Committee Reports > List of Committees > Joint > 1978 > Committee on the Secondary Legislation of the European Communities > Report No. 21 - Community Action in the Cultural Sector

REPORT

A. INTRODUCTION

Document Examined

1. The Joint Committee has examined a Communication [R/2982/77 (AG 67)] sent by the Commission to the Council in November, 1977 concerning Community action in the cultural sector. The Commission has asked the Council to adopt a Resolution approving the implementation of Community action in this sector on the basis of the guidelines laid down in the Communication.

Background

2. The Commission’s Communication may be seen as a response to a Resolution passed unanimously by the European Parliament on 13 May, 1974 calling on the Commission to put forward proposals for action in the cultural sector. On 8 March, 1976 the Parliament unanimously approved of a preliminary working paper prepared by the Commission on the subject. In addressing its Communication to the Council the Commission also professes to be encouraged by various statements made at the Summit meetings of 1969, 1972 and 1973 as well as by the stress laid in the Tindemans report on culture as a means of arousing a greater feeling of belonging and solidarity among Europeans.

Cultural Sector

3. The Commission defines the cultural sector as “the socio-economic whole formed by persons and undertakings dedicated to the production and distribution of cultural goods and services”. The sector covers not only cultural activities such as drama and painting and cultural products like books and sculpture, but also persons engaged in cultural activities, such as dancers and musicians.

Treaty Provisions

4. Apart from Article 36 which, in derogation from the general provisions relating to the free movement of goods, allows Member States to impose prohibitions or restrictions on imports, exports or goods in transit for the protection of national treasures possessing artistic, historic or archaeological value, the EEC Treaty contains no specific provisions relating to the cultural sector. However, the general provisions of the Treaty relating to freedom of trade, freedom of movement and establishment and harmonisation of taxation apply in the cultural as well as in other sectors. The Commission, therefore, stresses that most Community action in the cultural sector is merely the application of the Treaty provisions.

Acknowledgement

5. In considering the Commission’s Communication the Joint Committee received considerable assistance from the Arts Council for which it wishes to express its sincere thanks. In its contact with the Council the Committee was very pleased to learn that the Council will publish before the end of the year the results of a survey on “Living and Working Conditions of Artists in Ireland” and a report on “The Arts in Irish Education”.

B. AREAS COVERED BY GUIDELINES

Commission’s Communication

6. So far the Commission has restricted itself in the cultural field to formulating ideas and undertaking experiments, which it considered essential before going further. In its Communication to the Council the Commission describes the present state of progress of Community action and indicates further developments which it considers desirable. If the guidelines which it proposes are approved by the Council the various Community instruments envisaged in the Communication will be submitted to the Council as formal proposals. The Joint Committee hopes to be able to report to the Houses on at least the more significant of these.

7. In Part I of its Communication the Commission deals with the application of the provisions of the EEC Treaty to the cultural sector under the following headings:

(a) Freedom of trade in cultural goods,

(b) Combating thefts of cultural goods,

(c) Freedom of movement and establishment for cultural workers,

(d) Training periods for young cultural workers,

(e) Harmonisation of taxation in the cultural sector by

(i) the removal of tax barriers to the development of cultural foundations and patronage,

(ii) the setting up of uniform VAT rates for cultural goods throughout the EEC which should be kept to reasonable limits, and

(iii) the removal of discrimination in the taxation of cultural workers,

(f) Harmonisation of laws on copyright and related rights by

(i) the harmonisation of wide areas of copyright to ensure that cultural workers would have the most favourable treatment to be found under the existing laws of any Member State,

(ii) Community-wide operation of a public lending rights scheme,

(iii) measures to improve the remuneration of authors, performers, play-wrights, composers, literary translators, sculptors and painters as well as to encourage the work of craftsmen,

(g) Social Aspects

The adaptation of social security systems in the Community to the special problems of employed and self-employed cultural workers.

8. In Part II of the Communication other possibilities of co-operation among Member States are suggested. These are

(a) the preservation of the architectural heritage by the promotion of

(i) specialist training for restorers and

(ii) nuclear conservation techniques,

(b) contributing to the development of cultural exchanges involving

(i) the evaluation of cultural events, and

(ii) the organisation of “European Rooms” in museums and exchanges between museums,

(c) co-operation between the cultural institutes of Member States,

(d) the promotion of socio-cultural activities at European level.

