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section heading icon     the Act

This page highlights features of the Resale Royalty Right for Visual Artists Act 2009 (Cth), ie the Australian droit de suite law.

It covers -

The Act [here] has been promoted as providing for a statutory resale royalty right for Australian visual artists. The right will be inalienable and endure for the life of the artist plus 70 years, ie the default term of copyright in Australia. It will entitle a visual
artist to a royalty payment on the sale price of any commercial resale - above a $1,000 threshhold - of that creator's original works of art. The resale royalty payable is a flat 5% of the sale price on the commercial resale of an artwork.

The expectation is that the scheme will allow visual artists to share in the commercialisation of their work in the secondary art market, although as noted in the preceding page of this profile leading artists (or their estates) will in practice gain the most revenue. The Act has been characterised as benefitting -

visual artists who derive their main creative income from the initial sale of original works. These artists do not have the same range of opportunities as other creators such as writers and composers to earn money through licensing reproductions, public performances or broadcasting their work.

subsection heading icon     coverage

The Act covers mainland Australia, Tasmania and the external territories, aiming to "avoid the possible situation in which Australian art market professionals shift their operations to external territories to evade the scheme". The royalty right under the Act is only enforceable in an Australian federal court or the relevant court of a State or Territory.

The royalty scheme will apply to Australian citizens and permanent residents, with foreign nationals covered on a reciprocal basis.

The Act, like most Australian legislation, does not have retrospective effect. It covers resales made after the legislation takes effect. (Works, however, might have been created long before the legislation.)

Liability to pay resale royalty on the commercial resale of an artwork arises at the time of the commercial resale of that work.

The royalty right is absolutely inalienable (eg through sale, assignment, bankruptcy or insolvency), a provision is to prevent artists being pressured into assigning their right in order to secure a slightly higher primary sale price or to use the royalty right as security for a loan. Any income from the right would not be available for distribution amongst creditors in the case of bankruptcy or insolvency.

The royalty right cannot be waived (s34), a provision "to prevent artists being exploited and pressured into waiving or otherwise dealing detrimentally in their right to receive resale royalty". Note however, that rights owners are not compelled to exercise their rights (s23), a provision that some critics have interpreted as equivalent to a waiver.

subsection heading icon     resale

The resale royalty right is defined as the right to receive a 'resale royalty' on the commercial resale of an artwork. That work is defined as an original work of 'graphic or plastic art' created either by an artist or artists or under the authority of the artist or artists (thus including prints and sculptures made under the direction of an artist using a production team at a bronze foundry.

The non-exhaustive list of works in the Act reflects examples identified in Directive 2001/84/EC of the European Parliament and of the Council (27 September 2001) on the resale right for the benefit of the author of an original work of art.

The Act also covers original visual arts or craft such as: batik, weaving, fine art jewellery, wood carving, digital and video art, and multiple originals produced in a limited edition authorised by the artist (such as an etching or a bronze sculpture.)

The definition of an artwork in relation to resale excludes architecture (including a drawing, plan or model for a building) and the original manuscripts of writers and composers. The Act emphasizes earning in relation to originality and thus excludes items such as posters, mass-produced photographic or other prints, films and industrial design.

There is no resale royalty right on a commercial resale of an artwork where the sale price is less than $1,000. (Where the sale price is paid in foreign currency, the threshold amount is calculated using the exchange rate applicable at the time of the commercial resale). The figure includes GST but excludes buyers premiums and other charges imposed by galleries or auction houses, which as noted elsewhere on this site can add 20 or even 30% to the cost.

The Government indicated that use of a threshold on the minimum resale price before a royalty is imposed will "reduce administrative costs associated with making multiple, very small payments to artists ... ensuring that benefits are spread across a greater number of artists" in a balance with "administrative efficiency as relates to both the collecting agency and the art market professionals required to comply with the scheme".

The Act gives jurisdiction to the Federal Court - and to State and Territory Supreme Courts under Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 4 - regarding enforcement of the resale royalty right on the commercial resale of an artwork, determination of who is the holder/s of a resale royalty right, enforcement of the payment of a share of the resale royalty, recovery of a resale royalty wrongly paid by the collecting society, enforcement of civil penalty provisions and other matters arising under the Act. The Federal Magistrates Court also has jurisdiction.

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