Art Onboard Superyachts Intelligence Report

ART ONBOARD SUPERYACHTS INTELLIGENCE REPORT Moving Rare and Precious Art onboard Superyacht

ACREW and Pandora Art Services gathered art and marine industry experts to outline the unique risks of carrying art on-board superyachts and to propose solutions to minimise operational and incidental financial loss for owners, crew and stakeholders alike.

MOVING RARE AND PRECIOUS ART ONBOARD SUPERYACHTS ACROSS BORDERS is part of the ACREW Insights series. ACREW Insights are short conferences that deliver one topic of discussion to a highly targeted audience. ACREW Insights is intended to bring valuable education and dialogue to leading industry professionals. This report aims to share qualitative market intelligence to supplement the expert insight shared at the event in Monaco 2019 and to identify areas for future research and collaboration.

Conference participants included yacht management professionals, superyacht captains and crew members, specialist insurers, family office representatives, yacht specialists, art advisers, security experts, trained conservators, and shippers. In addition to covering a comprehensive range of industry knowledge, diverse scenarios and various categories of valuable objects were considered beyond fine art, comprising antiques, ancient artefacts, fabrics and textiles, and decorative art objects, inter alia.

The report addresses the following key risk areas identified at the event: •

CITES: Navigating The Regulatory Environment In High Seas

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Cultural Heritage Laws & Risks Of Moving Art Across Borders

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Procurement, Supply & Logistics In The Art World

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Art On Superyachts: Security Risks & Solutions

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Art Damage: Prevention, Conservation And Troubleshooting

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Data Capture Technology: Preservation & Insurance Implications For Fine Art On

Superyachts •

Managing Reputational Risk In The Event Of Arrest & Seizure

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1 | INDUSTRY PARTICIPANTS Introduced by Abigail McGrath, Director of ACREW, and moderated by Pandora Mather-Lees, superyacht art consultant, the exclusive discussion group hosted in the Yacht Club de Monaco brought together the following leading professionals in fine art, heritage and conservation bodies and the yachting industry:

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John E. Scanlon, Africa Parks, Former Secretary-General of CITES Dr. Holly Trusted, Honorary Senior Research Fellow and Former Senior Curator at the Victoria and Albert Museum Donald Christiansen, Director, Chelsea Art Group, Art Advisory Victor Jaques, General Manager, Hedley’s Group , Logistics Michael Pavluk, Vice President of Operations, Frankentek Yacht Security Systems Simon Gillespie, Director, Simon Gillespie Conservation Studio Paul Lindahl, CEO, Arius Technology Inc., Art Data Consulting Daniel Taylor, Partner, Taylor Hampton, Reputation Mangement Solicitors

OBJECTIVES OF THE EVENT 1.

To develop stakeholder awareness of the regulatory environment

1.1 Endangered Species on board

1.2 Cultural Heritage Laws 1.3 Additional risks 2.

To create a holistic approach for the secure installation of high value artwork and objects by harnessing the collective opinions of diverse art market stakeholders

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To explore the optimal best practice required for handling high value and vulnerable artwork and objects on-board

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To share experiences and to identify gaps in knowledge to enable more education on this topic

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EXECUTIVE SUMMARY | 2 With an increasingly globalised art market, we are witnessing a rise in the movement of art across borders, influenced by factors including the growth of international art fairs and exhibitions, Freeport storage solutions and the strength of emerging markets. The rise of the megayacht as a second home replete with outstanding interior décor also means increased mobility and movement of art. This presents risks and challenges for all industry stakeholders. In such an environment, compliance with regulatory standards and respect for the value of art, artefacts and decorative objects should underpin all fine art transactions, transportation and ownership. The ACREW Insights event together with Pandora Art Services explored some of the challenges faced by yacht industry companies and owners in the movement of valuable objects of across borders and into international waters.

In brief, participants concurred that there is a need to develop better industry awareness and capabilities in order to effectively manage the risks of carrying art on-board and also explored opportunities to prevent issues with innovative alternatives to onboarding priceless paintings.

Insights from the panel and interactive discussion with the wider audience revealed that the first step to securing the smooth installation and transport of fine art on superyachts lies in identifying gaps in stakeholder knowledge and developing capabilities to address risks concerning fine art on-board.

