Out-Law / Your Daily Need-To-Know

The French Court has struck a blow against the internet as a truly global market place. French buyers have been stopped from taking part in the on-line auctions of their choice. Instead they must use commissaires priseurs (State approved auctioneers). They must also pay French VAT upon purchases made on-line.

Nart, which auctions works of art, argued that its sales to French customers were made outside of France. The basis for this argument was that the company making the sales (a Nart subsidiary) was based in New York, the computers handling the bids were based in America and payment was made in dollars to a US bank account.

The French Court disagreed. It focussed upon Nart’s French offices, that the site had been advertised in France, that the art was accessible in France and that French residents were able to make purchases. On 3rd May 2000 it ruled that the State controlled monopoly of auctions should, indeed, apply to the site – and that the sales comprised an “auction in France” held in a “vast, infinitely expandable saleroom”. Both of the Nart companies incurred a nominal fine.

The decision means that future sales must be through commissaires priseurs and French VAT is payable on all purchases. The State monopoly will probably be scrapped in the Autumn when a European Directive is incorporated into French law. In the meantime, Nart has barred French residents from taking part in the auctions and is considering an appeal.

The Nart website can be visited at www.nart.com.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.