In our earlier discussion on the Artist’s Resale Right (ARR), we explored its objectives and international adoption. Yet behind these well-intentioned objectives lies a framework that is far from straightforward, with multiple issues and challenges in implementation.
Issues and Challenges
Royalty
One of the most pressing questions in relation to ARR, is “Who pays royalty?”. Determining the whether the seller, buyer, art market professional, or a combination of these parties should bear responsibility for paying the royalty is the key. In the United Kingdom, for example, a system of joint and several liability applies, placing responsibility on sellers, agents, or buyers. This ensures collecting societies have viable avenues to recover royalties.
Nevertheless, this approach is not universally accepted.
Transparency and Access to Information
Effective enforcement of the ARR depends heavily on access to accurate and timely information about art sales. Without transparency in the secondary art market, resale royalties risk becoming theoretical rather than enforceable.
- The EU model limits artists’ rights to request sale information to a three-year window, which may allow reluctant dealers to evade payment.
- The German model, by contrast, vests enforcement powers exclusively in collecting societies with no strict time limit, improving transparency but raising concerns about balancing commercial confidentiality with artists’ rights.
WIPO highlights that accurate sales data and honest reporting are essential for effective ARR enforcement, and that lack of reliable sale information complicates efforts to track royalties and monitor resale markets. This underscores why transparency is key to ARR functioning as intended.
Tracking Resales
Tracking resale transactions remains a major challenge, particularly for private or informal sales. Only auction house transactions are relatively easy to monitor, whereas private gallery sales or online transfers are often unreported.
Balancing commercial interests
Some jurisdictions exempt certain transactions to maintain a balance between market growth and artists’ rights. For example, in EU countries, if an artwork is acquired directly from the artist by a gallery, the ARR does not apply for a three-year period or below a certain price threshold. This mechanism encourages galleries to invest in promoting new artists while ensuring that ARR applies once the work gains market value.
Lack of Awareness Among Artists
Many visual artists, especially emerging or self-represented creators, may undervalue and/or lack knowledge about copyright law, contractual rights, and the potential benefits of resale royalties. As a result, their works fail to register, or they remain unaware of any royalties that might be due under a future ARR scheme.
This lack of awareness can undermine the very objective of ARR, which is to ensure that artists share in the financial success of their works, because without adequate knowledge or institutional support, artists may be unable to monitor resales, enforce rights, or engage effectively with collecting societies.
ARR in Malaysia v ARR across the globe
A total of 106 countries passed legislation providing ARR in their respective legislative frameworks. Despite this widespread global momentum, Southeast Asia remains far behind where no Southeast Asian country, including Malaysia, has adopted a formal ARR framework.
The Malaysian Position
At present, Malaysia does not have a specific legal framework providing for the Artist’s Resale Right (ARR). The rights of artists in Malaysia are mainly protected under the Copyright Act 1987, which grants economic rights (such as reproduction and communication to the public) and moral rights (such as the right of attribution and integrity).
However, there is no provision entitling artists to royalties from subsequent resales of their artworks once they have been sold for the first time.
This means that once an artist sells their work, often at an early stage of their career, they do not benefit financially from any increase in the artwork’s value over time. The resale profits accrue entirely to the collectors or galleries involved in the secondary market.
To date, no Malaysian case law has recognised or recommended ARR. However, there are emerging policy signals. On 3 December 2024, the Deputy Minister of Tourism, Arts and Culture announced that the National Visual Arts Development Board, in collaboration with Universiti Teknologi Mara (UiTM), is studying the development of a Resale Royalty Right Model for visual artists. This may be the first step toward reform, but legislation has yet to follow.
The Structural Imbalance in Malaysian Law
Without ARR, Malaysian artists are structurally excluded from long-term market appreciation. The current legal framework reinforces economic disparities between creators and powerful intermediaries, undermining the sustainability of the creative ecosystem.
Recommendations for Malaysia
There is a rising need for ARR to be introduced in Malaysia. Here are several recommendations for an effective introduction of ARR in Malaysia.
Raise Awareness
Nationwide education campaigns targeting artists, collectors, galleries, and dealers are essential to ensure understanding of ARR and intellectual property rights.
Build a Resale Tracking System
A centralised registry for artworks and resale data would improve transparency and facilitate royalty calculation.
Collaborate with Market Players
Auction houses and galleries should be legally required to report eligible resales and channel royalties through authorised mechanisms.
Establish an Independent Collecting Society
A dedicated body, modelled on the UK’s Design and Artists Copyright Society (DACS), should be empowered to collect, enforce, and distribute resale royalties.
Amend the Copyright Act 1987
ARR can be integrated directly into the existing copyright framework, leveraging established enforcement structures.
Conclusion
As the global art market continues to grow, Malaysia must decide whether its legal system will protect not only art as an asset, but artists as creators. ARR offers a path toward fairness, sustainability, and recognition.
For further information, please contact:
Chiou Zhi Qi, Richard Wee Chambers
zhi.qi@richardweechambers.com
