Thursday, January 27, 2011

The Import Restrictions "Check Valve"

In my last post I discussed political and moral implications of the latest State Department outrage against the US collecting community. There is another side to this decision, however, which must also be considered.

As an engineer I am very familiar with a mechanical device known as a "check valve." It is used to control the flow of fluids and gases in order to ensure that these substances pass only in one direction.

The State Department has just placed a "check valve" into the flow of ancient coins between the USA and the rest of the world. The effect of this is to prevent certain types of ancient coins from coming into the USA without documentation that for most practical purposes will prove to be impossible to obtain.

There has since been a great deal of discussion about the practical implications of this "check valve" upon the international numismatic market. Granted, for the moment it applies only to a small subset of all ancient coins. However, the intention of the AIA and its minions in the State Department is clearly to work toward gradually expanding import restrictions until they apply to all ancient coins.

Whilst the ACCG and to some extent the ANA, together with numismatic trade organizations, are fighting to prevent such a development, it seems clear that the State Department intends to continue to behave as though it were a wholly owned and controlled subsidiary of the AIA. No amount of public input, it seems, has any effect upon such decisions. Nor does there seem to be any respect for hallowed concepts such as due process of law, legislative intent, or fairness to the US citizens affected by these decisions. Archaeologie ueber alles!

The only constraints that appear to have any prospect for derailing this anticollecting juggernaut are legal and legislative action.

Legal action has indeed been initiated, and thus far the results (although not completely successful) have been encouraging. There is good reason to expect that the ACCG's FOIA lawsuit decision will be overturned on appeal, perhaps forcing additional and potentially very interesting disclosures regarding the secretive back-room deals that led to the Cyprus and China MOUs.

Meanwhile Italian (and forthcoming Greek) import restrictions add grist to the mill of the Baltimore test case lawsuit. Perhaps the court may take a different view from that of the State Department regarding the importance of public comment and the legislative intent of the 1983 CCPIA. In this observer's opinion, State has been skating on very thin ice for years in its one sided interpretation of this law and in its failure to comply with mandated reporting responsibilities.

While passage of legislation to permanently remedy these inequities will be a lengthy and difficult process, there is a new mood in Congress these days about "Big Brother" style government. Nowhere are such abuses of power more evident than in the Bureau of Educational and Cultural Affairs. Twelve Members of Congress have already voiced their concerns about the one sided manner in which this out of control agency has mismanaged US implementation of the 1970 UNESCO Convention. The Secretary of State has thus far not seen fit to take action to satisfy these concerns. The logical next step would be investigation of this agency by a Congressional subcommittee.

While such reactions to these import restrictions develop and expand, US collectors and dealers must now consider how they should conduct their activities so as to mitigate, as far as possible, the adverse effects of these import restrictions. The first step is to develop a clear understanding of what they mean in practice.

Peter Tompa has provided useful guidance in this article:

One of the murkiest aspects of these restrictions is that they are prospective. Coins of "Italian types" on the Restricted list (like coins of Cypriot and Chinese types before them) are assumed to have been "first found" in the modern state within whose borders they were struck. That is not, however, the accepted legal definition of discovery and it remains quite likely that this assumption will not be sustained when the Baltimore test case eventually progresses to its conclusion.

Meanwhile importers will be required to satisfy a requirement to provide an export permit from the state with which the relevant MOU was negotiated, or evidence that each item involved was outside that state on the date the MOU was agreed to, or ten years prior to the date the item was shipped. The exact nature of such documentation is not specified, however in the past Customs has shown a strong bias toward photographic evidence.

Importers may expect significant inconvenience (and perhaps also expense) if their shipments are detained in Customs. Should Customs elect to detain anything that resembles illustrations in the guidelines with which they are provided, many types of ancient coins that are not actually covered by these restrictions may be detained, with the burden of proof falling upon the importer. It would be wise for US collectors and dealers to whom coins are shipped from auction houses and dealers outside the US to obtain agreements from their sources that the documentation necessary to satisfy Customs will be sent with the coins. At this moment, it is unfortunately not clear as to exactly what form of documentation will be required.

Those who export ancient coins from the USA also have a concern: the ethics of exporting coins without first providing assurance that they may subsequently be reimported. Collectors, even if they are selling out without expectation of collecting again, have an ethical obligation to their fellow collectors in the USA to ensure that their coins do not leave the country without possibility of return. Dealers, even if they do not expect their shipments to be reimported, have a similar obligation. Here again, there is no clear standard as to the required format for documentation. The matter is presently under discussion and hopefully a standard will soon emerge.

If effective action is not taken by US collectors and dealers to provide assurance that their export shipments may subsequently be reimported, the import restrictions "check valve" will gradually deplete all coins on "restricted lists" from the US market. That would have adverse consequences for collectors and the trade, but also for archaeology. The resulting price rises would create a strong incentive to bring such coins into the USA illicitly, perhaps even adding to existing motivation for looters.


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