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Provenance, authenticity and due diligence before you buy blue-chip art

What should you check before buying a blue-chip artwork? Four things. Who owned the work and when (provenance), whether the recognised authority on the artist accepts it (catalogue raisonné, foundation or archive), whether it is registered as stolen or disputed (Art Loss Register, Interpol), and what physical state it is in (condition report). Since January 2020 dealers and auction houses in the EU and the UK must also check who you are and where your money comes from on sales of 10,000 euros or more.

Key takeaways

The Knoedler lesson

In November 2011 Knoedler, one of the oldest galleries in New York, shut its doors. For years it had sold paintings attributed to Rothko, Pollock and Motherwell that came from a Long Island dealer, Glafira Rosales, who said they belonged to an anonymous collector. They had been painted in Queens. A federal judge later ordered Rosales to pay 81 million dollars in restitution to the victims (Artforum).

The buyers were not naive. Some were experienced collectors. What failed was the paperwork: a provenance made of one anonymous owner and a few plausible anecdotes, accepted because the paintings looked right and the gallery had a famous name.

Provenance: the ownership history, on paper

Provenance is the list of everyone who owned the work, from the artist's studio to today, with dates. Ideally each step has a document behind it. Sale invoices, gallery stock numbers, exhibition catalogues, auction catalogues, photographs of the work in a collector's home, labels and stamps on the back of the canvas.

Gaps are normal. Long gaps without explanation are not. For works that were in Europe between 1933 and 1945 any missing link deserves a specific question, because claims for art looted under the Nazi regime still surface at auction decades later. Ask the seller for the file, not a summary of it. If the answer is that the previous owner wants to stay anonymous, you need another way to confirm that the owner existed and held the work.

Authenticity: catalogue raisonné, foundation, archive

A catalogue raisonné is the scholarly list of an artist's known works, with dimensions, dates, provenance, exhibitions and literature for each. For a Picasso, a Fontana or a Morandi, inclusion in the reference catalogue is what the major auction houses look for first. A work outside it can still be genuine. It will sell for much less, or not at all.

Many artists have a foundation or archive that issues opinions or registers works for future volumes. The Fondazione Lucio Fontana in Milan, for example, has published catalogues raisonnés of the paintings and sculptures and of the works on paper, the latter covering more than 5,500 works made between 1928 and 1968 (Fondazione Lucio Fontana). Getting a work archived can take months and the foundation may decline.

Some authorities have stepped back. The Andy Warhol Foundation announced in October 2011 that it would dissolve its authentication board in early 2012, after years of costly lawsuits from owners whose works had been rejected (Artforum). For Warhol the market now leans on the catalogue raisonné, the provenance and technical analysis. Pigment tests, canvas and stretcher dating and infrared imaging do not replace scholarship, but they can rule a work out quickly.

Stolen, looted or disputed: the database checks

The Art Loss Register, founded in London in 1990, lists more than 700,000 lost, stolen or disputed items and is used by auction houses, art fairs, dealers, insurers and police (Art Loss Register). Interpol's Stolen Works of Art database holds almost 57,000 objects and can be searched by anyone through the ID-Art app (Interpol).

Run both searches before you commit money, and keep the results with the date. Be clear about what they mean. A database only knows what has been reported to it: a work stolen from a family that never filed a claim will come back clean. In the US a thief cannot pass good title even to a buyer in good faith, while some civil law countries protect the good faith buyer after a period, so the country where you buy matters too.

The condition report

Two Abstrakte Bilder by the same artist, same year, same size, can be worth very different amounts if one has been relined, retouched or cleaned too hard. A condition report describes the support, the paint layer, past restorations and any damage, usually with photographs under normal and ultraviolet light.

Auction houses provide one on request. It is written by the seller's side. For a seven figure purchase, pay an independent conservator to look at the work in person before the sale. And check the frame and the back as well: labels, stamps and inscriptions are part of the provenance file.

Anti-money laundering checks: what to expect as a buyer

Since 10 January 2020 the UK's money laundering regulations cover art market participants, meaning dealers, auction houses, intermediaries and some art storage operators, on transactions of 10,000 euros or more, in line with the EU's Fifth Anti-Money Laundering Directive (Withers; Mishcon de Reya). They must identify the buyer and the seller, find the ultimate beneficial owner behind any company or trust, and ask where the funds come from.

In the US the Anti-Money Laundering Act of 2020 brought dealers in antiquities under the Bank Secrecy Act and asked the Treasury for a study on the wider art market; the study, published in February 2022, did not recommend immediate new rules for art dealers (Herrick; Withers). Major American auction houses run their own know your customer checks anyway.

So if a seller does not ask who you are, or is happy to be paid by an unrelated third party, treat that as a warning about the seller, not as a convenience.

How Unicorn Art Club handles it

In Unicorn Art Club the checks are done before purchase by Unicorn Private's experts: provenance verified, a condition report and an appraisal for every work bought by an artist's vehicle (SPV). If no suitable work by the artist is found within the 12 month selection window, the experts pick a work by an artist of comparable standing, with the same checks. To follow auction results for the artists in the club, Unicorn Art Watch publishes prices and news for each of them, for example Warhol at https://artwatch.unicorn-club.com/artists/andy-warhol.

Frequently asked questions

Is an auction house's catalogue entry a guarantee of authenticity?

It is an opinion backed by the house's terms of sale. Most major houses offer a limited authenticity warranty for a set number of years after the sale, with conditions. Read the terms in the catalogue before bidding.

Can a foundation refuse to authenticate a work?

Yes, and it usually does not have to explain why. Some foundations do not issue opinions at all and only register works for the catalogue raisonné. A refusal makes the work very hard to sell through major auction houses.

Do I need an Art Loss Register search for a private sale?

Nothing obliges a private buyer to run one, but it costs little compared with the price of a blue-chip work and it is the first thing a future buyer or auction house will do.

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Sources

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