Reasons cited for this gap include: •

concerns over secrecy and privacy, wherein owners or crew prefer not to disclose details of incidents or fail to adequately train staff by drawing on the knowledge of specialist consultants for fear of lack of discretion

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the understandable focus on other aspects of yachting procedures such as general health and safety which may displace additional compliance risk areas, often with serious legal repercussions

• and perhaps most common, the perception that incidents on-board are inevitable, “one-off”

occurrences, which cannot be prevented with pre-emptive consultation and actionable measures

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The lack of involvement of art professionals and support in terms of training and awareness

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The owner miscalculating what is insured concerning the art on board or even not declaring items which subsequently lack adequate cover.

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The disconnected environment of design, build and supply where multiple parties are involved (designers, art consultants, interior crew, yards, project management, yacht management) means that communication about, and responsibility for, the object gets diffused

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The complexities and high costs of managing cross-border issues concerning infringements with art and artefacts.

The key stakeholders identified whose capabilities regarding art risk on superyachts need to be strengthened include, but are not limited to: •

Interior designers who often present a high risk in instances where design and aesthetic considerations are prioritised above art safety and conservation concerns

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Yards (refit and build) who should offer better support for crew at the outset

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Yacht management tought to provide more proactive training programmes which incorporate risk management for art on yachts, and support Captains with integrating art risk measures into standard operating procedures;

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Captains and Crew who bear the burden of handling artefacts and dealing with the fallout of incidents occurring

Panelists also stressed the importance of documentation, which when prepared and maintained correctly can save yachts from arrest and scandal.

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3 | KEYNOTE SPEAKER’S REPORT CITES: Navigating the Regulatory Environment Keynote speaker and Africa Parks special envoy John Scanlon is the former SecretaryGeneral of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) provided an expert assessment on endangered species risks in international waters.

The superyacht industry faces equal if not additional exposure to the risks associated with endangered species in fine art, artefacts, decorative objects and antiquities. Given that superyachts reside in the domain of luxury and the high degree of mobility afforded by the use of private vessels, the superyacht sector warrants additional care. Ivory and rosewood are particularly high-risk materials, as both are heavily trafficked and ubiquitously used in art and design. Corals and teak particularly apply to yachts.

Scanlon stressed that while stemming trafficking activity at the source is important, as African Parks indeed does, the art industry has a vital role to play by limiting the market for illicit goods. Other key factors include monitoring the transportation sector, citing the Buckingham Palace declaration in particular, and improved forensic analysis to accurately date and locate objects with potential endangered species materials. Overall, Scanlon identified a need for all sectors of the chain in the art market to be informed on how to best protect endangered species and avoid unanticipated sanctions and penalties.

From the perspective of yacht owners and staff members alike, education on regulations surrounding endangered species is key as the transportation or installation of potentially illicit goods on board may incur smuggling charges punishable by prison and sizeable fines. It is not uncommon for superyachts to be impounded or halted in itinerary following discoveries made by customs officers boarding vessels.

Culprits including musical instruments (rosewood and ivory), ivory-accented furniture, antique pianos and butterfly specimens in artworks and even fish skeleton ornaments.

The regulatory environment for endangered species is an ever-evolving landscape which requires constant monitoring. New species are added to existing lists regularly, and best practice for yacht owners and crew requires up-to-date knowledge of regulations. Ivory is particularly problematic following Scanlon’s report that 100,000 elephants were slain in 3 years in Africa alone.

The art industry responds slowly, however auctions have been stopped or had items removed to avoid sale of infringing species.

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CULTURAL HERITAGE: The Risks of Carrying National Treasures onboard Keynote speaker Dr. Holly Trusted, Honorary Senior Research Fellow at the Victoria and Albert (V&A) Museum in London set out the fundamentals of National Treasure and Heritage laws with a focus on Britain and discussed their repercussions for art market stakeholders.

Different jurisdictions have distinct legislation comprising various thresholds for the export of cultural heritage, and failure to abide by national treasure export laws can lead to unforeseen charges including smuggling. Prevention through education is critical, and it is crucial for superyacht owner-collectors and their staff to be aware and stay abreast of export regulations in order to avoid fines and penalties.

