REGULATION AND MANAGEMENT OF CULTURAL PROPERTY IN CANADA

Date: 2009-08-31 15:15

Letter to the Government of Canada

From: Tamoikins Museum                                                                                                               

To: Government of Canada

 

Regulation and management of cultural property in Canada

 

Cultural property, more known as art, antiquity and collectibles, is an inseparable part of every nation. Virtually every government, business or individual has contact with objects of culture and heritage. Publicly owned cultural property located on city streets, in museums, and government institutions is the key source of revenue for every municipality nationwide. For the past decade the international market of art, antiquity and collectibles has quietly grown into an economical giant. It has become a multibillion dollar sector, far exceeding gold and diamond markets. That said, it remains one of the least regulated and the last unregulated markets in North America. 

Officially, the global market of cultural property is estimated at 30 to 50 billion US dollars (yearly circulation). Because most of the transactions are conducted under the shadow of privacy, no one truly knows the actual value of this economic sector. Most recent estimates place it roughly at 200 billion dollars per year. Absence of necessary laws and regulatory systems provide perfect conditions for wide range of criminal activities on all levels. Unfortunately, Canada is no exception.

As a nation of immigrants, and one of few developed countries in the world that actively promotes immigration, Canada has to deal with many issues involving cultural property from all over the world. Without proper regulations in Canada, not only does this large sector remain untapped, it essentially undermines the country’s development causing financial and cultural degradation.  On the other hand, with proper laws and regulation this massive influx of art, antiquity and collectibles can become one of the most profitable sectors of economy. In addition to imported and exported goods, Canada already has a very large amount of cultural items within its borders. This property requires just as much government oversight as any other valuable commodity. Due to the complete absence of necessary regulatory laws, as it stands, our government cannot tap into this very large source of revenue. On top of that, until this situation changes our nation will, unknowingly, continue to sponsor various criminal activities ranging from tax evasion and fraud to monopoly and even terrorism.     

 

To be more direct let’s outline the problems. At present time our government:

·         Has no uniform standard of appraisal of cultural property and thus cannot effectively evaluate objects of art, antiquity and collectibles.

·         Has no uniform standard of registering cultural property and thus cannot effectively document most valuable information and preserve our history. 

·         Has no uniform standard to manage identity of cultural property and thus cannot effectively authenticate, track and book-keep national heritage. 

·         Has no system to manage and regulate import / export of cultural property

·         Has no way of effectively regulating (taxing, auditing and governing) the market of cultural property. 

·         Does not know the value of cultural property in public possession (museum, galleries, libraries, government buildings…).

·         Does not know the value of cultural property in private possession.

 

Resulting in:

·         Millions of dollars of unpaid taxes (intentionally and unintentionally)

·         Incorrect balance books of every city and town in North America

·         Undervaluation of Canada’s wealth locked in tangible assets (private and public)

·         Tax evasion through use of cultural property

·         Uncontrolled import/export of priceless cultural artefacts  

·         Uncontrolled money flow by terrorists and criminals through undisclosed sales of cultural property

·         Inadequate and unenforceable cultural property laws 

·         Degradation of national heritage and loss of valuable national rarities

 

Effected sectors and organizations:

·         Revenue agencies

·         Border service agencies 

·         Policing and law enforcement organizations (Interpol, RCMP…)

·         Law institutions

·         Museums and galleries (public and private)

·         Insurance companies

·         Banking and money lending institutions

·         All owners of cultural property

o         Individual owners (posses largest portion of cultural property within a nation)

o         Small and large businesses

·         Auctioneers

·         Antiques and collectibles businesses

·         Dealers of art, antiquity and collectibles

·         Appraisal institutions

·         Culture and heritage organizations 

·         Educational institutions

Solution:

The answer is four well-implemented systems that act as a regulatory basis on top of which a reliable structure can be developed. The 4 systems are:

1. Universal Appraisal System (UAS) © - could be defined as the world’s first logical evaluation method that is fully auditable, transparent, and can be used by anyone to appraise ANY cultural property; it provides the true fair market value and level of liquidity to date. Must be accepted as government standard.

2. Complete Item Information Document (CIID) © – can be defined exactly as it is named, a document where all the information that is known about the item is registered to the last detail in written, photographical, and digital form. This document is also the first of its kind so it can only be related to a certificate or a passport but is so much more. Must be accepted as government standard.   

3. Secure Item Identification System (SIIS) © – can be defined as a way to give the item its unique identity that cannot be duplicated. Parallels can be drawn between the VIN (Vehicle Identification Number), your personal Social Security Number or currency counterfeit protection system hidden within each dollar, euro or any other currency that identifies it as a single unique entity. Must be accepted as government standard.

4. Unified National Database (UND) © – can be defined as an electronic database where all of the above information, such as appraisal data, item information data, ID data and all additional information that may be necessary is securely stored and managed by private and/or government sector. More simply, the national database is a place where all of the country’s cultural property is registered. Must be government regulated.

