Whose Treasure Is It Anyway? – On Laws Governing Restitution

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An intriguing motion picture entitled ‘Woman in Gold’[1] appeared in theatres recently. The film tells the story of an international lawsuit took over eight years to resolve, ending auspiciously in 2006 with the victory of claimant Maria Altman, who won back several paintings by Gustav Klimt that were illegally confiscated from her aunt, Adele Bloch-Bauer, by the Nazis. The paintings included a remarkable portrait of Adele herself, dated 1907.

1st published in Hungarian language in Magyar Tudomány, May 2016

 

The story lends renewed relevance to questions about an era the world has been trying to forget.

During the years between 1933 and 1945, the systematic plundering of cultural goods, artefacts, valuables and works of art from their owners, segregated on the basis of discrimination, reached unprecedented heights in Germany through a national policy of cultural raiding. This policy was linked to three terms: ‘Raubkunst’, ‘Entartete Kunst’, and ‘Beutekunst.’

Each of these three cases of state-sponsored cultural theft has different implications for ownership claims.

The notion of ‘Raubkunst‘ or robbed art, refers to pieces of art stolen by the state from its own citizens. In this case, legislative authority is abused, creating situations where a citizen is forced sell a piece of art, or an artefact was simply confiscated without any indemnification. There is no real transfer of ownership in this case. Even if the new owner claims title to the piece, no transaction, at least for one of the parties, preceded it.

In these cases, the original owners can seek restitution through civil law, something many people tried to accomplish immediately after the war. However, these claims met with only moderate success. Why? In some cases, the objective circumstances needed to correctly identify the rightful owners (of a given piece) or their descendants were often not present. While in other cases, accurate documentation about the work of art (or the work itself) was destroyed, thus hindering restitution, indemnification or reimbursement for damages.

The notion of ‘Beutekunst‘, or seized art, is nothing new. A category of looting, inherent to warfare, this type of theft has been has been a form of payment among soldiers for centuries, if not millennia.

Immediately after the end of the Second World War in May 1945, Stalin ordered the Allied Commission on Reception and Registration of Trophy Valuables to remove and transport back to the Soviet Union, with the help of the Red Army, 2.6 million pieces of art, 6 million books and an indeterminate amount of archive footage from German cultural institutions and archives. In such cases, restitution is regulated by public international law.

‘Entartete Kunst‘, or degenerate art, is an entirely different classification. The art pieces deemed degenerate and subsequently purged were often owned by museums, institutions of the state. These confiscated, and often destroyed pieces conveyed views or artistic directions incongruous with the national ideology. Private property was a concern only in rare cases where the artefact was on loan to institutions or on offer at a public auction. In these cases, state authorities conducted their confiscations with little concern to ownership and origin. On 16 July 1937, Nazi Germany placed hundreds of pieces of confiscated art on display in Munich as a presumed intimidation strategy. The exhibition served as comparison to the Grosse Deutsche Kunstaustellung, an exhibit opened just a day prior, which showcased pieces representing the ideology of a greater German culture.

The confiscated artworks were appraised by expert commissions before being sold off or destroyed[2]. Sales were entrusted to well-known art traders, such as Hildebrandt Gurlitt whose name has recently re-appeared in the media[3].

Legal grounds for restitution

Ever since the 19th century, the idea of ‘restitution‘ in international public law has been synonymous with the sanctity of private property amid hostile conflict. Scores of cases are linked to art confiscations (based on racial persecution) that took place during the World War II. In each case, the original owner has sought compensation for his loss or recovery of the stolen art.

The legal justification for restitution also has its roots in the Second World War. On 5 January 1943, the Allies proclaimed in the London Declaration[4] that every transaction where an artwork was sold or transferred in zones occupied or supervised by enemy forces shall be considered null and void, as it violates Article 56 of the Hague Convention of 1907[5]. The mutual return claims of the states rested upon these legal grounds, as the 18 undersigned countries warned everyone, especially those residing in neutral areas, not to purchase confiscated goods. The signatory countries upheld their right of nullification for every transaction, even transactions executed with mutual intent and appropriate transfer of title.

