New Zealand moves one step closer to a Resale Royalty Right for Visual Artists

We have previously reported on the announcement of a new resale royalty scheme for artists following the conclusion of the Free Trade Agreement between New Zealand and the United Kingdom of Great Britain and Northern Ireland (the NZ–UK FTA).  An equivalent commitment is included in the Free Trade Agreement between the European Union and New Zealand (the NZ–EU FTA).

The government has now released the Resale Right for Visual Artists Bill to implement this scheme.  The proposed legislation provides a right for eligible artists and successive right holders to receive a royalty on qualifying resales of original visual artworks - the Artists Resale Royalty (ARR) right.

To qualify for the payment of the resale royalty, the following four conditions must be met:

  • the artwork must be an original visual artwork;

  • the resale must be a qualifying resale;

  • the qualifying resale must occur during the resale right period; and

  • at the time of the qualifying resale, the artist must be eligible.

The term visual artwork excludes the following types of works - a building, a literary work, dramatic work, or musical work.

To be a qualifying resale, the resale value must meet or exceed a threshold which is expected to be within the range of $500 to $5,000.  The transaction must also be a professional resale or a voluntary qualifying resale.

A resale is a professional resale if at least 1 party to the resale is a New Zealand-based art market professional, publicly funded art gallery, or publicly funded museum that collects and displays artworks.  A resale is a voluntary qualifying resale if the parties to the private resale agree in writing that the resale is a qualifying resale.

The resale right period matches the copyright period attaching to the visual artwork.  That period currently starts with the creation of the work and expires at the end of the calendar year 50 years after the artist’s death.  In the event the duration of the copyright period is extended (as required under both the NZ-UK FTA and the NZ-EU FTA) the resale period will be likewise extended. 

The ARR right is independent of copyright ownership and is inalienable.  It cannot be waived, assigned, or charged.  The payment of the royalty is compulsory, but a right holder can decline to receive the royalty payment.

An artist is eligible for the royalty if at the time of the resale they are a New Zealand citizen or resident; or a citizen, subject, or resident of a specified reciprocating country.

For a professional resale, the royalty rate will be a fixed 5% of the resale value, no matter the resale value.  For a voluntary qualifying resale, the royalty will be the percentage of the resale value to which the parties have agreed.

The Minister for Arts, Culture and Heritage will appoint a Collection Agency.  The Collection Agency will be a single non-governmental agency that will manage the resale right including the collection and distribution of resale royalties on behalf of artists.

Both parties to the transaction, or their agent/s, are jointly and severally liable to pay a resale royalty to the Collection Agency:

The Collection Agency is liable to pay, to the right holder, each resale royalty it receives, less a fixed percentage of resale royalties retained as an administrative fee. 

In the event a right holder declines to receive the resale royalty payment, that royalty payment is to go into a cultural fund for the purposes of supporting visual artists’ career sustainability. In that way, the cultural fund seeks to provide a mechanism to ensure that declined royalty payments are still redistributed to benefit the artistic community.

The Bill is currently open to public submission and it expected to be in force by 1 December 2024 at the latest.

Elena Szentiványi - April 2023

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