the plaintiffs’ attorneys are savoring the potential opportunity to go after Iran’s Jackson Pollocks and Mark Rothkos.

I have no idea whether Iran does have ownership over the artworks. From what I am aware, the Shah’s wife, Farah Pahlavi, purchased the artwork during the 1970s. Whether she gifted the artwork to the Tehran Contemporary Museum of Art (which she helped to found) at some point is unclear, but regardless of ultimate ownership, the matter is certain to be litigated in U.S. courts should the artwork ever enter the United States. That might prove a headache too much for both the Americans and the Iranians.

The reason being, should the artwork be determined to be under the ownership of the Iranian government, U.S. plaintiffs holding outstanding judgments for terrorism-related offenses against Iran will have an argument that such artwork is available for attachment in aid of execution of their judgments, in light of the 2008 amendments to the terrorism-exception of the Foreign Sovereign Immunities Act. Specifically, while the issue has been insufficiently litigated, 28 U.S.C. § 1610(g) could prove a further exception to the general prohibition on attachment of a foreign sovereign’s property that was not used for commercial activities in the United States. 28 U.S.C. § 1610(g) states, in part:

“…the property of a foreign state against which a judgment is entered under § 1605A [the terrorism exception to the FSIA], and the property of an agency or instrumentality of such a state, …, is subject to attachment in aid of execution, and execution, upon that judgment…”

In certain cases in which the availability of Iran’s cultural property for attachment has been litigated, Iran’s lawyers have alleged that this does not constitute a separate exception to the general immunity from attachment or execution. The merits of that argument have not been tested, however, and it would be a major risk on Iran’s part to share the artwork with U.S. museums in reliance on that legal theory.

There is also a claim to be had that Iran’s artwork can be protected from attachment under the cloak of diplomatic immunities. Pursuant to 22 U.S.C. § 2459, foreign artwork that is imported into the United States for temporary exhibition under an agreement between the U.S. or a U.S. educational and cultural institution and the foreign custodian of the artwork is immune from any judicial process, provided that the President determines that the artwork is of cultural significance and that the temporary exhibition of the artwork in the United States is in the U.S.’s national interest. Some in Congress have sought to strengthen this legal provision, particularly in light of the toughening of the language of the FSIA’s terrorism exception, but so far to no avail. While this could plausibly provide legal cover for the artwork, a modicum of risk still remains.

In short, the risks associated with importing into the United States artwork from Iran make it unlikely that we will see Iran’s Pollocks, Rothkos, and Warhols in Washington, D.C. anytime soon, despite the best efforts of the Smithsonian’s Hirshhorn Museum. While the legal arguments might eventually bear out in favor of the U.S. and Iran, the headache of litigating the matter is likely to weigh heavily against this kind of cultural exchange in the near future.

Tyler Cullis

Mr. Cullis is an Associate Attorney at Ferrari & Associates, P.C. where he is engaged in the practice of U.S. economic sanctions, including trade compliance, regulatory licensing matters, and federal investigations and prosecutions. Mr. Cullis has extensive experience counseling clients on matters falling under the purview of the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS). He has provided counsel to U.S. and foreign parties on complex cross-border transactions and compliance with U.S. economic sanctions; conducted corporate internal investigations and developed sanctions compliance policies; and submitted license applications and voluntary self-disclosures to OFAC. Mr. Cullis has advised global financial institutions, multi-national corporations, U.S. and foreign exporters and insurers, as well as private individuals regarding U.S. sanctions matters, including matters involving Russia, Iran, and Cuba.

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