2009 US-China MOU on Restrictions on the Import of Art and Archeological Materials into the US
The 2009 US-China Memorandum of Understanding on Restrictions on the Import of Art and Archeological Materials into the United States
On January 14, 2009, China and the United States signed The Memorandum of Understanding Between the Government of the United States of America and the Government of the People’s Republic of China Concerning The Imposition of Import Restrictions on Categories of Archeological Materials From the Paleolithic Period Through the Tang Dynasty and Monumental Sculpture and Wall Art At Least 250 Years Old(the “MOU”). In the main, the MOU calls for the US to restrict the entry into the US of objects designated as archeological material and produced in China prior to 907 AD (the last year of the Tang Dynasty) and monumental sculpture and wall art at least 250 years old.
In order to implement the MOU, the US Customs and Border Protection agency (the “CBP”) adopted a rule amending CBP regulations to impose import restrictions on a wide variety of “archeological material” from China, as enumerated in the “Designated List of Archeological Material of China” set forth in 19 CFR 12.104g(a) (the “Designated List”). The revised CBP regulation (the “Revised Customs Regulation”) sets forth the guidelines that must be followed in connection with the importation of any Chinese objects into the US that qualify as “archeological materials” under the definition in the Revised Customs Regulation itself and the Designated List. 
The operative language of the Revised Customs Regulation makes importation of materials on the Designated Materials List subject to the restrictions the CBP Regulations. Those restrictions are as follows:
Requirement that lawful exportation be backed up by documentation: Section (a) states that “No designated archaeological or ethnological material that is exported ... from the State Party … may be imported into the United States unless the State Party issues a certification or other documentation which certifies that such exportation was not in violation of the laws of the State Party (italics added).”
Alternative documentation permitted. Section (b) creates an alternative to having to provide documentation issued by the “State Party” (in this case, China) by allowing the importer/consignee to present to US Customs, in lieu of “State Party documentation”, other “satisfactory evidence” that the object in question was exported from the State Party either (i) not less than ten years before the date of importation, or (ii) on or before the date on which such material was designated under Section 2604. For Chinese material, this date is January 16, 2009.
The next question, of course, is what, precisely, qualifies as “satisfactory evidence.” The answer can be found in 19 USC 2606. To support the assertion that the object was exported from China at least ten years prior to the date of importation in to the US (or on or before January 16, 2009), the importer must provide all of the following:
- one or more declarations under oath by the importer (or the person for whose account the material is imported), stating that, to the best of his knowledge the material was exported from the State Party (i) not less than ten years before the date of entry into the United States or (ii) on or before January 16, 2009 , and that neither such importer or person contracted for or acquired an interest in such material more than one year before the date of entry of the material; and
- a statement provided by the consignor, or person who sold the material to the importer, which states the date, or, if not known, his belief, that the material was exported from the State Party (i) not less than ten years before the date of entry into the United States (ii) on or before January 16, 200, and the reasons on which the statement is based.
Experienced importers of art and antiques into the US are likely to be familiar with these requirements, and with the form that such declarations and statements typically take. US Customs officials have been accepting such statements, oaths and similar documentation for many years in connection with imports from countries other than China; the requirements in connection with Chinese objects are no different from those applicable to all goods that are subject to import restrictions under 19 USC 2606.
There is, however, an issue raised by the MOU and Revised Customs Regulation that is unique to China, which is the question of what constitutes “a certification or other documentation which certifies that such exportation was not in violation of the laws of China,” for this is what will be required for objects exported from China after January 16, 2009.
The answer to what constitutes “legal exportation” from China is obviously a question of PRC law, and is to be found in the relevant laws and regulations in China.
The PRC legal framework
At the top of the governmental and administrative hierarchy for art in China is the Ministry of Culture, which, like all ministries in China, is directly subordinate to the State Council. The State Administration of Cultural Heritage (“SACH”), which is responsible for all cultural relics policy in China, is directly administered by the Ministry of Culture. SACH, sometimes referred to as the Cultural Relics Bureau, has subordinate divisions at the provincial and certain municipal levels. Although technically having a sub-ministerial ranking, SACH has unusually broad powers and an unusually high level of independence, which allow it to function virtually as a ministry itself, without much micromanagement by the Ministry of Culture.
