Regulated Properties: What the Law has to Say About Them

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1 Regulated Properties: What the Law has to Say About Them Michael McCullough, Partner Pearlstein & McCullough LLP The information in this presentation is not intended as legal advice and may not be relied upon for any specific matter.

2 Alcohol Archaeological Objects (including coins) Embargoed Goods Firearms and Weapons Human Remains Native American Artifacts Plants Materials Stolen property Wildlife Materials

3 Alcohol Sellers of wines and spirits have to follow federal, state, and local laws and regulations. Each seller must: Have the right, power, and authority to sell it. Have all necessary and required licenses to lawfully carry out transactions and ship the item to a buyer. Comply with all interstate commerce laws, including all laws around shipping and fulfillment.

4 Archaeological Objects (Including coins) Areas of Concern: Stolen from foreign country under a national ownership law; Illegally imported into the U.S.; and, Imported in violation of Cultural Property Implementation Act of 1983 (CPIA). Each of these concerns are about whether the owner has good title to the objects and can pass title to another party.

5 Archaeological Objects (Including coins) Stolen from foreign country under a national ownership law: Under the National Stolen Property Act ( NSPA ), the holder of foreign-sourced cultural material can be prosecuted under US criminal law and/or the material can be subject to civil forfeiture if it can be shown that the material was stolen from its source country. See United States v. Schultz

6 Archaeological Objects (Including coins) The essential elements of any claim of foreign government ownership include the following: the foreign law clearly vests title to the object in the state from and after a certain date; the object was exported after that date; and the exporter (or a subsequent owner or holder) knew (or consciously avoided knowing) at the time of export (or later comes to know) that the object was exported in violation of the law. 6

7 Archaeological Objects (Including coins) Illegally imported into the U.S.: US Customs laws: violation of US import requirements can trigger denial of entry, forfeiture and/or fines, depending on the particular case. In US v Steinhardt the importer s false declaration of Switzerland (from which the artifact was exported) instead of Italy as the country of origin (i.e., place of original manufacture) was held to be a material misstatement justifying forfeiture of the artifact. Other misstatements include description, value and tariff number.

8 Archaeological Objects (Including coins) Imported in violation of the CPIA: CPIA allows for the forfeiture of objects belonging to designated categories of archeological or ethnological material that are imported in violation of import restrictions imposed under either emergency restrictions or bilateral agreements between the US and a State Party. US has bilateral agreements with: Belize, Bolivia, Bulgaria, Cambodia, China, Colombia, Cyprus, El Salvador, Greece, Guatemala, Honduras, Iraq, Italy, Mali, Nicaragua, and Peru.

9 Embargoed Goods Under OFAC rules, the trade of embargoed items from the following countries may raise legal concerns: Burma (Myanmar) Only jadeite and rubies are prohibited Cuba Iran North Korea Sudan Syria Exceptions are for items imported prior to the embargo (except in the case of Iran) or Informational Materials.

10 Firearms and Weapons Most weapons can't be sold unless by a licensed seller because of strict federal and state government regulations and international laws banning the sale of these items. If you are helping to settle an estate, weapons can only be legally shipped to heirs through a registered dealer, even when no cash trades hands. Some states exempt the sale of antique firearms, but the definition of what qualifies as an antique can be very specific.

11 Human Remains Native American grave-related items are prohibited from sale under The Native American Graves Protection and Repatriation Act ( NAGPRA ) Tibetan prayer skulls are not restricted specifically under any US law. Pre-Columbian, African and Oceanic works of art may contain shrunken heads, other skulls, hair, teeth and other human bones. Pre-Columbian and African works may be restricted from import under the CPIA.

12 Native American Artifacts Various laws restrict the sale of Native American objects: The Indian Arts and Crafts Act NAGPRA The Federal Cave Protection Act Archaeological Resources Protection Act ( ARPA ) State laws: Arizona, Colorado, Kansas, New Mexico, Oklahoma, Texas, and Utah.

13 Native American Artifacts: NAGPRA restricts the trade in: Items from Native American or Native Hawaiian grave sites, such as: Funerary object placed with the dead Grave marker Human remains Sacred items used by Native American religious leaders in ceremonial practices, such as: Ceremonial masks Prayer sticks

14 Plants Materials Some plants are listed on the Endangered Species Act of 1973 ( ESA ), such as Mahogany. Some plants are restricted from importation by the Convention on International Trade in Endangered Species of Wild Fauna and Flora ( CITES ), such as Mahogany, Rosewood, and others.

