Hong Kong expert questions security in the China art market

As we reported ten days ago, a heart-stopping presentation during Asian Art in London, sponsored by Edinburgh-based auctioneers Lyon & Turnbull, was made by a Senior Inspector in the Hong Kong Police, also a private art security consultant, Toby J A Bull. In our view, it was probably the most significant talk in a long series of events.

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Toby J A Bull of Trackart Art Risk Consultancy, Hong Kong  Photo Paul Harris

The talk, entitled A Quest for Authenticity in the Chinese Art Market, dealt with a range of areas of concern for dealers and collectors ranging from the nebulous role of Hong Kong in the international trade to tomb robbing, fakes and forgeries, money laundering and theft. He started his presentation with a dramatic quotation from the novel The Gilded Seal by James Twining: ‘Forgery is the paedophilia of the art world. Once the suspicion is raised, you are presumed guilty, even when proven innocent. It’s a shadow that never leaves, poisoning everything you touch. So you need to be either very brave, or very sure that you’re right, before you try forgery in this city . . .’. As a result, the Hong Kong art business is a tightly held industry difficult to penetrate and opaque in the extreme.

Bull emphasised initially that he was not talking on behalf of the Hong Kong Police, although he is a Senior Inspector there. There is no art crime squad within the Hong Kong Police. As he spun his tale, however, it became quite clear why he was not talking on behalf of the Police: the Police Authority simply has no role in preventing illegal activities related to the art world.

The 1997 agreement between China and the UK specifically provided for strict Chinese laws on the protection of cultural relics NOT to apply to Hong Kong: one country, two systems. There are separate Export Laws and in terms of Hong Kong’s Import and Export Ordinance (Part IV), there is provision for a Freeport handling ‘Unmanifested Cargo’ which simply facilitates smuggling. Once goods have passed through the Freeport of Hong Kong they are effectively legitimised with all the necessary export-import paperwork. This is particularly relevant in relation to the import of antiquities to mainland China where an import duty of around 35% is imposed.

The vast volume of goods in containers means that a statistically minute proportion is ever examined. Between 1992 and 1996 (under the UK) HK$ 15 million of Chinese antiquities were seized in HK; the figure went down dramatically between 1997 and 2006 totalling HK$2.3m.; between 2007 and 2012 no Chinese antiquities at all were seized ! Many of these containers carry thousands of copies of antiquities: forgeries. Not only is porcelain copied on an industrial scale within mainland China, but, even, Kuomintang stickers to accompany items said to originate from the haul of evacuated antiquities during the dying days of the civil war 1948-49. The quality of fakes is now extremely high.

There is no unit in the Hong Kong police these days engaged in investigating illegal activities in the local art world despite the fact that large quantities of stolen and forged artefacts pass through the Freeport every week. These include the products of tomb robbing in China. Such looting “requires an elaborate, multi-layered network of grave robbers, middlemen and art dealers.” Such networks flourish in China.

Hong Kong very often benefits. In 2002, antiquities looted from eight outer temples of The Forbidden City were included in a Christie’s Hong Kong auction catalogue and were ultimately withdrawn from sale. Christie’s deemed it an isolated case’ and averred that it ‘devoted considerable resources to investigating the provenance of all objects offered for sale’.

“The majority of art is stolen for money laundering purposes and art sales are often components of the laundering process,” Bull said. The media usually reports in terms of dramatic value the stealing of works of art. This helps the criminals who will fund their ongoing activities at around 3-10% of such publicised value. Effectively, stolen art is used as a financial underpinning to the China-Hong Kong underworld.

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One of Toby Bull’s slides from his presentation    Photo Paul Harris

In Hong Kong, anti-money laundering regulatory action is based within the Anti-Money Laundering task Force (AMLTF) of which China and Hong Kong are both members. It investigates both financial institutions and Designated Non-Financial Businesses and Profession (DNBFs). Incredibly, the art market is not classified amongst the DNBF’s!

On occasion, thefts are particularly brazen. In April 2014, the Chinese mainland auctioneer Poly International held an auction in the Hong Kong Grand Hyatt Hotel where the hammer went down for the equivalent of US$3.7m. on a painting by the popular Chinese artist Cui Ruzhuo (see below). It was packed up for delivery to the buyer and stacked for collection whereupon it disappeared and has never been seen since. The Hong Kong Police were involved but were obliged to back off after Poly roundly declared it was simply ‘lost property’. Many in the Police Authority believe it was simply stolen and that Poly were keen to have the whole unedifying matter dropped . . .

 

Selected highlights of Asian Art in London demonstrate broad scope of event

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Salisbury auctioneers Woolley & Wallis have a 2-day Asian sale next week, which will include the Helen Espir Collection of decorated porcelain. Highlights of the sale were shown in Duke Street earlier this week.    Photo Paul Harris

We visited some 30 or 40 exhibitions and events associated with this year’s Asian Art in London. In coming days we shall be posting news and features related to the event so do keep watching out – we have already today posted a feature on the artist Daniel Kelly whose work we particularly admire and who is showing at Hanga Ten Gallery in Maddox Street.

1 Laurence Paul Fleur de Lys

On display at Fleur de Lys in Kensington Church Street is this fascinating 19th century painting. Although actually a Japanese painting it is, unusually, of the important Chinese figure, Zhuge Liang who was Chancellor of State for Shu Han during The Three Kingdoms period. He was a trusted confidante and a great and accomplished strategist.

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Toby Bull at the Lyon & Turnbull event at Hakkesan Restaurant     Photo by Paul Harris

Edinburgh-based auctioneers Lyon & Turnbull showed off the highlights of their Asian Sale to take place at the beginning of December – in St. Neots Cambridgeshire(Crosshall Manor). They also staged last Monday evening a fascinating talk by Toby Bull (above), a consultant on fakes and forgery and inter alia a member of the Hong Kong Police Force. We shall report his talk in full on a unique posting next week.

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Freya Yuan of Woolley & Wallis gingerly handles the star item of next week’s sale, the Imperial seal of Empress Xiaoyiren (estimated at £200,000-300,000). Photo Paul Harris

Please look out for forthcoming stories on Chinese export ware, Chinese turquoise porcelain, blanc de chine, fakes and forgeries, what to look out for in Chinese contemporary art, Vietnamese contemporary art and Olympia Art & Antiques Fair Asia exhibitors!