Following World War II, occupying allied forces based their own restitution regulations on the London Declaration, which was unanimously dismissed by German legal literature for years to come. Some German experts dismissed it by claiming unlawful procedure under the authority of the occupying forces. Others challenged the lack of international legitimacy of Law No. 59, passed by the US military government in its zone of occupation on 10 November 1947, which regulated restitution procedures. On the very same day, the French government adopted a similar statute: Law No. 120. Although British occupying forces followed the guidelines of Control Council Law No. 10 (20 October 1947) in practice, they only declared their own statute, No. 59, on 2 May 1949, as they found the returning of ownerless Jewish properties to the appropriate Jewish successor-organisations irreconcilable with their policies towards Palestine at the time.

From the viewpoint of international public law, an acceptable legal basis for the restitution of private property may have been a formal peace treaty. Restitution proceedings were heavily criticised for the seeming reverse burden of proof (the burden was placed on the possessors of contested art to prove their legal ownership), as well as the many debates between sellers and bona fide acquirers demanding restitution.

Legislative steps of restitution

As a first step, the London Declaration of 1943 banned the National Socialist Party and its organisational system, Law No. 2[6] of the Allied Control Council of 10 October 1945 seized all Nazi assets under protection of property. Assets were later returned to their original owners (churches, charities, unions and political agencies or their successors) by virtue of Directive No. 50 of 29 April 1947. These returns occurred without interruption, as nobody had to prove that goods (in almost every case illegally confiscated former Jewish wealth) had not been acquired through illicit means, i.e. racial persecution.

Proceedings became complicated when the new owners of confiscated Jewish weath were private persons or business corporations.

The American military government became the pioneer of restitution policy, issuing the Stuttgart State Council in April 1946 with the task of formulating the principles of restitution strategy and establishing a committee responsible for the assessment of ownership titles. With the help of German legal experts, the formulated propositions adhered to the German Civil Code or BGB (Bürgerliches Gesetzbuch). However, American leadership found these inadequate, claiming traditional legal instruments were unsuitable in solving current matters, since the propositions mainly addressed cases where possessions had been confiscated by the state. Business circles were pushing for rulings protecting bona fide acquirers, while limiting claimants to those having suffered the losses or their direct legal descendants.

German authorities were not given much say in the matter. Yet the American Jewish Committee was, and it successfully lobbied the American military governor, Lucius D. Clay, who endorsed the creation of an Allied Convention with its own jurisdiction. The American bill (later ratified as law) set the day of the proclamation of the Nuremberg Laws – 5 September 1935 – as the cut-off date; every legal act of any kind that took place after this date was deemed disputable if it concerned the valuables of Jewish or other racially persecuted persons.

Another point of the bill Clay considered important was the clause that stated any valuables without heirs to claim them should be considered the collective property of Jewish organisations. This point triggered heated debate between the occupying forces, and subsequently was not included in the final law.

 

Containing 95 sections, United States Military Government Law No. 59 entered into force on 10 November 1947 within the territories of Bavaria (sans the Rhenish Palatinate), Bremen, Hesse and Wuerttemberg-Baden.

Section 1 introduced the goals of the new law. It defined the property rights of people whose wealth was confiscated because of persecution for heritage, religious beliefs, citizenship, world-view or political views opposing national-socialism during the period between 30 January 1933 and 8 May 1945. And it stated that confiscated wealth should be returned to their original owners or the descendants thereof, the claims of any third person, even if acting in good faith, notwithstanding.

Section 2 defined unlawful transactions, stating that transactions conflicting with good morals, made under unlawful circumstances or under duress or threat of violence shall be deemed illegal. Furthermore, it determined that a state act or the abuse thereof may present adequate legal grounds for restitution.

Section 3 established the refutability of „property loss presumptions” in cases where the payment of the appropriate sale price and the free disposal of the goods could be proven.

Section 4 set 15 September 1935 as the date, after which every transaction was presumed to be a case of coercion. Thus transactions following this date were only deemed legal and enforceable if they were made independent of National Socialism, or if it could be proven that the acquirer took the interests of the seller specifically into account.

Section 19 dismissed liability for restitution of movables and chattel acquired through proper business transactions, except artworks and titles with extraordinary artistic value and originally owned by persecuted individuals, or sold at auctions specialising in confiscated property.

Section 10 settled the issue of property without ownership or legal heirs, granting such properties to successor organisations appointed by the military government.