In addition to regulations in place in key EU jurisdictions to control and limit the export of national treasure, the International Council of Museums (‘ICOM’) publishes and regularly updates ‘Red Lists’ of cultural objects at risk in jurisdictions outside of Europe, particularly the Middle East, Africa, Asiaand Latin America. These ‘Red Lists’ serve as industry checklists for individuals, organisations and relevant authorities to identify artefacts of heritage importance at risk of illegal sale or export.

Dr. Trusted stressed that cultivating an appreciation of national treasures is a fundamental starting point for navigating risk related to cultural heritage laws, including developing an understanding of the non-material value of artwork and considering ethical questions surrounding the private ownership of national treasures.

The UK Waverley Criteria, used to determine the national significance of artworks and objects in order to regulate their export from the UK, draws on the following factors to make its decisions: 1.

Connection with history and national life; 2.

Aesthetic importance; 3.

Significance for scholarship, particularly history and art history.

Although material value is not cited as a determining factor in the Waverley Criteria, artworks and objects are subject to consideration on a de minimis threshold basis. Industry stakeholders have also noted a perceptible rise in repatriation efforts of particularly high cost works recently.

Developments in scholarship and attribution are also key factors to monitor, as a favourable reattribution can change an object’s national heritage status, in turn informing export license policy.

Furthermore, there are precedents of legally granted export licenses being revoked post-hoc, which could impact superyacht owners with art collections and heritage objects in particular, as the status of an export license is likely to have implications for items travelling between territories.

Privacy is also a key element impacting the potential for costly national heritage-related legal battles: in one case, a Modigliani kept in Gstaad, Switzerland belonging to a private collector was discovered having left Italy as a result of media exposure, highlighting the need for discretion in the yachting and art industries.

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INDUSTRY PARTNER INSIGHTS | 4 PROCUREMENT, SUPPLY AND LOGISTICS IN THE ART WORLD Vessels are frequently taken as second homes, and the acquisition of a new yacht often goes hand-inhand with an art procurement programme.

WEIGHT An oft-occurring issue is the tendency to ignore the weight of artwork or objects procured by designers, staff or owners themselves. Weight restrictions invariably affect yachts to a greater degree than residence. Incidents occurred in which a sculpture and a table were refused onboard by a Captain for reasons of ballast and operational efficiency.

SPACE Procurement for art on yachts is invariably informed by space constraints, which are less likely to hinder the development of a collection in residences onshore. Despite their often gargantuan dimensions, there is less scope to alter spaces to fit around artworks on superyachts. Inexperienced designers or members of crew have been known, for example, to install paintings upside down or even cut inches off the edges to allow for artworks to fit on-board, often causing severe physical damage to artwork, in turn devaluing it significantly. One case was cited of a designer asking the Captain to move an object; this was, in fact, the base of the mast.

VALUE Art and yachts tend to serve as status symbols, a trend which has only been encouraged by the influx of new millennial buyers into the market. The value of art on-board, however, can far exceed the value of the vessel itself— a factor not always taken into account for protection or conservation purposes.

Two participants noted the procuring artwork more valuable than the vessel it is destined for.

SUSTAINABILITY When procuring artwork for a client, seasoned professionals should understand the specific environmental needs of artworks and the climate control capabilities of different vessels. Newer vessels, for example, tend to have sophisticated environmental control systems rendering them ideal homes for delicate works of art. Education of correct temperature and humidity requirements can go a long way to conserving the fabric of an artwork.

The effects of vibrations also needs to be accommodated.

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PROCUREMENT, SUPPLY AND LOGISTICS IN THE ART WORLD

RISK OF SEIZURE In the early stages of building a collection for a vessel, art advisors should keep in mind regulatory risks and anticipate movement across borders in order to prevent arrest or seizure of art. Artwork containing problematic materials such as butterflies should be flagged as high-risk for vessels ahead of installation, as evidenced in one case of a Damien Hirst butterfly sculpture confiscated in high seas and lost to the collector. One participant estimated that in his experience, approximately 30% of artwork is sold alongside the yacht, likely influenced by the administrative and logistical difficulties of transporting art across borders and between vessels, aircraft and private residences.

Another had experienced issues of sales being cancelled because the incumbent owner could not remove in-built artworks which were not to his taste

ANOMALOUS CHARACTERISTICS OF FINE ART AND ARTEFACTS Types of objects differ enormously. One example was mentioned of an Egyptian mummy being moved which had to be treated like a cadaver!