C. FREEDOM OF TRADE

Movement of Goods

9. Cultural goods are classed by the Commission amongst the type of goods for which administrative formalities involved in movement across internal Community frontiers must be simplified and ways of achieving this are being examined by the Customs Legislation Committee. The ultimate objective of the Commission is to simplify administrative formalities so that those concerned can carry out customs operations themselves without being forced to resort to clearing agents.

10. The Commission also wishes to see the practice of exempting creative artists in the plastic arts from formalities when transporting their own works generally applied and legalised. It also proposes that the system of sureties applied in respect of sales of cultural goods should be improved so that the financial burden is as small as possible.

Views of the Joint Committee

11. The reduction of administrative formalities in intra-Community trade to a minimum is an essential process in the development of the Common Market. The Joint Committee is advised that the simplification of procedures connected with the movement of cultural goods across internal frontiers has a particular relevance for Irish artists and dealers because an increasing amount of cultural activity here is organised on a thirty-two county basis. In particular it has been represented to the Committee that there is an urgent need for the simplification of procedures for the temporary import and export of cultural goods between the State and Northern Ireland. The Committee, therefore, believes that Commission initiatives in this area are to be welcomed.

D. COMBATING THEFT AND FRAUD

Commission’s Proposals

12. The Commission is suggesting a number of possible measures aimed at combating theft of cultural goods and preventing the fabrication and distribution of fakes. These are—

(i) Harmonisation of national laws relating to the disposal of stolen cultural goods;

(ii) Introduction of a voluntary record card system which would enable an owner in the event of theft to make the card available to the police and customs authorities;

(iii) Ratification of the Council of Europe Convention on the protection of the archaeological heritage and the UNESCO Convention on the means of prohibiting illicit import, export and transfer of ownership of cultural property;

(iv) Harmonisation of legislation on the prevention of the fabrication and distribution of fakes, and

(v) Harmonisation of the legislation governing the recognition of experts’ qualifications for the authentication of works of art.

Views of the Joint Committee

13. Insofar as the harmonisation of laws on the disposal of stolen goods is concerned the Joint Committee finds it difficult to conceive what useful harmonisation the Community can undertake in this area. Quite apart from the considerable differences that exist between the laws of Member States the question raises issues touching on title to movable property and general principles of criminal law, neither of which comes within the scope of the Treaty of Rome. At first glance it seems difficult to justify having rules for cultural goods in those areas which differ from those applicable generally. In any event the Joint Committee believes that as far as Ireland is concerned the matter is one solely for the Oireachtas.

14. The Joint Committee believes that the proposed record card system could be useful in preventing fakes and assisting in tracing stolen works of art. It is informed that neither the record card system nor the establishment of a national service as envisaged by the UNESCO Convention would present problems in Ireland from a police point of view.

E. FREEDOM OF MOVEMENT AND ESTABLISHMENT

Extension of SEDOC

15. It is now well established that, for nationals of Member States, the possession of the nationality of the host country cannot be made a condition in the employment of workers or in allowing self-employed persons to pursue their activities. The Commission argues that for freedom of movement to become a reality it is necessary that workers be informed of employment opportunities, an area in which it believes cultural workers to be particularly ill-served. It is the intention to operate a European system for the international clearing of vacancies and applications for employment (SEDOC) covering such sectors as manufacturing, agriculture, construction, catering, transport, communications, banking, public administration etc. The Commission suggests that this system could also be used in the cultural sector. It recognises, however, that this may present difficulties where personal rather than technical qualifications are involved but it is examining the position to see if these difficulties can be overcome.

Training for Young Cultural Workers

16. The Commission envisages that young cultural workers will be given an opportunity of undergoing training in Community countries other than their own under the second programme to promote exchange of young workers which it is preparing. The proposed programme is at present being tested by a number of pilot schemes and will be submitted to the Council when the results are available.

