Paris dealer Charles Bailly has been refused an export licence for a 17th Century painting that he bought last March in Eastern France for 9,2 million FF (US $ 1,226 million) (with buyer's premium) after determining that it was probably a work by one of the Le Nain brothers.
The painting, titled “The Denial of Saint Peter”, carried an estimate of 100.000 FF but Bailly sensed this work was a masterpiece. Still, he was not alone to reach such conclusion as someone else battled against him to push the bidding to that altitude.
The problem that the dealer is now facing is that the French State, under a law voted last July, has refused to grant the painting an export licence. This means that he cannot sell this painting, considered as a national treasure, to anyone living outside France.
The new law has been intended to allow owners of a national treasure to sell such work after a period of 30 months during which the State must offer them a reasonable price, based on its market value, to acquire it. After that, they are free to export it.
If the owner came to refuse an official offer, at least two experts would be named to settle the matter. If he again refused an ultimate offer, the State would be free to refuse to grant an export licence for the work in question. Such matter might lag over a period of 40 months and the owner of a national treasure would face the risk of losing a considerable amount of money if forced ultimately to sell it at auction since the State would be in a position to pre-empt it at a price that would be well under international standards since it could not be exported.
Bailly has had to borrow a huge amount of money from his bank to acquire the “Denial of Saint Peter”, which he said was formerly in the collection of King Louis XIV Prime minister Cardinal Mazarin. French museums did not try to pre-empt that work but when the dealer requested an export licence for it the French Administration notified a blunt refusal. Now, the Louvre might offer a certain sum for this work but not over the hammer price of 8,3 million FF meaning that Bailly would lose at least 2 million FF ($ 266,000) representing the final price, which includes the buyer's premium and bank interests.
The dealer feels heavily penalised and does not understand why he will be prevented from reaping the benefit of his discovery.
The new law does not seem to suit collectors despite the fact that it is intended to protect their interests. For instance, a 14th Century painting representing a Crucifixion by the Master of Giovanni Barrile was sold at Drouot in June 1999 for 12,8 million FF ($ 1,706 million) after an export licence was refused for it, a small price as if it had been allowed to leave the country such work would have fetched between $ 6 and 7 million. French museums pre-empted this painting and the vendors suffered a considerable loss without benefiting from the guarantees offered by the new law. In that case, they should not have offered it for sale at auction but should have chosen to take advantage of the 30-month period during which the State should have offered to acquire it for its market value.
Now, most experts are advising collectors not to apply for an export licence before an auction sale in order to avoid a refusal from the French Administration, which would bring the price of a work considerably down. Now, the best thing to do is to withdraw from a sale any work for which an export licence has not been granted.
Paris dealer Charles Bailly has been refused an export licence for a 17th Century painting that he bought last March in Eastern France for 9,2 million FF (US $ 1,226 million) (with buyer's premium) after determining that it was probably a work by one of the Le Nain brothers.
The painting, titled “The Denial of Saint Peter”, carried an estimate of 100.000 FF but Bailly sensed this work was a masterpiece. Still, he was not alone to reach such conclusion as someone else battled against him to push the bidding to that altitude.
The problem that the dealer is now facing is that the French State, under a law voted last July, has refused to grant the painting an export licence. This means that he cannot sell this painting, considered as a national treasure, to anyone living outside France.
The new law has been intended to allow owners of a national treasure to sell such work after a period of 30 months during which the State must offer them a reasonable price, based on its market value, to acquire it. After that, they are free to export it.
If the owner came to refuse an official offer, at least two experts would be named to settle the matter. If he again refused an ultimate offer, the State would be free to refuse to grant an export licence for the work in question. Such matter might lag over a period of 40 months and the owner of a national treasure would face the risk of losing a considerable amount of money if forced ultimately to sell it at auction since the State would be in a position to pre-empt it at a price that would be well under international standards since it could not be exported.
Bailly has had to borrow a huge amount of money from his bank to acquire the “Denial of Saint Peter”, which he said was formerly in the collection of King Louis XIV Prime minister Cardinal Mazarin. French museums did not try to pre-empt that work but when the dealer requested an export licence for it the French Administration notified a blunt refusal. Now, the Louvre might offer a certain sum for this work but not over the hammer price of 8,3 million FF meaning that Bailly would lose at least 2 million FF ($ 266,000) representing the final price, which includes the buyer's premium and bank interests.
The dealer feels heavily penalised and does not understand why he will be prevented from reaping the benefit of his discovery.
The new law does not seem to suit collectors despite the fact that it is intended to protect their interests. For instance, a 14th Century painting representing a Crucifixion by the Master of Giovanni Barrile was sold at Drouot in June 1999 for 12,8 million FF ($ 1,706 million) after an export licence was refused for it, a small price as if it had been allowed to leave the country such work would have fetched between $ 6 and 7 million. French museums pre-empted this painting and the vendors suffered a considerable loss without benefiting from the guarantees offered by the new law. In that case, they should not have offered it for sale at auction but should have chosen to take advantage of the 30-month period during which the State should have offered to acquire it for its market value.
Now, most experts are advising collectors not to apply for an export licence before an auction sale in order to avoid a refusal from the French Administration, which would bring the price of a work considerably down. Now, the best thing to do is to withdraw from a sale any work for which an export licence has not been granted.
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