Fixing and moving valuable, intricate and heavy chandeliers and light sculptures which can run into six figure sums such as Dale Chihuly or Crystal Caviar containing hundreds of individual pieces requires intricate packing, unpacking and install – together with care over instructions for assembly, safety and maintenance.

Moving objects offboard causes other hazards such as a £250k carpet which had to be cut to accommodate a table which was subsequently moved. The holes then had to be ‘patched in’.

INCREASED MOBILITY The mobility afforded by vessels can prove a hindrance to logistics efforts because of the need to manage and account for multiple locations.

Transport can thus be complex, and involve shifting artwork between yachts, private residences, and jets and storage locations across several jurisdictions, requiring various points of contact for shipment and care with paperwork.

INSURANCE CONSIDERATIONS Shipping and logistics for artwork and artefacts is fraught with insurance complications. The condition of objects must be documented, with photos, every step of the journey. It’s especially important to obtain an accurate valuation and to review insurance policies to ensure sufficient coverage in the event of damage resulting from a more complicated shipping procedure and to ensure the art is not under or over insured across various policies.

Yacht management and owners need to understand the different types of insurance cover and what is insured. Art on board has limited cover in standard yacht insurance clauses with a low maximum limit and only certain perils being protected. Special fine art cover and transportation cover is important and objects must be declared in advance.

Concern was raised that the crew may not know how to look after the art and this has led to claims due to negligence. Carelessness is also a major cause of damage.

Legal Assistance Cover should be in place and sufficiently adequate to assist in any (non-criminal related) arrest or seizure.

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TAX IMPLICATIONS

TIME CONSTRAINTS One of the key risks for art logistics personnel in coordinating the transport of art and valuable objects onto vessels is the often tight deadline ahead of a vessel’s anticipated date of departure.

It is not uncommon for logistics companies to be approached about a move with little prior notice, allowing too little time for due diligence and planning.

Hassle-free shipping and transport of artwork between different jurisdictions demands awareness on behalf of owners, crew and logistics personnel in order to avoid fines or seizures as a result of tax-related transgressions.

SECURITY RISKS AND SOLUTIONS

DAMAGE PREVENTION Protection is not just about theft, but damage prevention: in some cases, a misplaced elbow or a glass of red wine have been known to wreak as much havoc as intruders. Proximity detection and deterrent technology systems implemented serve the dual function of flagging up imminent damage in addition to alerting owners and crew to potential theft.

BESPOKE LIGHTING SOLUTIONS Security systems can serve the additional function of protecting artwork and valuable objects from damage caused by environmental factors, such as light. Blackout systems and specialised shades integrated into a vessel’s security infrastructure can provide much-needed relief from glaring sunlight for delicate art and furniture on-board. Moreover, these can be deployed when the vessel is not in guest mode.

CONCEALMENT AND LIAISON WITH DESIGNERS Industry professionals understand the often immoderate demands of owners and designers in yachts, which often includes an aversion to visually intrusive systems. It is essential to work with designers to ensure that security infrastructure remains aligned with the aesthetic vision of designers and owners alike. With this in mind, discreet security options can deter damage and theft while integrating seamlessly with a vessel’s design.

Concealment options exist to enable hiding an important artwork behind panelling or behind a lesser value work or replica.

Technology available through Arius now allows for intricate and detailed replicas to be made which cannot be differentiated from the original. This solution takes away the headaches of transporting precious artworks and items of cultural importance, whilst enabling the original to be stored safely in a freeport or climate-controlled warehousing at the convenience of the owner. A copy of Van Gogh’s Iris was displayed to demonstrate high-fidelity verisimilitude of the textured reproduction to an original work.

One instance was raised of a painting stolen by two crew members that was not picked up for years – in fact until the heir inherited the ‘painting’ only to find it was a ‘copy’.

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DETERRENT TECHNOLOGY Proximity detection systems with sophisticated sensors include at the top end, moving AI robots and detection of drones and divers outside the vessel area as well as video analytics to capture movements near the artwork Deterrent systems (non-lethal) persuade an individual or group away from or off the vessel.

Acoustic deterrents emit warnings to intruders at a distance and then send directed frequencies, which humans are unable to withstand should they not capitulate.