Laws applicable to art and to objects that are designated “cultural relics” (文物) are passed at the level of the National People’s Congress (“NPC”), but are principally drafted and revised by the Ministry of Culture and, if the law is applicable to cultural relics, SACH. Rules and regulations that are below the status of a “law” are ubiquitous in the PRC, and are where the nuts and bolts, as well as the teeth and claws, of the higher-level laws are to be found. Rules and regulations can be promulgated at many levels, including at the State Council and Ministry level, provincial level, autonomous region, municipality level, and possibly below. The relative legal effect of any two rules will depend upon which type of rule each is and the level at which it was passed.
The current law governing cultural relics in China is the PRC Cultural Relics Protection Law (中华人民共和国文物保护法), amended and passed in 2002 (the “Cultural Relics Law”). The previous law was the 1982 Law on the Protection of Cultural Relics, which superseded the Interim Regulations on Cultural Relics Protection Management promulgated in 1961. Prior to 1961, scattered rules and regulations were all that existed.
Beginning with the passage of the Cultural Relics Law in 2002, China entered a lively period which saw the promulgation of a series of new laws and regulations on the protection of cultural relics, including the 2003 Cultural Relics Protection Regulations, the 2007 Administrative Measures for the Entry-Exit Examination and Verification of Cultural Relics(the “Measures”) and the 2007 Standards for the Entry-Exit Examination and Verification of Cultural Relics(the “Standards”). The new regulations were specifically designed to further two increasingly important policy aims: (1) to broaden the definition of “cultural relic” through resetting the operative dates so as to include within that definition far more objects than previously (thereby entitling such objects to legal protection), and (2) to strengthen the government’s control over the export of objects designated as cultural relics through re-defining the role of the Examination Agencies.
PRC Export Procedures
Obtaining versus exporting. Article 50 of the Cultural Relics Law permits an individual to obtain Chinese art through many channels, including inheritance, receipt as a gift, purchase from a cultural relics store or auction house, and mutual exchange or transfer of “cultural relics legitimately owned by individual citizens.” However, the Cultural Relics Law imposes extensive restrictions on the export of Chinese art and enforces these restrictions through the export permit system. Under this system, any object leaving China which is designated a “cultural relic” must be accompanied by an export permit (an “Export Permit”) issued by a cultural relics entry-exit examination and approval agency designated by SACH (an “Examination Agency”).
At present, there are 14 Examination Agencies qualified to examine and approve the export of cultural relics from China. They are located in Beijing, Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Fujian, Anhui, Shandong, Henan, Hubei, Shaanxi, Hebei and Yunnan. Three other agencies also exist in Shanxi, Sichuan, and Liaoning, but they are not, as of the time of this writing, qualified as Examination Agencies. While SACH is reluctant to discuss the non-qualification of these three agencies in detail, SACH implied in conversation that those three agencies lost their qualified status due to failure to live up to the new, heightened requirements for Examination Agencies under the current laws and regulations. 
Export Permits and the problem of the importer’s copy. The document that must be obtained in order to legally export cultural relics from the PRC is an Export Permit (文物出境许可证),which is issued by one of the Examination Agencies. An Export Permit is issued in triplicate. One copy is retained by the issuing Examination Agency, and one copy must be provided to PRC Customs at the time of export by. The third copy is retained by the party actually doing the exporting.