15 Stolen Property The sale of stolen property violates state, federal, and international law. The National Stolen Property Act ( NSPA ) prohibits the interstate or international transportation of stolen property, as well as the receipt or fencing of stolen property, if worth more than $5,000.

16 Wildlife Materials Bird Feathers and Parts: NO: trade in bald and golden eagles under the Bald & Golden Eagle Protection Act NO: trade in migratory bids under the Migratory Birds Treaty Act of NO: wild birds under the Wild Bird Conservation Act YES: limited commercial trade in other bird species under the ESA, subject to specific requirements.

17 Wildlife Materials: Commercial Trade in Ivories African Elephant Ivory: NO: import into United States (forbidden by Ex. Order). YES: commercial export of ESA antiques or de minimis amounts. YES: limited interstate commercial trade of ESA antiques or de minimis amounts, including in NY (in limited circumstances and with license) and CA, but not in NJ. 17

18 Wildlife Materials: Commercial Trade in Ivories African Elephant Ivory: Export YES: commercial export of ESA antiques or de minimis amounts. Owner affidavit stating continuous possession in US since prior to 9/22/1982 (or legally imported thereafter with a CITES pre convention certificate); and, Documentation supporting continuous possession in US since prior to 9/22/1982, such as a dated: purchase receipt, photograph, inventory or insurance records, appraisals, etc.; and, Outside expert s ESA antique affidavit (at least 100 years old and not restored with restricted material since 12/28/1973) or expert s ESA de minimis calculation (that ivory comprises less than 200 grams). 18

19 Wildlife Materials: Commercial Trade in Ivories African Elephant Ivory: Interstate Commercial Trade YES: limited interstate commercial trade of ESA antiques or de minimis amounts, including in NY (in limited circumstances and with license) and CA, but not in NJ. If you are in a state where there are no regulations, then you must follow the Federal rules. If you are in a state with regulations, then you must follows both Federal and State rules. 19

20 Wildlife Materials: Commercial Trade in Ivories African Elephant Ivory: Interstate Commercial Trade Federal rules for commercial trade : Owner affidavit stating continuous possession in US since prior to 9/22/1982 (or legally imported thereafter with a CITES pre convention certificate); and, Documentation supporting continuous possession in US since prior to 9/22/1982, such as a dated: purchase receipt, photograph, inventory or insurance records, appraisals, etc.; and, Outside expert s ESA antique affidavit (at least 100 years old and not restored with restricted material since 12/28/1973) or expert s ESA de minimis calculation (that ivory comprises less than 200 grams). 20

21 Wildlife Materials: Commercial Trade in Ivories African Elephant Ivory: New York Commercial Trade Outside expert s species ID; and, Owner affidavit stating continuous possession in US since prior to 9/22/1982 (or legally imported thereafter with a CITES pre convention certificate); and, Documentation supporting continuous possession in US since prior to 9/22/1982, such as a dated: purchase receipt, photographs, inventory or insurance records, appraisals, etc.; and, Expert s NYS de minimis calculation (that ivory comprises <20% of object s total, calculated by volume or weight)[for intrastate sales only]; and, NYS DEC license application with expert s affidavit and supporting documentation; and, Outside expert s ESA antique affidavit (at least 100 years old and not restored with restricted material since 12/28/1973) or expert s ESA de minimis calculation (that ivory comprises less than 200 grams). 21

22 Wildlife Materials: Commercial Trade in Ivories African Elephant Ivory: California Commercial Trade Outside expert s species ID; and, Owner affidavit stating continuous possession in US since prior to 9/22/1982 (or legally imported thereafter with a CITES pre convention certificate); and, Documentation supporting continuous possession in US since prior to 9/22/1982, such as a dated: purchase receipt, photographs, inventory or insurance records, appraisals, etc.; and, Outside expert s ESA antique affidavit (at least 100 years old and not restored with restricted material since 12/28/1973) or expert s ESA de minimis calculation (that ivory comprises less than 200 grams). 22

23 Wildlife Materials: Commercial Trade in Ivories Asian Elephant Ivory (and All other ESA-listed species): YES : commercial import into United States. YES: commercial export of ESA antiques. YES: limited interstate commercial trade of ESA antiques, including in NY (in limited circumstances and with license) and CA, but not in NJ. 23