RFID, GSM AND GPS TRACKING RFID alert systems with tags fitted to artwork will send a message if an object is moved This can kick in once a valuable object leaves the yacht and continues in transit on specially equipped lorries with security and tracking systems Finally, in the event of theft, industry experts note that incidents often go unreported out of concerns for privacy or even embarrassment, and in some cases actually going unnoticed for some time rendering them harder to solve.

DECOYS Replica copies are a pro-active way to eradicate the risk of theft and can, conveniently, be replaced if damaged.

ART DAMAGE, PREVENTION, CONSERVATION AND TROUBLESHOOTING Panellists identified that one of the key risks in maintaining the quality of art at sea lies in improper care and cleaning.

Risks: The manifold risks of handling and poor placement of art include

MOULD

GREASY FINGERTIPS

Mould growing because of damp storage conditions, the artwork had to be cleaned with a special vacuum cleaner to remove spores and treated with an anti-fungal treatment

Greasy fingerprints caused by handling, even from hands that might look clean– incredibly these show up on the surface of the canvas and in some cases can permanently mark the paint if not treated promptly

INDENTATIONS

ENVIROMENT & SURROUNDINGS

From fingers, dents objects where painting has been leaned against something or textured packing material (such as bubble wrap)

A canvas accrues dirt from its environment and surroundings and cleaning is vital. New technology now exists for cleaning to safely clean even the most sensitive surfaces, though not all conservators are trained in these new methods.

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LIGHT & CLEANING Damage from light or changes from cleaning can change the objects colour. A painting placed on a superyacht especially for its green tones befitting the interior design turned blue within months. UV light particularly discolours surfaces and all light is bad. Artificial and secondary light on a superyacht is bad (bouncing light) because of the reflective and bright light on yachts at sea.

CONSERVATION Conservation of objects is enhanced through capturing an object with Arius Technology’s intricate 3D scanning (to a 10th of a human hair) which can reveal foxing (oxidisation) or other damage thus rapidly and effectively informing conservation.

HANDLING Paint has been knocked, flaking off during handling.

On a painting with an impasto surface this is especially disturbing to the eye and a challenge for the conservator to restore. Flaky paint is caused by substrate expanding and contracting due to climatic changes on the vessel especially fluctuations in humidity

ART DAMAGE Works on superyachts have become creased which can take a number of days to tease out, ripped requiring a delicate gluing process or for a better result, a process of ’thread by thread’ repair which involves recreating the weave of the original canvas using a microscope, damaged by a microwave and red wine or other food/drink spills.

“It was reported that approximately 80% of issues can be prevented by a simple backing board applied by a conservator to the work, or by encasing in microclimate humidity frames and frames with UV white water filtered glass.”

KEYNOTE SPEAKER SPONSOR

MEDIA PARTNER

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MANAGING REPUTATIONAL RISK IN THE EVENT OF SEIZURE OR INCIDENTS BECOMING PUBLICISED

PRE-INCIDENT PREPARATION The first step is preparation: privacy and discretion must be ensured and accounted for in crew contracts in advance to prevent leaks of sensitive information.

Awareness of crew members or those associated with them being a weak link is vital to ensure protection.

Defamation is the publication of material that causes serious harm to the reputation of an individual or an entity, that tends to lower them in the estimation of others.

Comments are related to UK law only; jurisdictions will naturally vary.

POST-INCIDENT PREPARATION Crew must again be made aware of the importance of discretion in the immediate aftermath with clear communication being essential to minimise damage.

It is advisable to keep an eye on all social media accounts affiliated with the vessel or any of its crew to monitor for information leaks.

In severe cases injunctions are possible to prevent parties from speaking to the Press.

Privacy laws exist to safeguard yacht owners from invasion of their private lives, equally where lies have been told. Defamation (slander and libel) laws exist to protect their reputations from damage.

Private information relating to the owners or their business can be addressed with an interim injunction When an incident occurs, the vessel’s media lawyer should be contacted immediately with full details of inaccuracies, so that they can approach the press accordingly.

Five demands were cited which owners can resort to in the case of defamatory statements following an incident.

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4 | CONCLUSION

For captains, having fine art on board is a liability, extra care needs to be taken and attention becomes diverted from core issues. Security is also an issue. Spot checks have revealed lapses in security which endanger the valuables on board.