The Export Permit scheme cannot be faulted for being irrationally byzantine, or out of line with international practice for export of goods. In actual practice, however, when goods such as art objects are shipped out of China, it is impossible for a foreign purchaser to obtain one of the three copies of the Export Permit prior to the export of the objects in question. As stated above, one of the three copies is retained by the person actually “taking” the item out of China. In most cases, this will be a shipping company, as the actual exporter. The shipping company will retain its copy of the Export Permit for exportation purposes. Once the goods have been exported, the shipping company may make a copy and send either the original or the copy to the foreign purchaser or consignor, while retaining the other copy for the shipping company’s own records. In the past, shipping companies did not usually send copies of the Export Permit to the consignors, primarily because buyers/consignors rarely asked for this document. In the post-MOU era, it is now critical for foreign buyers to obtain their own copy of the Export Permit, so as to be able to import the object on the US Customs side.
Temporary importation. A separate procedure permits objects to be temporarily imported into China, and requires the completion of a Temporary Import Form (临时进境文物登记表). This procedure is typically used for the importation of an object into China for the purpose of appraisal, exhibition, sale at auction or sale through a licensed cultural relics store. The Temporary Import Form will be exchanged for an Export Permit at the time the item is to be exported. The Temporary Import Form is generally valid for six months. Objects which remain in the PRC for more than six months must be “re-exported” under normal Export Permit application procedures.
For sheer ease of paperwork, many PRC auction houses and other parties (such as museums) recommend that potential overseas sellers or exhibitors simply carry the relevant objects into China, and handle the importation paperwork on the ground in Beijing or Shanghai, for example, once they have arrived. This method has tax benefits, in that items hand-carried in are less likely to be assessed VAT or import duty, whereas goods shipped in, unless another tax exemption is available (e.g., antiques more than 100 years old are exempt from import duty) will be subject to those taxes.
Satisfaction of the MOU requirement for import into the US . Assuming that the purchaser/importer does have a copy of the Export Permit in his or her possession to present to US Customs, the presentation of that Export Permit at the time of import into the US constitutes proof of legal export from China of the object – it constitutes the legally-required “satisfactory evidence.” As no other documentation is required under PRC law for the legal export of an art object or object under the jurisdiction, so to speak, of the Ministry of Culture, no other document can be required by US Customs according to the terms of the MOU or the Customs Regulations.
Different rules for contemporary art. The previous happy conclusion notwithstanding, it is important to flag here that as of August 2009 a new set of regulations governing the import/export of contemporary art came into effect in China. The Interim Provisions on the Management of the Import and Export of Fine Artestablishes a different set of requirements and procedures for the import and export of contemporary art: prior approval of the Ministry of Culture is now required for any import and export of all contemporary art work (including paintings, photographs, sculptures etc., but excluding art work mass-produced in amounts of 200 or more). (See CAL Newsletter, November 2009)
While the MOU and subsequent restrictions have caused significant consternation amongst art professionals as well as lovers of Chinese art in general, much of that concern may be attributable to the unusual manner in which the entire process was managed from its inception roughly seven years ago until it was passed from the State Department to US Customs, which has given rise to dissatisfaction within the legal community that the legislative thresholds that should have been applied to China and the imposition of the embargo under the UNESCO treaty were sidestepped.
The Cultural Relics Law has increased the requisite number of “Responsible Examiners” in each Examination Agency. The previous rules required only seven to twelve full-time employees in each Examination Agency, only two of whom were required to be qualified as “cultural relics responsible examiners” (“Responsible Examiners”). For each to-be-exported work of art, only two Responsible Examiners were required to appraise and issue export permit together. The Measures now require each Examination Agency to have at least seven full-time cultural relics appraisers, among whom, at least five shall be Responsible Examiners. For each to-be-exported work of art, a minimum of three cultural relics appraisers must participate in the decision-making process, at least two of which appraisers must be Responsible Examiners. An exit permit can be issued only upon the unanimous agreement of the Responsible Examiners. A Responsible Examiner must have a bachelors degree or above, and an intermediate or higher level professional title in the field of cultural relics. The Examiner must also pass the qualification exam given by SACH, in one of five fields covered by the exam: pottery, jade, bronze, paintings or miscellaneous items. It is worth noting that from the commencement of the qualification exam system in 1991 until 2008, a total of 164 people had passed the exam.