24 Wildlife Materials: Commercial Trade in Ivories Asian Elephant Ivory (and All other ESA-listed species): YES : commercial import into United States with: ESA antique affidavit (at least 100 years old and not restored with restricted material since 12/28/1973); and, CITES export permit from the country of export. 24

25 Wildlife Materials: Commercial Trade in Ivories Asian Elephant Ivory (and All other ESA-listed species): YES: commercial export of ESA antiques: Owner affidavit stating continuous possession in US since prior to 9/22/1982 (or legally imported thereafter with a CITES pre convention certificate); Documentation supporting continuous possession in US since prior to 9/22/1982, such as a purchase receipt, dated photographs, inventory records, insurance records, dated appraisals, etc.; and, Outside expert s ESA antique affidavit (at least 100 years old and not restored with restricted material since 12/28/1973); and, CITES pre-convention certificate issued by US Fish and Wildlife Service. 25

26 Wildlife Materials: Commercial Trade in Ivories Asian Elephant Ivory (and All other ESA-listed species): YES: limited interstate commercial trade of ESA antiques, including in NY (in limited circumstances and with license) and CA, but not in NJ. If you are in a state where there are no regulations, then you must follow the Federal rules. If you are in a state with regulations, then you must follows both Federal and State rules. 26

27 Wildlife Materials: Commercial Trade in Ivories Asian Elephant Ivory (and All other ESA-listed species): Federal rules for commercial trade: Owner affidavit stating continuous possession in US since prior to 9/22/1982 (or legally imported thereafter with a CITES pre convention certificate); and, Documentation supporting continuous possession in US since prior to 9/22/1982, such as a dated: purchase receipt, photograph, inventory or insurance records, appraisals, etc.; and, Outside expert s ESA antique affidavit (at least 100 years old and not restored with restricted material since 12/28/1973). 27

28 Wildlife Materials: Commercial Trade in Ivories Asian Elephant Ivory (and All other ESA-listed species): New York rules for commercial trade: Outside expert s species ID; and, Outside expert s ESA antique affidavit (at least 100 years old and not restored with restricted material since 12/28/1973); and, Owner affidavit stating continuous possession in US since prior to 9/22/1982 (or legally imported thereafter with a CITES pre convention certificate); and, Documentation supporting continuous possession in US since prior to 9/22/1982, such as a dated: purchase receipt, photographs, inventory or insurance records, appraisals, etc.; and, Expert s NYS de minimis calculation (that ivory comprises <20% of object s total, calculated by volume or weight) [for intrastate sales only]; and, NYS DEC license application with expert s affidavit and supporting documentation. 28

29 Wildlife Materials: Commercial Trade in Ivories Asian Elephant Ivory (and All other ESA-listed species): California rules for commercial trade: Outside expert s species ID; and, Outside expert s ESA antique affidavit (at least 100 years old and not restored with restricted material since 12/28/1973); and, Owner affidavit stating continuous possession in US since prior to 9/22/1982 (or legally imported thereafter with a CITES pre convention certificate); and, Documentation supporting continuous possession in US since prior to 9/22/1982, such as a dated: purchase receipt, photographs, inventory or insurance records, appraisals, etc. 29

30 Wildlife Materials: Commercial Trade in Ivories Mammoth: New York rules on commercial trade: Outside expert s species ID; and, Outside expert s ESA antique affidavit (at least 100 years old and not restored with restricted material since 12/28/1973); and, Expert s NYS de minimis calculation (that ivory comprises <20% of object s total, calculated by volume or weight]); and, NYS DEC license application with expert s affidavit and supporting documentation. 30

31 Wildlife Materials: Commercial Trade in Marine Mammals Whales, Walruses & Others Marine Mammals: Dolphins, porpoises, whales, seals, sea lions, manatees, dugongs, sea cows, marine (sea) otters, polar bears and walruses (under jurisdiction of the U.S. Fish and Wildlife Service) are protected under the Marine Mammal Act of 1972 ( MMPA ). NO: Import, Export or Interstate Trade in material taken from the wild after December 21, YES: Commercial Import, Export or Interstate Trade in ESA & MMPA-compliant material with a permit from NOAA (except for walrus). 31

32 What is an appraiser to do? Don t appraise restricted property that cannot be legally traded. Do get contractual representations and warranties from the client if the restricted property can be legally traded. Do think about Hypothetical Conditions and Extraordinary Assumptions in your appraisal. And state them!

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