Views of the Joint Committee

17. The Joint Committee has no objection in principle to the extension of the SEDOC system to the cultural sector but believes that the timing of the extension may be important. At present the SEDOC system is not operational and the inclusion of an additional sector, with inherent difficulties, might be more easily made when there has been some experience in operating the system with its present categories. The Committee assumes that the Member States will be consulted on this point.

18. The Joint Committee welcomes the proposal to give young cultural workers the opportunity of undergoing training in other Member States. The Committee is advised that Ireland is very badly served in respect of specialised training and education in particular areas of the arts. Dancing, choreography, acting, theatre-directing and film-making have been mentioned to the Committee as examples of areas where no or very few opportunities exist for training or education in Ireland. It also seems desirable to the Committee that young workers be given the opportunity of serving apprenticeships with artists in other Member States working in the plastic arts.

19. One of the pilot schemes which the Commission will be undertaking in connection with the proposed second programme will be in the cultural sector. The Joint Committee trusts that Irish workers will be given an opportunity of participating in this scheme.

F. HARMONISATION OF TAXATION

Cultural Foundations and Patronage

20. The Commission argues that, since Government and local authority subsidies are necessarily limited, the future of culture depends substantially on foundations and patronage and consequently on the taxation system applicable to such. It has sent a memorandum to the Standing Committee of the Heads of National Revenue Departments on the elimination of tax barriers to the development of cultural foundations and patronage. The memorandum raises the issue of the disparities in the national taxation systems applicable to foundations and patronage, the discrepancies in the tax concessions granted to them in the various countries and the possibility of the nine fiscal territories forming a single fiscal territory within which such tax concessions would be calculated without regard to the country of origin of the income or the country of destination of the expenditure.

Uniform VAT Charges

21. In the matter of VAT the stated object of the Commission is to keep the effect of VAT on cultural goods within reasonable limits. It suggests that this could be done by making the dealer’s profit margin rather than the selling price the basis of assessment. In its Communication to the Council of 29 November, 1977 the Commission indicated its intention to submit a draft Directive providing that the dealer could opt for his real profit margin or a fixed margin of 30% of the selling price. On 12 January, 1978 the Commission sent to the Council a proposal for a Seventh Council Directive on harmonisation of laws relating to turnover taxes which provides that the taxable amount shall be 30% of the dealer’s selling price irrespective of the actual margin and for the exemption from VAT of supplies and importations of works of art effected by the artist himself.

Taxation of Cultural Workers

22. The Commission suggests that in the taxation of cultural workers account should be taken of the irregularity of earnings. It considers that the system in force in certain countries of the Community, whereby cultural workers are allowed to spread taxable earnings, arising in one exceptional year, over several years, should be applied generally.

Position in Ireland

23. The Irish income tax law provides for exemption from income tax in the case of certain bodies which could be described as promoting cultural activities. Exemption is given in respect of the profits of a trade carried on by any charity if the profits are applied solely to the purposes of the charity and either—

(i) the trade is exercised in the course of the actual carrying out of a primary purpose of the charity, or

(ii) the work in connection with the trade is mainly carried on by beneficiaries of the charity.

24. Exemption is given in respect of any profits or gains arising to an agricultural society from an exhibition or show held for the purposes of the society if they are applied solely to the purposes of the society. An “agricultural society” is defined as meaning “any society or institution established for the purpose of promoting the interests of agriculture, horticulture, livestock breeding or forestry”.

25. Exemption is also given to bodies established for the promotion of athletic or amateur games or sports in respect of income which has been or will be applied for that purpose.

26. There is provision in Section 2 of the Finance Act, 1969 for relief from income tax in respect of certain earnings from original and creative works of writers, composers, painters and sculptors. In order to qualify for relief the individual concerned must be resident in the State, for income tax purposes, and not resident elsewhere.

27. The scheme of the relief is that an individual may seek a determination by the Revenue Commissioners that he has produced a work or works generally recognised as having cultural or artistic merit. Alternatively the individual seeking the relief may submit for the consideration of the Revenue Commissioners a particular work of his which has been published, produced or sold and request a determination that such work has cultural or artistic merit. A “work” means an original and creative work in any of the following categories:

(a) a book or other writing,

(b) a play,

(c) a musical composition,

(d) a painting or other like picture,

(e) a sculpture,

and it may have been written, composed or executed either solely by the person seeking the determination or jointly with another individual.