Section 11 determined that all claims were to be submitted before 31 December 1948.

Sections 55–66 settled issues of procedural law.

Section 74 regulated the liabilities of acquirers with regard to immovable properties, business corporations and companies according to which every asset had to be scrutinised by the land, trade and shipping registries to determine whether it fell under a registration liability rule owing to the fact that it was used as coverage in a restitution bond. Section 75 instituted a prison sentence with a maximum length of five years for anyone neglectfully or deliberately omitting their aforementioned liabilities, or when someone knowingly presented false information to restitution authorities.

The guidelines of Control Council Law No. 10 of 20 October 1947 were moderately followed in the British zone of occupation, with the exception of Jewish valuables, in cases of which, as mentioned before, the guidelines conflicted with UK policies regarding Palestine.

Law No. 120 came into effect on 10 November 1947 in the French zone of occupation. It contained a restitution clause benefiting ‘loyal acquirers’, and had no regulations for claims made by external successor organisations for properties without ownership. Such valuables were pooled in a respective fund, used to compensate the victims of National Socialism[7]. In this law, the cut-off date differed, in the sense that all previous owners were liable to prove unlawfulness if the acquirer paid proper remuneration and the transaction was concluded prior to 14 June 1938[8].

Polar opposite ideologies ruled inside the Soviet zone. Nationalisation of private property was irreconcilable with the restitution of factories and emporiums. Seized and confiscated assets were primarily used to cover war reparation expenses. The view that any asset was to be returned to Jewish organisations was disregarded.

Although Law No. 59 clearly stated that ‘restitution through indemnification’ was not limited to assets confiscated within the American zone, several commentators referred to a regulation by the United States War Department, which implied that the area-of-effect of Law No. 59 is limited by zone borders[9].

Law No. 59 went through numerous amendments, then continued its existence in Part 3, Section 2 of the Überleitungsvertrag[10], according to which the Federal Republic of Germany assumed responsibility for the liability outlined in Section 1 of Law No. 59.

Further legislation included the Reparations Agreement of 1952, the Bundesergänzungsgesetz (BergG) of 1953 and the Bundesentschädigungsgesetz (BEG)[11] of 1956. However, this legislation gave a rather restrictive interpretation of the private aspects of who may pursue claims, thus ruling out those with German residency, communists, the Roma, Russian prisoners of war, the forcibly sterilised, those suffering from neurological conditions and homosexuals. The time for submitting claims was short,, with a deadline of 1 October 1957 established.

The contents of the restitution laws of the British and French zones of occupation and Law No. 59 came together on the pages of the Bundesrückerstattungsgesetz[12] (BRüG), setting the final date for claim submission as 31 March 1959, and limiting the scope of the BRüG to valuables found within the territory of the Federal Republic of Germany, thus eliminating all claims on valuables stolen in Western or Eastern Europe and later hauled to the FRG.

The BEG-Schlussgesetz of 1965 was made with the noble intention of elegantly and decisively settling the question of restitution. However, since certain claimant categories were left out yet again, and the final date for submitting claims was set to 31 December 1969, many were disappointed by this measure.

Regarding claim submissions for restitution, the need for retroactively nullifying various laws should have been considered so that people outlawed on discriminatory grounds could have pursued their title claims. This, however, had to wait until 14 February 1968, when the German Federal Constitutional Court abolished the Law of 25 November 1941,[13] thus ratifying the Radbruch-Formula. The following thesis was envisioned by Gustav Radbruch in 1946: when faced with a choice between enforcing positive law, or getting justice, if the enforcement of said positive law feels „unbearably unjust or the person applying said law consciously contradicts the principle of human equality, obtaining justice should gain priority by default.

 

Laws codified according to this guiding principle during the years of national- socialism can be grouped into the following three categories:

• laws enforceable even if unjust (laws that were annulled in 1945, but still considered to have been in force up until that point);
• laws unbearably unjust and need to be abolished retroactively;
• laws not serving justice, thus not even qualifying as legislative rules and should be considered non-existent.

