ASK THE ART LAWYER. Cuba, Its Art, Its Acquisition by Americans and Its Legal Logistics. PART TWO

By Octavio Robles, AIA, Esq.

This is Part Two of a two-part series regarding the legal ramifications and logistics of traveling to Cuba by Americans for the purpose of conducting art transactions in Cuba with artists, curators, dealers and the government and taking the art out of the country. Part One discussed at how an American or a person subject to U.S. jurisdiction, can legally visit Cuba with the purpose of buying Cuban art and importing it back to the United States from the standpoint of American regulations after January 16, 2015 when the easing of relations announced by President Barack Obama in December of 2014 went into effect. In Part Two, I will discuss the issues of transacting the acquisition of art in Cuba for purposes of exporting it out of the island from the standpoint of Cuban regulations. I will also delve into the possible problems and caveats associated with the acquisition of art of deceased artists as well as those associated with the dangers of acquiring stolen works, works confiscated by the government after the revolution of 1959 and the pitfalls related to the inadvertent acquisition of forgeries. In Part Two, I will also revisit the issue of paying for art purchased in Cuba now that a new banking relationship between the U.S. and Cuba has been established since the publishing of Part One.

There are presently 12 categories of travel licenses to Cuba. Previously, those licenses required the issuance of what was referred to as specific licenses which were issued on a case-by-case basis. Under the new regulations, those 12 categories are permitted under general licenses. General licenses are verbal in nature and do not require paperwork. These verbal general licenses are subject to certain conditions. Art is one of the very few items that have been exempt from the U.S. government regulations as it pertains to dollar amount transaction limits relating to one of the 12 categories of general licenses, which I fully discussed in Part One. Conversely, artists are pretty much free to create and sell their work with little restrictions within Cuba and outside of Cuba by Cuban nationals subject to Cuban jurisdiction. Therefore, an American or someone subject to American jurisdiction may legally purchase certain works of art from anyone in Cuba, except the Cuban government, for any price and legally export it back to the U.S. either by bringing it back themselves or having the art shipped. The purchaser could be able to acquire the art even if the purchaser never visited Cuba. The only obstacles have been clearing the art out of Cuba and delivering the money to pay for it. Getting the money there has been a challenge and may become easier now that a new banking relationship has been established between a U.S. based bank and Cuba as discussed later in the article.

Artist Kadir López at his studio located in Kholy, Havana. He uses signs, memorabilia and imagery from pre-1959 Cuba in his wok.

Clearing the art out of Cuba can be a complicated process. Cuban regulations require that all signed original works of art be cleared by the office of the Registry of Cultural Assets (Registro de Bienes Culturales) of the Ministry of Culture before leaving the country. This process costs 10 CUC’s for one or various paintings. An additional 5CUC’s are charged for expedited service. The certificate issued by the Registry of Cultural Assets must state that the piece is not part of or considered belonging to the national patrimony and therefore protected and prohibited from leaving the island. Works by deceased Cuban artists require a certificate that shows where the art derived from in order to avoid the sale of stolen art or possible known forgeries. In the case of works by living artists, it is highly recommended that the work be accompanied by a Certificate of Authenticity from the artist. There have been cases where the work is from a well known artist and the artist himself has had to visit the authorities in order to testify as to the authenticity of the work as his. The process of authenticating art and/or clearing the work through the Registry of Cultural Assets can take a long time. Therefore, the best practice is to have the art cleared through the proper channel by the artist/curator/owner, etc. and have it shipped to an escrow agent in the U.S., who will deliver the payment. Another recommended best practice where the art is not being purchased from a living artist or a reputable dealer or curator is to have the art examined by an expert to determine the veracity of the work. Cuban art is plagued by forgeries in and out of the island.

Another major caveat for those intending to acquire Cuban art is the danger associated with acquiring art that was confiscated from their original owners after the 1959 revolution and any subsequent claim by the original owners or their descendants, associated with the acquisition. Soon after the triumph of the Cuban Revolution in 1959, the government seized the assets of many families that left the country. Exiles left properties, including art, behind. The government claimed that the properties were abandoned. Some of the art wound up in Cuban museums. Others were auctioned off to private collectors in and out of the island and many were taken out of the country. Others still wound up in the homes and offices of the members of the newly formed government. Exiled Cuban families, like the Fanjuls, lost millions in seized art. In many occasions, the original owners left the art in the care of family members when they left the island and then the family members either left themselves or sold the art. These variables create a condition where possible future claims may be difficult to ascertain. In other words, was the art abandoned, confiscated or sold by a family member with or without title and authority to do so.

Laws passed by the U.S. Congress bar U.S. citizens from dealing in property seized by the Cuban Government. The laws also have the effect of putting foreign nationals at risk of losing their U.S. visas allowing them to come or remain in the U.S. for being involved in activity dealing in seized Cuban properties, which includes art. These laws are directed at works expropriated by the Cuban Government and trafficked by art dealers and collectors. There is an Art Loss Register which lists stolen and missing art which aims to put the art world on notice that there is a claim against a listed art work. Where works listed in the Register are sold, funds from the sale could be deposited in a special account to be disbursed after the claim is settled.

Since Part One of this article was published, a new banking relationship has been established between the U.S. and Cuba. Under the new relaxation of the rules, U.S. banking entities have been allowed to establish correspondent banking relationships with banks in Cuba. Stonegate Bank, which is based in Pompano Beach took the valiant initiative to open an account for the Cuban Interests Section in the U.S. That move has facilitated the opening of the new Cuban embassy in Washington D.C. Soon thereafter, Stonegate Bank has established a new correspondent banking relationship with Banco Internacional de Comercio (BICSA) in Cuba. I had the opportunity to meet and interview the CEO and President of Stonegate Bank, Dave Seleski, who offered some revealing insight into the venture and the possibilities in the future. Most importantly, the move was not financially motivated. It may have its financial rewards in the future but the motivation was to get things moving, to make the first move that will hopefully promote further opening of relations and will ultimately help the people. Mr. Seleski indicated that the infrastructure is not yet in place and he anticipates that it may be in place sometime later this year, hopefully as early as September. He further indicated that the new relationship will enable any transaction involving the transfer of money for any approved purpose. The bank and the Cuban government will monitor every transaction to make sure they comply with the regulations. Eventually, credit and debit cards may be issued. They are exploring the possibilities at this time. Most of the anticipated early transactions will involve things like Charter companies sending landing fees, American agricultural companies being paid, embassy transactions and the like. However, given the general license that allows the limitless amount of money that U.S. subjects can spend on the acquisition of certain Cuban art, this new banking relationship could become the natural way, although each transaction will have to be fully documented, to complete those, until now, impossible art acquisitions involving art in Cuba.

Address your questions to Octavio@TheArtLawyer.net.

Octavio Robles, AIA, Esq. is legal contributor to ARTDISTRICTS and a member of the Florida and Federal Bars (Southern District of Florida). He is a Florida Supreme Court Certified Mediator and Approved Arbitrator; a member of the Construction Committee of the Real Property, Probate and Trust Law Section, the Art and Entertainment, and the Alternative Dispute Resolution Law sections of the Florida Bar; and a member of the American Institute of Architects, Art Deco Society of Miami and Copyright Society of the USA. He holds licenses as a registered architect, state-certified general contractor and real-estate broker in Florida and is a LEED-accredited professional. He received his Juris Doctor degree from the University of Miami School of Law in 1990. He holds master’s degrees in architecture and construction management and a bachelor’s degree in design, all from the University of Florida. His practice is limited to art, design, architecture, construction and real-estate law.