Views of the Joint Committee

28. The Joint Committee is advised that in Ireland aid for activity in the arts is funded almost exclusively by the State. Foundations of the kind referred to by the Commission are almost non-existent and business sponsorship of the arts is negligible. The Joint Committee believes that the extent to which the taxation system inhibits sponsorship of the arts merits serious consideration. The Committee welcomes particularly the suggestion that for the purpose of tax concessions the whole Community be treated as a single fiscal area.

29. The Joint Committee proposes to submit a separate report on the proposed seventh Directive already referred to. Two points not covered by that proposal have been brought to its notice by the Arts Council. The Council believes that VAT should not be charged on individual sales of original works of art by artists or their agents. Instead it considers that the basis of assessment should be the agents’ total profits and that the artist himself should be exempt. The Council also suggests that the casting of sculpture should be exempt from VAT. The Joint Committee recommends that these suggestions be sympathetically considered.

30. As far as taxation of workers is concerned creative artists working in Ireland already enjoy concessions in advance of what is available in many other countries. Interpretive artists do not enjoy those concessions and the Joint Committee would support the proposal that they should be allowed to spread over a number of years any exceptional taxable earnings arising in any one year.

G. COPYRIGHT AND RELATED RIGHTS

Harmonisation of Laws

31. The Commission is aiming at a harmonisation of the laws of the Member States which relate to copyright and other related rights. Already it is conducting consultations with interested parties with a view to determining the guidelines to be followed in dealing with

(i) Problems common to copyright and other related rights comprising the removal of discrimination on grounds of nationality, the distribution of royalties and the consequences of technical progress which has resulted in a boom in audio and visual reproduction

(ii) Problems of copyright including the duration of copyright, extension to all Member States of the public lending right system, calculation of royalties on subsidised performances and remuneration of literary translators

(iii) Resale rights of creative artists in the plastic arts on which the Commission believes that a Directive under Article 100 of the EEC Treaty should be adopted

(iv) Protection of the property of creative craftsmen which the Commission believes should be the subject of a Council Regulation.

Irish Law

32. The Irish laws concerned with copyright and related rights are the Copyright Act, 1963 and the Performers Protection Act, 1968. In general, however, and in contrast to the patents and trade marks codes, the protection provided by the existing laws is general in character and the implementation of these two statutes does not require regulatory action by the Patents Office, except in very limited circumstances which seldom arise. Broadly, the two statutes merely set out the law, and the questions of disputes and interpretation are for the courts. In particular, the laws in question do not cover the manner in which copyright or related fees are to be collected and distributed.

33. In regard to non-discrimination on the grounds of nationality, it should be noted that the laws in question are drafted so as to follow the principles of the Berne Convention for the Protection of Literary and Artistic works, the Universal Copyright Convention and the Rome Convention for the Protection of Performers, Producers of Phonogramms and Broadcasting Organisations. Ireland has ratified the first two of these Conventions, and has signed, but not yet ratified the third. The granting of “national” treatment to nationals of other contracting States is a feature of these Treaties, and accordingly, in principle cultural workers from Community countries working in Ireland are not subject to any discrimination as regards their rights on the basis of nationality. The public lending rights system is not applied in Ireland.

34. It can be said that if Community legislation following the guidelines set out in the Commission’s Communication emerges a major overhaul of Irish laws in this area will be required. The Joint Committee understands that the question of bringing Irish copyright law more into line with European norms is already under consideration. It is informed, also, that the Arts Council is preparing proposals for legislation for the introduction into Ireland of the system of resale rights in the visual arts which is already in operation in several other Community countries.

Views of the Joint Committee

35. The Joint Committee is in favour, in principle, of measures to ensure that creative artists and craftsmen receive adequate remuneration for their work. Insofar as the harmonisation of the laws concerning copyright and other rights may be expected to contribute to that end the Committee believes that the Commission should be encouraged to proceed with the work of harmonisation, formidable though the task may prove to be. The Committee would wish, however, to defer its comments on the various ideas adumbrated by the Commission until it has had the opportunity of examining all the implications of whatever definitive proposals for Community legislation eventually emerge. In the meantime it urges that the proposals under consideration for amending Irish legislation should be processed with all possible speed.

