Introduction

When a painting or sculpture is resold for a profit, the law in Cyprus (as well as some other countries) gives the original artist a continuing right to a portion of that resale price. This right is known as the “droit de suite” or “resale right”. It is designed to ensure that visual artists benefit from the increasing market value of their original work.[1]

What is the resale right and why does it exist?

The resale right allows the creator of an original work of art (for example, a painter or sculptor) to receive a royalty payment when that work is resold through certain commercial channels, such as art galleries, auction houses and other professional dealers. The idea is straightforward: an artist who once sold a work cheaply may later see that same work fetch a high price at auction or in the secondary market. The resale right helps the artist share in the economic success.

EU Member States agreed to harmonise this right by adopting Directive 2001/84/EC, and Cyprus implemented the principle into domestic law in 2006 by amending the Copyright and Related Rights Law of 1976 (L. 59/1976).[2] The system aims to balance the legitimate interests of artists with the practicalities of the art market.

Which works and which artists are covered?

The resale right applies to original works of graphic or plastic art and copies of such works made in limited editions by the artist himself or under the artist’s authority.[3] That typically includes:[4]

  • Paintings and drawings
  • Sculptures
  • Prints and engravings
  • Photographs (if they qualify as original works)
  • Tapestries and similar works

The right is generally granted to the author, i.e. the individual who created the work (the artist). It can also apply to certain heirs or beneficiaries after the artist’s death. Not every kind of “art” qualifies; the law focuses on traditional works of graphic and plastic creation rather than industrial products or mass-produced items.

The right is inalienable;[5] that is, it cannot be transferred.

When does the resale right apply?

The resale right typically comes into play when a work is resold through the art market,[6] such as:

  • Sales at public auctions
  • Sales by art galleries or dealers acting on a professional basis

Private sales between individuals may fall outside the scheme unless those sales pass through a professional intermediary. The right does not apply merely because a work changes hands privately without involvement from the market channels described in the law. The law[7] lays down the circumstances that trigger the obligation to pay the royalty.

How much must be paid? The sliding scale and its limits

The resale right is calculated on a sliding scale based on the resale price. The Cypriot rules[8] follow the scale set out in the Directive and commonly used across the EU:

  • 4% on the portion of the resale price up to €50,000
  • 3% on the portion from €50,000.01 to €200,000
  • 1% on the portion from €200,000.01to €350,000
  • 5% on the portion from €350,000.01 to €500,000
  • 25% on the portion above €500,000

These amounts do not include Value Added Tax (VAT).[9]

Following an amendment in 2020,[10] there is no longer a minimum threshold for triggering the resale right.

However, there is a maximum royalty: the total royalty payable on any single sale is capped at €12.500.[11]

How long does the right last?

The resale right survives the artist’s death.[12] Under the applicable rules, the right is normally exercised during the artist’s lifetime and for 70 years after the artist’s death, during which heirs or rights-holders may continue to claim the royalty. This mirrors the length of protection used for many other categories of copyright and related rights.

Who pays and who collects?

In practice, the seller (or the vendor’s intermediary such as an auction house or gallery) is responsible for paying the royalty. Many professional intermediaries factor the resale right into their sale procedures: they calculate the royalty, deduct it from the sale proceeds, and pass it on to the artist or the designated collecting body.

Because the administrative burden of tracing entitled artists and handling many small payments can be significant, many countries allow collective management organisations (CMO) or dedicated agencies to gather and distribute resale royalties on artists’ behalf. Artists who expect to benefit can register with such organisations so that royalties can be properly routed. The operation of collective management organisations is governed by separate legislation.[13] You can read more about them in our blog post here.

Practical issues for artists

If you are an artist, here are practical steps to consider:

  1. Register your works with a CMO where possible. Registration makes it easier for intermediaries to find you when a resale occurs. As of the date of this blog post, there is no CMO for the administration of the resale right in Cyprus.
  2. Keep records of sales, invoices, photographs and any documentation that proves authorship and provenance. These will support claims if resale royalties are owed.
  3. Understand your contracts. If you have sold works under contracts that transfer broad rights or ownership, check whether you retained or waived any resale rights. Written agreements matter.

Practical issues for buyers, sellers and dealers

If you buy or sell art, or operate an auction house or gallery, you may want to keep the following in mind:

  1. Budget for resale rights. Sellers and intermediaries should calculate any payable resale rights in advance and ensure sale proceeds and invoices reflect that deduction.
  2. Check caps. The maximum royalty cap will limit the amount due in very high-value sales.
  3. Document provenance and chain of title. Clear documentation minimizes disputes about whether the droit de suite applies.
  4. Work with CMOs. Where possible, using collective management organisations simplifies compliance and helps ensure artists receive what they are due.

What happens if the royalty is not paid?

Failure to comply with resale-right obligations can give rise to legal claims. Consequences can include:

  • Claims for unpaid royalties by the artist or their collecting society
  • Reputational risk for intermediaries who fail to meet their legal obligations

Because the resale right is integrated into the wider framework of artists’ moral and economic rights, disputes over unpaid royalties can become complex. It is therefore a good idea for market participants to adopt clear procedures and seek legal advice when in doubt.

A balanced right: for artists and the market

The resale right represents a policy choice: to give artists a continuing stake in the future financial value of their originals while imposing a modest administrative duty on the trade that handles resales. The sliding scale, the minimum threshold, and the maximum cap are all examples of how lawmakers have tried to strike a balance between meaningful support for creators and practicable rules for the art market.

 

* The content of this blog post is intended for general informational purposes only and does not constitute legal advice. Reading this blog does not create a lawyer-client relationship.

[1] Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of art, recital 3

[2] sections 11A-11G of the Copyright and Related Rights Law of 1976 (L. 59/1976) (as amended)

[3] Section 3(5) of the Copyright and Related Rights Law of 1976 (L. 59/1976) (as amended)

[4] Section 11A of the Copyright and Related Rights Law of 1976 (L. 59/1976) (as amended)

[5] section 11A of the Copyright and Related Rights Law of 1976 (L. 59/1976) (as amended)

[6] Section 11B(1) of the Copyright and Related Rights Law of 1976 (L. 59/1976) (as amended)

[7] section 11B of the Copyright and Related Rights Law of 1976 (L. 59/1976) (as amended)

[8] section 11C of the Copyright and Related Rights Law of 1976 (L. 59/1976) (as amended)

[9] section 11D of the Copyright and Related Rights Law of 1976 (L. 59/1976) (as amended)

[10] Law 56(I)/2020, amending the Copyright and Related Rights Law of 1976 (L. 59/1976)

[11] section 11C(3) of the Copyright and Related Rights Law of 1976 (L. 59/1976) (as amended)

[12] section 11F of the Copyright and Related Rights Law of 1976 (L. 59/1976) (as amended)

[13] The Collective Management of Copyright and Related Rights and Multi-territorial Licensing of Rights in Musical works for online use Law of 2017 (L. 65(I)/2017)