In order to minimise financial, security, legal and reputational risk, it is essential for stakeholders to engage in preventative training and conduct due diligence at every stage of the process from procurement to shipping and insurance. Communication must be strengthened between all parties involved in fine art transactions and movement, and a holistic approach from when a piece of art leaves a gallery through to customs, across borders and into a vessel must be adopted to ensure best practice. Patience is essential with cross-border movements, as shipments can face delays in processing at various customs checkpoints and clients need to anticipate this. For those concerned with the risks of art on board, reproductions are a great way to mitigate many of those outlined in the report.

The INSIGHTS discussion duly recognised associated issues and risks to be raised for future studies, including: •

Regulatory implications of moving art across borders with the emergence of new Anti-Money Laundering, Counter-Terrorist Financing and anti-trafficking legislation, particularly in the EU

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Implications of the changing restitution landscape, with a focus on Nazi-affiliated or looted artefacts

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Maritime archaeology and access to underwater historical wreckage sites

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Brexit implications on customs tariffs and tax considerations in the movement of art across EU and International waters

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Use of Freeports, their evolving status, and potential advantages for yacht owners and art collectors seeking to minimise risk.

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Report prepared by: Pandora Mather-Lees, an independent art historian of Pandora Art Services.

Pandora is creator of ‘The Practical Care of Onboard Art Collections’ a training course and onboard consultancy for Captains and Crew in managing risk with fine art and artefacts and a founder member of The Art Due Diligence Group, London.

Assisted by: Cerise Washington, Pandora Art Services Paola Tenconi, Research Assistant, Pandora Art Services Report production: Corinna Blanke (Marketing Manager) Sjoerd Spijkstra (Graphic Designer) ACREW Event Organisers: ACREW Pandora Art Services

Media Partner: Family Office Magazine Art & Museum Magazine For more information on services, guest speakers and sponsor partners Contact: Pandora Mather-Lees Pandora Art Services Email: pandora@rdg.global Telephone: +44 7067753372 About ACREW: At ACREW we aim to deliver high–standard worldwide events which introduce professional development opportunities to superyacht captains and crew. With our new series ACREW Insights, we offer events for specific focus groups like Family Offices & Management companies or Head Of Department.

Guest Organisations: Africa Parks Dr. Holly Trusted Hedley’s Group Logistics Arius Technology Inc. Chelsea Art Group Frankentek Yacht Security Systems Simon Gillespie Conservation Studio

For more information visit: www.acrew.com

Speaker Sponsor: Taylor Hampton Solicitors

© Pandora Art Services Ltd 2019

Disclaimer: This MI report on risk to fine art on superyachts does not purport to be a complete list of considerations, nor does it purport to highlight every issue that arises. Its purpose is to raise awareness of numerous key issues deemed relevant to the art market.

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1 | ADDENDUM OCTOBER 2019 Speaker Sponsors: Liberty Global Markets Insurance (Michael Burle), Hedley’s Group Logistics (Victor Jaques), Simon Gillespie of SG Conservation Studio, Taylor Hampton Solicitors (Daniel Taylor), Arius Technology (Pat Robinson), Frankentek Yacht Security (Mike Pavluk) Keynote Presentation: Pandora Art Services (Pandora Mather-Lees) Following a second event in Monaco during the yacht show in September 2019, the additional points were made which captains, crew and yacht management should take note of: LOGISTICS: Shipping documentation: Paperwork is critical, documentation must travel with the artwork. However, in cases where this documentation may be valuable, certified copies should be kept on board and the original stored in a safe. An example of this might be a 50 year old export certificate from Egypt.

Pertaining to documentation, Victor Jaques stated that the invoice was deemed the most critical to have on board as this proves proof of ownership, domicile, value, date of sale and other details at the point of purchase. In light of Brexit having an experienced AEO (Authorised Economic Operator) to handle customs clearance will enable speedier and more trouble-free clearances. In light of future cultural heritage laws, copies of an import licence and importer statement of items entering the EU will be vital to keep on board.