The German Civil Code (BGB) set the absolute desuetude term as thirty years, which temporarily closed the question of restitution. It gained new momentum in the 1990s, when German reunification brought back the issue of restitution of wealth nationalised during communism. One of the last acts of the GDR People’s Chamber on 29 September 1990 was to order the restitution of all valuable properties lost in the post-1945 nationalisation. Due to pressure from Jewish Claims organisations, the term was extended to the period between 1933–1945, and the scope expanded to include wealth confiscated from those racially persecuted.

An exhibit opened on 1 January 1998 in the New York Museum of Modern Art brewed up quite a storm. Two paintings of Egon Schiele[14], borrowed from the Leopold Museum in Vienna, were seized by the heirs of their former owners, bringing forth the unsettled issue of restitution to the attention of both the press and public.

The Washington Conference on Holocaust-Era Assets assembled in December the same year, concluding with the signing of the Washington Declaration of 1998. Among the signers were 12 NGOs, 44 participating countries and the Vatican. They signed an eleven-point programme, wherein they vowed to enforce certain principles, to search for artworks stolen during the national socialist period and their rightful owners or heirs, and to support swift and just restitution procedures.

The Washington Declaration did not give eligibility back to private claim submission rights prescribed in former restitution laws. Countries assumed these liabilities voluntarily and on moral grounds. In reality, these functions were guidelines for institutions on how to manage properties with unclear origins.

Practical steps of restitution

Germany and its allies found themselves in a rather chaotic situation at the end of World War II, as a plethora of artworks (approximately five million pieces) seized from the racially persecuted was dispersed over the country and neighbouring Austria, often ending up as private property in foreign hands, or in museums and warehouses, where they were mixed up with objects legally owned and stashed away by museums merely for protection. The fact that Germany was divided into British, American, French and Soviet zones by the Potsdam Agreement only made matters worse. The occupied territories fell into the jurisdiction of their respective overseers, while lands east of the Oder River effectively became Polish.

2.5 million objects were restituted between 1945–1950 in the American and British zones of occupation, while the Soviets hauled between 1.8 and 2.6[15] million objects into the Soviet Union, of which they later returned 1.5 to 1.6 million pieces to the GDR[16] and other friendly Soviet Bloc countries. France still keeps around two thousand objects as deposits on record, and more than a hundred thousand objects are considered missing (Petropoulos, 2000).

Although numerous artwork trades were conducted during the Cold War era between the East and the West, there still are countless objects on former Soviet soil of undetermined fate; the reason lies partly in the difficulty in identifying their owners and origins, and partly in a lack of commitment to the principle of restitution. This state of affairs is a cause for international conflict to this day.

Germany is now pursuing ownership claims against Russia through the Hague Convention of 1907, which regulates the protection of cultural goods during armed conflicts. Germany and Russia made a decisive cooperation agreement in 1990 (BGBl, 1991, II/702), resulting in important dialogue. Sadly, the initiative soon fell flat when the State Duma ignored Germany’s legal claims and declared all looted artworks property of the Russian state[17], asserting that with very few exceptions[18], all valuables coming from public collections, repositories or libraries and entering the Soviet Union after World War II, are to be considered parts of the ‘reparatory restitution’ paid as compensation for their own losses during the war.

Despite the political stand-off, the cooperation between German and Russian museologists have been smooth. The German–Russian Museums’ Dialogue was founded in 2005, and the Europe Without Borders exhibit was held in Moscow and St. Petersburg in 2007. It showcased copious amounts of exhibits looted and hauled off after WWII with Berlin completing the exhibit by loaning its own pieces.

Artworks that fell victim to Entartete Kunst operations suffered a different fate.

Laws ordering confiscations were passed only on 31 May 1938 (RGBl, 1938, I/612), and expired in 1968, when they were not included in the Bundes Gesetzblatt. Thus, claims for incidental restitution or restoration were not eligible, as the executive powers did not act outside the law when they chose to destroy or alienate artworks in state ownership. Consequently, sales contracts were undisputed by both the seller state and the buyers.

The collections of private persons were an exception, such as the case of renowned art historian Sophie Lissitzky-Küppers. She loaned thirteen paintings to the Museum Hannover, only to have them fall victim to state seizure. The collection of Frieda Döring met a similar fate; they were taken in the confiscation wave hitting the National Museum in Szczecin (then Stettin). The claims of heirs in the 1960s based on US Law No. 59 were futile; the accepted position regarding the return of artworks or payment of indemnification was that the respective individuals were not being persecuted and the seizing of their property without compensation did not have anything to do with their person, therefore the pertinent law was inapplicable in their case.