                                                                                                               

Outcomes:

Universal Appraisal System (UAS) is the single most effective tool for regulating the cultural property sector. Once implemented at the level of government all financial troubles, criminal activities and inconsistencies will be under control, revenue and economical growth will increase significantly in every city, and finally a great level of security will be provided to all cultural property within a region. That is made possible because UAS is the world’s first to use a logical, fully transparent, completely auditable method to evaluate any type of cultural property, providing the user with a single clear number (appraised value) that can be explained to the last dime.  More benefits to the system is that it can be used by virtually anyone with a high school education, it is bias free, and almost entirely error proof.  From a business perspective, UAS will be highly demanded by all owners of cultural property opening a significant revenue source for local municipalities.

Complete Item Information Document (CIID), once accepted as government standard, will become a passport for each cultural item within our nation and beyond. Essentially, CIID will become a standardized form for every organization that interacts with cultural property. This document will hold all known information about an item in a consistent format clearly and thoroughly representing the item to authorities or any other interested party. A rarity with proper CIID will be instantly recognized in every agency and organization, allowing easy management of art, antiquity and collectibles within the country. Additionally, CIID will add anther level of security to the item and the owner by preserving valuable historic information in the best manner possible and will be the only appropriate document to represent the item in case of theft or loss to authorities, insurance companies or other involved institutions. CIID will be highly demanded by all owners of cultural property opening a significant revenue source for local municipalities.

Secure Item Identification System (SIIS) is perhaps the single most important system that locks and guards the identity of an item. Consisting of Visual and Hidden Identification Markers, it allows authorities to 100% identify a marked rarity no matter where it is or who owns it (just like a VIN on a car). Once implemented on government level, all cultural property within Canada will be much more secure. Border Service Agency will be able to mark, track and identify every rarity entering or leaving the country. Local police and RCMP will acquire a powerful tool that combats theft and forgery, significantly assisting recovery of stolen objects. Financially this system has proven to be very popular with art owners bringing in high revenue to its operator.

Unified National Database will store, backup and manage all input from the three other systems becoming a very powerful logistical tool in government hands. With the help of UND, authorities will be able to track, administrate, update, communicate, gather statistical data, research, post alerts, and govern the largest potion of cultural popery within their region (city, province or country). UND is a great source for revenue with endless possibilities. 

 

To place all 4 systems into perspective here is how they would work together: First, the identity of a cultural item is secured with SIIS; now the item cannot be counterfeited, switched or mistaken for something else. Second, a CIID is created; thorough research and authentication is done to identify the item and all information obtained is systematically registered into a CIID. This stage uncovers (forever preserving) valuable historic information. Third, knowing everything about the item to date, the UAS is applied providing a transparent calculation with totally explainable and undisputable true market value (appraisal) of the serviced item. Finally all of this information is registered into an electronic database that stores, backs-up, and manages this cultural item.          

                            

Effects:

For the first time each town, municipality, province and Canada as a country will be able to see, account and determine the exact value of cultural property within its borders. For the first time Canada Revenue Agency (CRA) will be able to accurately determine and register art, antiquity and collectibles as tangible assets. CRA will be able to accurately determine tax income made from cultural property. Border Service Agency, for the first time will be able to accurately register, track and determine the value of cultural property entering and leaving the country, applying appropriate taxes or conditions if necessary. For the first time regional governments will be able to know the true value of publicly owned cultural property on their balance books. Museums and all other institutions that own cultural property will not only receive the best protection available but in addition will cut their insurance costs by half. Government and private insurance companies will become totally independent from current biased methods when apprising national rarities. For the first time government will be able to effectively regulate and audit all financial aspects of the art, antiquity and collectibles market. Fraud, forgery and theft will be lowered to a minimum. Contraband trade of endangered cultural artefacts and shadow (under the table) dealings will become extremely difficult. Appraisal shopping will be entirely eliminated. Banks and money lending institutions will be able to provide credit to average citizens using their rarities as collateral, something that is available only to very wealthy individuals at the moment. Average citizens, the largest of owners of cultural property, will be protected from appraisal fraud, forgery, theft, and many other problems, thus becoming more culturally and financially engaged. Price manipulation, one of the most common fraudulent activities in the art market will become nearly impossible. Over all, the entire sector of cultural property will not only be stabilized and properly regulated, it will change into one of the most transparent and safest sectors in Canada.    

 

From the author:

For the past decade our museum and scientific department has been researching and developing solutions to various problems that involve cultural property resulting in the creation of very innovative regulatory system for the entire market of cultural property.

I would like to state with all responsibility that a group of scientists, myself included, developed and tested everything that is necessary to solve all of the above stated problems. We have every necessary tool, system and product shown above to effectively regulate this entire sector. Most importantly we wish to donate all our innovations (the 4 regulatory systems) to the Government of Canada free of charge for nonprofits use. In return, all that we are asking is for the government to acknowledge this very significant problem and begin taking necessary actions to recover from it.

 

For more detailed information outlined in this letter please refer to our latest book “Solving the Last Unregulated Market of Art, Antiquity and Collectibles” PDF version, available free of charge on our website www.tamoikinsmuseum.com or on www.Knol.Google.com – search – Tamoikins Museum.

 

 

Dmitry Tamoikin

Owner of Tamoikins Museum

President of Tamoikin Inc. (Canada)

www.tamoikinsmuseum.com

office@tamoikinsmuseum.com

 

 

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