CZECH REPUBLIC Law and Practice Contributed by: Daniela Kozáková, ŠIROKÝ ZRZAVECKÝ, attorneys-at-law
carried out in accordance with the legislation of the country of origin. If the customs office has reasonable grounds to sus - pect that the import rules have been violated or has reasonable doubts about its origin, or the authentic - ity or validity of the submitted documentation, it may detain the item. However, it must immediately notify the Ministry of Culture, which will preliminarily assess the justification for such detention within five work - ing days and inform the customs office whether the detention should continue to exist, in which case the item is handed over to the Ministry. The item will be stored professionally at a professional institution des - ignated by the Ministry, applying the rules for their safe storage and examination by a professional contribu - tory organisation, until a decision on their confiscation and subsequent return to the country of origin. The Ministry of the Environment is responsible for issuing the relevant CITES (Convention on Interna - tional Trade in Endangered Species of Wild Fauna and Flora) permits and enforcing EU Wildlife Trade Regulations. 6.3 Gallery and Auction House Liability for Fake Art Originality and authenticity are vital features of the purchase contract, as is purchase price. As part of the warranty, the seller is obliged to sell and transfer to the buyer a piece of work matching the quality, execution and dimensions agreed in the contract. In principle, the seller is not liable for defects that the purchaser could have observed with due care at the time the purchase contract was concluded, or that were not claimed immediately after the purchaser became aware of, or could have become aware of, their existence with due care; this can be no later than two years after the handover of the work, unless the seller knew about the defect at the time of handover. However, if the contract includes the seller’s express guarantee that the work is authentic, the seller is still liable. In the event of defects, the buyer can request immediate cancellation of the contract and the return of all monies against the return of the work (versus three other rather impractical options).
In addition, damages that would not be covered by claims for the seller’s liability for defects are also avail - able to the purchaser. The purchaser may also insti - tute criminal proceedings against the seller. 6.4 Pre-Sale Checks for Auction Houses and Galleries There is no explicit obligation to perform due diligence into the work’s title, although it is advisable to perform as much research as possible. The seller must also act with due professional care – this is important with respect to their liability towards the purchaser, as they must provide the warranty of good title for the work in the contract provided that the scope of the warranty is not limited by the seller in advance. The seller is obliged to notify the purchaser of any title defects of which they are aware. 6.5 Role and Responsibilities of an Art Adviser Until recently, it has not been customary to involve the art consultant when dealing with transactions, and collectors often only requested that an expert pro - vide an opinion on the authenticity of the work. As the market is currently growing rapidly, an increasing number of legal advisers and consultants are offer - ing their services. However, since only an open trade licence is needed in this case, their activities are not specifically regulated. 6.6 Anti-Money Laundering Regulations and the Art Market The Anti-Money Laundering Act (Act No 253/2008 Coll.) includes obligations that affect the following art market participants: • persons trading in (a) works of art (further specified in Appendix 3 to the Act) with a value of at least EUR10,000 (mainly galleries/auction houses selling contemporary art) and/or (b) cultural monuments or objects of cultural value (these are galleries/art dealers/auction houses selling modern or old mas - ters), or intermediaries to such trades (art advisers, certain art dealers, etc); and/or • persons authorised to store works of art accord - ing to Appendix 3 of the Anti-Money Laundering Act if their value reaches at least EUR10,000, and cultural monuments or objects of cultural value if
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