HUNGARY Law and Practice Contributed by: Katalin Andreides, Andreides Law
artwork’s authenticity to buyers, as well as obtaining indemnity agreements from sellers, ensuring that the seller guarantees the authenticity of the work. 6.4 Pre-Sale Checks for Auction Houses and Galleries In Hungary, auction houses and galleries are legally and ethically obligated to perform rigorous checks before selling artworks. This includes: • verifying authenticity; • conducting provenance research; • ensuring compliance with intellectual property and cultural heritage laws; and • maintaining transparent disclosure practices. Failure to perform these checks can lead to legal lia - bilities, including claims for breach of contract, fraud and copyright infringement. 6.5 Role and Responsibilities of an Art Adviser Art advisers play an important role combining mar - ket expertise, aesthetic judgment, financial acumen and legal knowledge. They often represent owners or buyers in transactions. Hungarian law requires them to disclose who they act for. Hungarian law does not allow for the direct acquisition of ownership between the principal and the third party the agent is dealing with. Instead, the agent independently enters into the contract in their own name but for the benefit of the principal. No direct legal relationship is established between the principal and the third party. The agent is liable for fulfilling all obligations of the third party only if they have expressly undertaken this responsibility. The buyer can enforce its rights under the sale con - tract only against the agent, not the principal. 6.6 Anti-Money Laundering Regulations and the Art Market A service provider engaged in the trade of cultural goods (artworks, antiques) has to be registered with the Hungarian Anti-Money Laundering and Counter- Terrorism Financing Office of the National Tax Author - ity (the “Authority”). The Authority must also approve the Art Market Participant’s internal policies and pro - cedures. The scope of the Hungarian AML Act – in accordance with the EU AML Directive – covers ser -
vice providers dealing with the trade of cultural goods (artworks and antiques) for transactions or series of transactions with a value of at least HUF3 million. Note, however, that providers are required to record certain data for cash payments of HUF300,000 or more.
7. Collections 7.1 Legal Status of Collections
Cultural objects registered in museums, institutions, archives, image and sound archives, public collec - tions and libraries are legally protected per se. Addi - tionally, the Office of Cultural Heritage Protection has the authority to declare privately owned assets and collections as protected. 8. Photography 8.1 When Are Photographs Protected as Art? According to the Hungarian copyright law, copyright protection applies to all works of literature, science and art, regardless of whether this law explicitly names them. As such, a photographic work qualifies as such a creation. Under Section 1 (3) of the Copyright Act, “Copyright protection applies to a work based on its individual and original nature arising from the author’s intellectu - al activity. Protection is not dependent on quantitative, qualitative, or aesthetic characteristics, nor on any value judgment regarding the standard of the work.” Therefore, the copyright qualification of photographic works requires the uniqueness of the depicted situ - ation, the appropriateness of the composition, an individual perspective, suitable technical solutions, special lighting conditions, and other aspects that reflect creative image-making decisions. The term “photographic art” in Section 1 (2)(i) of the Copyright Act does not imply any special quality classification or specific “artistic” nature. Photographs are subject to copyright protection if they are of an individual and original character.
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