Last Friday, April 08, came inro force the decree that establishes the provisional rate for the payment of royalties to plastic artists whose works are sold by third parties, which is applicable to those resales done in public auction, in commercial establishments or with the intervention of a merchant or commercial agent.

Said decree, issued by the National Copyright Institute (Indautor), was published in the Official Gazette of the Federation (DOF) on April 7, and establishes the payment of royalties ranging from 4% to 1.5% of the price of the artwork, depending on its value. The charge applies to plastic works contemplated in the Federal Copyright Law.

Although granting creators a percentage of the successive sales of their works is not a new topic for the Mexican art market, this agreement is a contribution that will solve a legal vacuum of almost 20 years in regarding the right of participation for the heirs of the artists and it should be noted that it is the result of an initiative by the Mexican Society of Authors of Plastic Arts (Somaap), who requested the starting of the procedure on January 27, 2020.

Thus, some members of the intellectual property guild in Mexico celebrate the aforementioned decree, considering that it is a historical precedent, since it benefits creators, gives them certainty in the remuneration and strengthens copyright. It also stablishes an official royalty rate for galleries and sales agents.

According to the second article of the decree, the rate will be defined as follows: “a) four percent when the sale price of the work fluctuates between one thousand and 50 thousand pesos; b) three percent when the sale price of the work fluctuates between 50,001 and 200,000 pesos; c) two percent when the sale price of the work fluctuates between 200,001 and 500,000 pesos; d) 1.5 percent when the sale price of the work exceeds 500 thousand one pesos. The sales amounts contemplated will be understood without taxes”.

Finally, it is worth mentioning that there are opinions against the decree as some experts question the Indautor’s way of acting and assure that the decree will affect the economy of the galleries and will give rise to art being sold illegally or preferring to be offered in the US.