H. SOCIAL ASPECTS

Social Security

36. Notwithstanding the material success of some individuals, the highest proportion of underprivileged, according to the Commission, is to be found in the category of workers constituted by cultural workers. While the measures proposed which are envisaged as part of the application of the Treaty are designed to improve their situation the Commission recognises that it will be a long time before these can be adopted. It suggests, however, that something immediate could be done in the matter of social security, an area in which it believes cultural workers are still often badly protected.

37. The Commission’s Communication advocates the adoption of measures to increase the cover available to cultural workers against social risks in the form of sickness, invalidity and old age insurance and family allowances. It sees the first problem as the need to adapt existing social security systems to the particular situation of cultural workers in paid employment. The need to do so arises, it is claimed, because many cultural workers are employed by more than one employer, giving rise to difficulty in collecting employers contributions, or work only intermittently thus having a very high unemployment rate. Cover against unemployment is seen as needing urgent improvement. Self-employed cultural workers are also mentioned but the Communication is not specific merely indicating that changes should be based on new solutions which have already been introduced or are being prepared in several countries of the Community.

Position in Ireland

38. Cultural workers who are engaged in paid employment in Ireland are, in common with other employed persons, compulsorily insurable under the Social Welfare Acts and are thereby covered for the wide range of benefits provided under the national social insurance system. Unlike some Member States where special systems operate for various categories of workers, there is a single system in operation in Ireland. The benefits provided under the Irish social insurance system are as follows: unemployment benefit, disability (or sickness) cash benefit, maternity benefit, pay-related benefit, invalidity pension, widows’ and orphans’ pension, deserted wife’s benefit, retirement and old age pension, death grant, occupational injuries benefits and treatment (mainly dental and optical) benefit. In addition to these benefits, cultural workers are also eligible for children’s allowances (known as family allowances in other Member States) under the universal scheme administered by the Department of Social Welfare. Since there is a single social security system in Ireland, the fact that persons work for more than one employer causes no special problems in the collection of contributions or the payment of benefits. Indeed, the pooling of risks which is achieved under this system ensures that bad risks, which could include cultural workers, enjoy the same protection as persons who are good risks. In the case of unemployment, the Irish system provides for payment of unemployment benefit for a continuous period of up to 65 weeks and if payment for this period is exhausted the acquisition of a further 13 contributions in respect of insurable employment is sufficient to requalify the person concerned for receipt of benefit for a further 55 weeks. It is also relevant to mention that while a person is receiving unemployment benefit, his title to other social security benefits is preserved through the award of credited employment contributions which preserve the continuity of his insurance.

39. Self-employed cultural workers are eligible for children’s allowances. They are not, however, covered by sickness, invalidity and old age insurance unless they were previously so covered as employees for at least 3 years in which case they have the option of continuing their insurance on a voluntary basis for widows’, retirement and old age pensions (but not sickness benefits and invalidity pension). The State system of social assistance, however, provides protection for those not covered or inadequately covered by social insurance. Some of the benefits available under this system are unemployment assistance, widows’ and orphans’ pensions and old age pensions which are administered by the Department of Social Welfare and supplementary welfare allowances and disabled person’s maintenance allowances administered by the health boards on behalf of the Departments of Social Welfare and Health, respectively.

40. Self-employed workers are not as yet covered by the social insurance system but the question of providing social insurance cover for them is at present under consideration and a discussion paper on the matter was recently published. In the meantime self-employed cultural workers may qualify under the social assistance system in the same way as other categories of self-employed. Moreover the Joint Committee understands that the Arts Council is at present considering proposals relating to a pensions scheme for artists.

Views of the Joint Committee

41. It is not clear to the Joint Committee what precisely the Commission has in mind nor what impact the measures it envisages would have on a unified system of social security such as applied in Ireland. It proposes therefore to reserve comment until precise proposals for Community legislation emerge.

42. In its seventeenth report (Prl. 7276) of 28 June, 1978 the Joint Committee has already indicated its views on the proposed Council Regulations relating to the application of social insurance schemes to self-employed persons moving within the Community.

