Superyachts: Risk of sanctions or seizure if EU import rules breached on artwork and cultural objects

Equiom Tax Services Limited (ETSL) has extensive experience in providing VAT and Customs consultancy and compliance services for superyachts in the United Kingdom (UK) and European Union (EU).

The EU Regulation 2019/880 on the introduction and import of cultural objects (the "Regulation") represents a significant shift in the tax landscape for the importation of artwork and cultural objects into the EU. The Regulation's objective is to combat the illicit trafficking of artwork/cultural objects, aiming to deter international money laundering and terrorist financing.

Whilst the Regulation came into force in June 2019, the prohibition on the import of cultural objects illegally removed from a non-EU country (see Category A objects below) came into effect in December 2020. The deadline by which the rules for Category B and C objects are to come into effect is 28 June 2025. After this date, artwork and cultural objects will be subject to stringent border controls.

EU Regulation Categories 

The EU regulation classifies cultural objects as Part A, Part B and Part C, summarised below in high-level form for your ease of reference:

• Category A: Items that have been illegally exported from their country of origin, in accordance with the laws of that country in force, at the time of exportation.
• Category B: Items from archaeological excavations exceeding 250 years of age regardless of their value.
• Category C: Items such as paintings, sculptures, prints and coins older than 200 years with a minimum value of EUR 18,000.

Please also be aware that in addition to the EU Regulation, individual EU countries may have additional local heritage licence requirements especially regarding National Treasure artworks.

How does this affect superyachts? 

In our experience, we anticipate the Regulation will impact artworks held on superyachts crossing EU maritime borders, albeit the movement of all cultural objects will also be impacted.

The Regulation marks a new and more rigorous approach from Customs officials, constituting the first uniform rules to apply to the import of artwork and cultural objects into the EU. The objective appears straightforward - to prevent items unlawfully taken from their countries of origin from entering and/or being traded within the EU. However, its implementation may be considerably more complex, and the associated cost of compliance may be onerous. 

Whilst avoiding the import of an item into the EU may provide a short-term solution, in the long term, to ensure compliance with the EU Regulation, it is imperative that evidence, which may include export certificates, ownership history, proof of legal acquisition, license and/or statement of origin (ultimately proof of provenance) is retained throughout ownership of the artwork and/or the cultural object in question to ensure compliance with the EU Regulation.

The evidential burden rests squarely on the importer of the artwork/cultural object to demonstrate compliance with the Regulation. Sanctions for non-compliance will be determined in accordance with the national laws of the EU member state of importation, which may result in the seizure of the artwork/cultural object and/or the imposition of a significant fiscal penalty. Failure to comply will be deemed a criminal offence (akin to smuggling/fraud). There is no distinction between private and commercial yachts for the purposes of this regulation.

With the nearing June 2025 deadline, where the Regulation is expected to be rigorously enforced, understanding the requirements and how to comply is now a critical consideration. EU Customs officials will be monitoring artwork/cultural objects crossing international borders with the expectation that appropriate evidentiary documentation will be held by the importer.

In addition to collating evidentiary documentation, an import and/or heritage licence may be required. The process may take between three and six months to complete, so prior preparation is critical.

How can Equiom Tax Services Ltd. assist? 

• Artwork categorisation study in respect of regulation (EU) 2019/880;
• Preparation of the customs importation file subject to Part B or Part C clearance requirements; and
• Facilitate captain and or crew compliance training in preparation for EU Customs boarding the yacht.

With more than 50 years of industry experience, our Indirect Tax team possesses extensive knowledge in VAT and Customs formalities, guiding private and corporate clients in acquiring and managing luxury assets, including private jets and superyachts. For further information or a no obligation discussion please contact our team.

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. This article cannot be relied upon to cover specific situations, and you should not act, or refrain from acting, upon the information contained within this article without obtaining specific professional advice. Please contact Equiom Group to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees, and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.