Centuries In Europe, Still Sanctioned as Iranian

By Joel Schectman
WSJ Reporter

Following a New York auction late last year, Christie International PLC’s staff reached out to the U.S. Treasury Department for permission to ship Iranian goods to overseas buyers. Strict U.S. sanctions on Iran, intended to punish the Islamic Republic for its nuclear program, mean tight controls even for sales of Iranian antiquities–in this case, Persian carpets.

The sale of these antiquities was unlikely to benefit Iran’s economy. They may have been out of the country for two centuries, said a compliance counsel at Christie’s. Yet the auction house would still need a license before shipping the carpet to a winning bidder in the United Kingdom or Australia.

Even a thousand years outside Iran would have made little difference. In the eyes of U.S. authorities, Persian provenance puts artifacts into the category of “Iranian origin good” and makes them subject to sanctions, say export control experts. And that means shipping cultural artifacts in or out of the U.S. requires a special license that can sometimes take months to obtain.

“It’s one of the glaring holes in the legislation,” said Thomas Danziger, an art attorney at Danziger, Danziger & Muro, LLP. “It doesn’t matter when it was exported from Iran, it could have been sitting in a Swiss chalet for a hundred years – it’s still from Iran.”

Experts say U.S. sanctions weight heavily on the sale and exhibition of both ancient Persian works and current Iranian art. A Wall Street Journal review of government licensing records from the first three months of 2014, found that institutions such as Smithsonian’s Freer and Sackler Galleries and the Metropolitan Museum of Art, as well as auction houses like Christie’s were compelled to apply for licenses to deal in Persian art, even when the artifacts had resided outside of Iran for generations.

The U.S. has for years maintained strict economic sanctions against Iran, in an effort to push Tehran to scale back its nuclear capabilities. Even the most tenuous connections to Iran can cause long delays to transactions, as companies apply for license exemptions from the U.S. Treasury Department’s Office of Foreign Asset Control .

Authorities granted permission to applicants in the art-related cases reviewed by the Wall Street Journal, sometimes in less than a month. Christie’s says the process has become a straightforward business routine and the auction house continues brisk trade in Persian textiles. A U.S. Treasury Department spokeswoman said OFAC processes licenses needed for transport of antiquities “with speed so as to diminish any adverse impact.”

But the prospect of filing a request with OFAC — America’s sanctions watchdog — has had a chilling effect on many smaller players in Persian antiquities, experts in art law say.

For example, William Pearlstein a specialist on art law at Pearlstein & McCullough LLP, says last year he advised a U.S. client against bidding on a Persian textile collection in Germany, valued at $60,000 to $100,000, despite clear documentation a family had owned the item in Europe for generations.

To ship the rug back into the U.S., the client would need to have first acquired a sanctions license. But if U.S. authorities chose to deny the license, “he’d be stuck with it in Germany,” Mr. Pearlstein said. “There is just too much uncertainty and we couldn’t guarantee him he’d get the license.”

Mr. Pearlstein says this uncertainty, combined with the wait times and legal costs of applying to OFAC, turn away many potential buyers of Persian works. “Some of these artifacts are in circulation have been for centuries, but you have the free cultural exchange inhibited by political considerations.”

Sam Bardaouil a freelance curator who has organized exhibitions of Persian art in the U.S. and Europe, says the sanctions licensing requirements has limited his ability to attract the interest of top museums and foundations. “Institutions just don’t want their name on it,” Mr. Beaoduil said.