INSURANCE: It has been acknowledged that there can be gaps in documentation between the hull and marine policy and the art policy. Where the art policy will be a global, personal UHNW policy covering the portfolio for logistics and placement anywhere in the world, the H&M policy will only cover individual items up to a limited value which will not be sufficient for major valuable objects on board. Pairs & sets, deteriorated and un-professionally packed goods will not be covered and indeed the insured should be aware of other exclusions to the policy. A policy typically covers physical loss or damage to the artwork in the case of accidental damage, fire or theft items (where forceful entry can be proved) or water damage howsoever arising. It’s also important to keep valuations up to date so as not to undervalue a piece in the event of a loss.

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2 | ADDENDUM OCTOBER 2019 -

INSURANCE CONSIDERATIONS - SUPERYACHTS With respect to the policy an underwriter will expect that the insurers will make sure their location details are noted. Too many times a policy has location details that don’t include the Yacht so in the event of a claim it may not be covered. Owners may not inform the insurer when onboarding or it may not be on the schedule. An insurance company covering fine art would expect the client to consider the following; •Fire alarms, smoke alarms, cameras and intrusion alarm details of the vessel are required •Artworks should be professionally secured to the walls or surfaces so that the work cannot be damaged if bumped. It will also reduce vibrations/shifting caused by the vessel’s movements •UV protective plexiglass museum quality glazing is needed to reduce damage by light and to prevent damage from any glass breakage (not always possible but may affect premiums) •Artworks should not be located near an exterior door to prevent any water damage •Artworks should be in climate and humidity-controlled areas with the HVAC system on 24/7 Sculptures should be securely attached to the vessel •No artwork should be located on an open deck of the vessel unless protected from all exposure to the sun, sea water and weather •Damage to art caused by named storms is excluded, although can be included if required at a premium deductibles will cover minor damage.

•The vessel must be attended by a crew member at all times – even better if recruited from reliable sources with security consciousness such as those that use ex-military servicemen •If the vessel is placed on dry dock or other type for repairs, artworks to be safely removed and placed in a specialty fine art storage facility if no guard or crew is aboard with security expertise •If the vessel is leased or chartered, this presents additional risks - the insurance company should be notified and the crew should be alerted to monitor the safety of the art

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3 | ADDENDUM OCTOBER 2019 -

LOOTED ANTIQUITIES EXPORT RISK: EU Regulation 2019/880 New laws were passed by the European Union in 2019 stipulating that goods entering the EU for the first time without ‘EU status’, will be subject to border controls. This means that archaeological items over 250 years old will be required to have an import licence stating that they have been legally exported from the country of origin. For all other cultural goods including paintings, drawings, sculptures, watercolours and decorative arts, the threshold is 200+ years and €18,000 in value. In this case, importers will be required to make an Importer Statement confirming their legitimacy.

In both cases importers will be required to register the objects on a database recording details of the cultural goods being imported. This will constitute a record for anything subsequently expatriated and repatriated and for other parties to refer to as necessary. It is important to note that once the law is enacted in the member countries, that customs officers will be granted powers of arrest and seizure with criminal penalties for smuggling or fraud. It is vital now that all owners of artworks, furnishings and ornaments on board make sure they have a good inventory of their portfolio and in the case of those on yachts, that this is linked to the SOP’s from a content management system.

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4 | ADDENDUM OCTOBER 2019

MANAGING REPUTATION: FALSE ALLEGATIONS MADE AGAINST YACHT OWNERS When a crisis occurs, the sooner action is taken to intervene legally where appropriate the better. The most important thing is for the lawyer to establish the factual matrix with the Captain and Owner. Daniel Taylor explained that immediate communication with the client is vital to ensure the legal team is armed with all the facts. Once the factual situation has been bottomed out, the Publisher should immediately be contacted to be notiďŹ ed as to whether what has been published is false and defamatory, or a misuse of private information.

Demands can then be made for the immediate removal of the offending article online, an apology if in print, an undertaking not to repeat, and payment of damages and costs. If the Owner or Captain is asked for an opportunity to comment, then guided by legal advice, that opportunity to rebut any false allegations should be taken.

Contact details for full report or further information: Pandora Art Services: pandora@artonsuperyachts.com +44 746 035 2939 Photo Credits: Exterior Shots - Luna B, Courtesy of KK Superyachts, Sculpture by Vlastimil Beranek, Courtesy of Artsio Gallery, Interior Shot by David Churchill, Courtesy of Bannenberg and Rowell.

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