However, decades of debate resulted in the acceptance of the Radbruch formula and the legal standpoint that it should be used in the aforementioned cases, effectively annulling the Law on Confiscation of Products of Degenerate Art of 1938.

Several spectacular restitutions were carried out in the wake of the Washington Declaration, albeit the undersigned countries adopted the principles with varying enthusiasm. Germany established a central coordination office in Magdeburg, and with it, a freely available online database: the Lost Art Register. The Limbach Commission[19] held its first sitting on 14 July 2003, acting as a sort of elected court with non-binding rulings, but instead providing proposals in contested cases.

The relevance of restitution in Hungary

Hungary also signed the Washington Declaration, since it had its own share of restitution liabilities as a result of its strategic position in WWII.

After 19 March 1944, Hungarian authorities ordered the seizure of Jewish properties . The majority of seized assets were then catalogued in the Museum of Fine Arts. In the winter of 1944, the Szálasi regime had the masterpieces of most public exhibits transported to Germany, regardless of their ownership. The German army also took whatever they looted in Hungary back to the Third Reich. Many titles were returned to Hungary from collection points in Munich during 1946–1947, but the titles that ended up in Eastern Germany disappeared without a trace within the Soviet zone. Conforming to Act 25 of 1946, the Hungarian restitution commission immediately began returning works of art. The commission returned as many artworks as it was capable of by the end 1947, considering that many of the rightful owners had died, fled, disappeared or were simply hard to identify. The communist takeover put an abrupt end to the restitution process. The soviets seized the remaining artworks from museums and hauled them off as compensation for their own war reparation claims.

A push to clarify the ownership status of both artworks in custody or in public collections happened in 1954[20], but serious international committal occurred only in 1978 with the ratification of the UNESCO Convention of 1970[21]. The fall of communism in 1989 brought about a ‘renewed’ genuine acknowledgement of the sanctity of private property under civil law (Constitutional Court Ruling 21 of 1990 [X.4.]), as a result of which restitution laws[22] were adopted. A law settling the matter of illegally confiscated and ownerless properties[23] was codified in 1997. It ordered the return of any such titles to the appropriate Jewish successor organisations. In 1998, Hungary ratified the UNIDROIT Convention of 1995. The Convention wished to universally establish respectful procedure for cultural goods in international legal practice. The National Assembly of the Republic of Hungary also published a statement, which revoked all-time limitations on submitting claims regarding cultural goods, emphasising the country’s moral commitment to seeking justice for those wronged. This commitment reached its zenith with the signing of the Washington Declaration, even though Hungary belongs to the group of nations who have only achieved moderate success in implementing it.

As is the case in Germany, there are still numerous unclosed cases in Hungary. The case of the Herzog Legacy or the claims of the Hungarian State against Russia, faced the same setbacks as Germany’s claims.

Facit

Traditional legal instruments cannot always provide adequate remedies when laws have been broken. In the words of György Boytha: „It is generally understood that compensation can seldom fully substitute for restitution and the relation between these two legal institutions is a delicate issue. In particular so where the question of restitution arises after effected compensation of the original owner of the object or when the principle of restitution prevails against a bona fide purchaser under the condition of compensating him. In such cases moral imperatives may play a decisive role calling for revisitation on the implementation of law in general.” (Boytha, [2003] 2015).

Boytha phrases one of the eternal debates of law along the lines of a factual ownership issue: after so many years have passed, does the question of historical rights still hold true? Towards which owner should the law be lenient? Moral obligations often precipitate the revision of certain legal approaches, which in turn impacts the entirety of legal security.

 

Literature:

Boytha György ([2003] 2015): Hungary and the Issue of Restitution of Cultural Objects. In: Boytha György válogatott írásai. (editor: Csehi Zoltán) Gondolat, Budapest.

Petropoulos, Jonathan: Written Comments for House Banking Committee. Hearing of the 10th February 2000, Washington.

http://archives.financialservices.house.gov/banking/21000pet.shtml

Reinhard von Godin: Rückerstattung feststellbarer Vermögensgegenstände in der amerikanischen Besatzungszone, de Gruyter, 1948.

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