I. OTHER ACTION

Preservation of Architectural Heritage

43. The Commission refers to the contribution made by the Community to the preservation of architectural heritage by promoting training for restorers and aiding the development of new conservation and restoration techniques. For restorers Community scholarships are available for specialist courses in Bruges, Rome and Venice. Community aid has also been made available for the work of and disseminating information about the Nuclear Research Centre in Grenoble where a nuclear conservation technique has been perfected. This technique may involve simply the irradiation of stone, marble or old wood or, in certain cases needing more refined methods, irradiation preceded by impregnation by a substance which hardens under treatment by gamma rays.

Cultural Exchanges

44. While the Commission acknowledges the importance of cultural exchanges it concludes that the Community can contribute to their development only indirectly. Community patronage has been provided for a Community Youth Orchestra which is to perform in all the nine capital cities. The Commission also believes that the Community could assist in the evaluation of more noteworthy cultural events. It suggests, moreover, that the Community might encourage the establishment of “European rooms” in museums as well as exchanges between museums and the improvement of accessability to their major works.

Co-operation between Cultural Institutes

45. The Commission calls for co operation between cultural institutes both inside and outside the Community as regards timetables, activities and programmes. Joint projects would not only reduce costs but have a broader impact particularly in the case of non-member countries a long way from the Community. Member States not culturally represented in another could stimulate co-operation, perhaps, by asking an institute in another country to be responsible for their cultural representation in that State.

Promotion of Socio-Cultural Activities

46. The Commission urges the promotion of socio-cultural activities at European level based essentially on cultural exchanges and embracing not merely the aesthetic but a physical and social side as well. Use should be made of the assistance which the mass media and, in particular, radio and television can give or, with Community assistance, could give. Sports, because they have become a spectacle with a huge audience, should be used as a channel for promoting socio-cultural activities but the Community should commit itself to combating sporting jingoism.

Views of the Joint Committee

47. While accepting that many of the suggestions made by the Commission are to be commended the Joint Committee shares with the Arts Council its disappointment that the Commission does not see the Community adopting and promoting a precise programme of cultural exchanges. In the Committee’s view harmonisation of law in the cultural sector would be facilitated and made more acceptable if associated with such a programme designed to disseminate among people a knowledge and appreciation of the various cultures within the Community.

48. Community patronage has already been provided for a Community Youth Orchestra. In the Joint Committee’s view this patronage should be extended to the theatre and the visual arts. The Joint Committee welcomes the suggestion that the National Museums of the Member States should establish “Euaropean Rooms”. In this context, the Joint Committee suggests that Member States should facilitate each other in the return or exchange of historical objects that are central to their cultural and artistic history.

49. There are a few specific initiatives in the field of cultural exchange which in the Committee’s view merit Community support. The National Theatres of Member States could engage in an apprenticeship/exchange scheme for young members of the Theatre companies, in areas like acting, directing and stage work. This would yield a lasting benefit in terms of increased cultural understanding. Consideration could also be given to the establishment of a European theatre festival held in different venues every couple of years. The Committee makes these suggestions because Ireland has the longest established National Theatre of the EEC, and this is one area which it sees as providing an opportunity of cultural exchange in which we could fully participate.

50. The Joint Committee feels that measures should be introduced, with Community assistance, to ensure that new buildings, normally used by the public make provision for the public display of works of art, such as sculpture, paintings, murals. A percentage of the construction cost, ranging from 1 to 3%, should be provided for this measure and the cost should be tax deductible.

51. The Joint Committee was surprised to learn from the Arts Council that it was not aware of the scholarships open to architects, engineers, town planners and craftsmen to which the Commission refers. It trusts that the Government Department concerned will look into the matter to ensure that information about these scholarships is made available to all those concerned.

Debates in the Houses

52. In view of the importance of Community Action in the Cultural Sector the Joint Committee requests that a debate take place on this report in each House. In this connection the Joint Committee refers to the Orders of Seanad Éireann and Dáil Éireann of 3 May, 1978 and 11 October, 1978 respectively.

(Signed) MARK CLINTON

Chairman of the Joint Committee

8th November, 1978.