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The extension means that ARR will continue to apply in the UK to works by living artists only.

The news will come as a relief to art auctioneers and dealers whose industry representatives had campaigned long and hard against a 2010 deadline, at which point ARR would have been extended to the heirs of artists who have been dead for less than 70 years.

ATG have been part of that campaign, which has been led by British Art Market Federation chairman Anthony Browne.

The Government-commissioned report by the Intellectual Property Office (IPO) largely agreed with the position taken by art industry professionals that there could be a significant risk to business in extending ARR to artists’ heirs by 2010. The extensive consultation process that followed did nothing to change Whitehall’s opinion.

“Ministers decided that the current economic climate could only but affect the art market’s ability to cope with the application of artist’s resale right to the works of deceased artists,” said the IPO.

John Denham, Secretary of State for Innovation, Universities and Skills, has written to the European Commission’s Internal Market Commissioner Charlie McCreevy to notify him of the UK’s decision.

Mr Denham said: “We are committed to supporting businesses, including the UK art trade, through the current downturn. Applying the resale right to deceased artists at this time would place a considerable burden on the art trade.

“If the art traders are seeing a reduction in business they will not only sell fewer works – but will not buy them from artists either. This will have a knock-on effect for artists who will find that there is less of a market for their work.”

Simon Stokes, Head of London Intellectual Property and Technology Practice at law firm Blake Lapthorn, is author of Art & Copyright and Artist’s Resale Right: Law and Practice, and has been advising the art industry on the issue for some time.

He told ATG that, importantly, by putting forward the threat to economic viability as a reason for not extending ARR to heirs until 2012, the Government had followed the terms of the EU Directive on the Artist’s Resale Right.

The European Commission now have three months to give an opinion on the Government’s statement but, even if they then disagree with the British position, there is no obligation on the Government’s part to take heed.

Mr Stokes cautioned that it was “really important” that the British art market continued to make its case, recalling former trade minister Lord Sainsbury’s 2006 commitment to press for a permanent derogation only weeks before reversing that position.

Before and since then the UK has been working closely with the European Union (EU) and other member states to raise the issue of the resale right at an international level and will continue to press for international action.

By Ivan Macquisten