A week ago, Swiss customs authorities set off alarm bells in the museum world when they sent letters to several Swiss museums advising of tightened and seemingly new regulations governing the obligatory display of works that have been imported into the country free of taxes.

After an outpouring of concern and no shortage of confusion, authorities have now reined in their efforts and advised some of those museums, as well as experts and media, that the changes will not be implemented and museums will still enjoy the same longstanding tax breaks for internationally imported work.

While most institutions are breathing a sigh of relief, other experts and observers are still scratching their heads about the meaning behind the recent chain of events.

On April 8, German-language publication Neue Zürcher Zeitung (NZZ) reported that since the start of the calendar year, various customs offices in German-speaking Switzerland had been sending letters to a number of art museums. The letters reportedly informed museums they would have to permanently exhibit their works of art imported from abroad under tax-exempt status.

According to the report, if the museums did not comply with the specifications, customs threatened to demand additional import duties at the current market value. Notably, it was only museums in the German-speaking part of Switzerland, and not in the French-speaking parts of the country, that received the letter, a fact which several Swiss attorneys we spoke to confirmed.

Not surprisingly the news alarmed museums, many of which already face serious financial challenges and cannot afford additional steep tax bills. As NZZ pointed out: “So if a museum bought a Picasso painting in France in 1960 for 100,000 francs that is worth 10 million francs today, the museum would have to pay 770,000 francs at the current tax rate of 7.7 percent. No Swiss art institution can afford that.”

As Tobia Bezzola, president of the Swiss section of the International Museum Association (ICOM), told NZZ: “Switzerland is a relatively small country. Its art museums have always collected internationally. It stands for the cosmopolitanism of the country.” Bezzola did not immediately respond to request for comment.

“It’s clear there is a U.N. convention of 1950 which was put into force in 1953 in Switzerland,” Peter Mosimann, an attorney and former director of the Kunstmuseum Basel (from 2008 to 2018), told Artnet News in a phone interview.

Mosimann urged friends and associates to take the letter seriously and said the resulting pressure likely helped cause the reversal. Last week, museums made the intervention at the office for the culture federal office, which in turn made an intervention in the finance department, said Mosimann. “It’s completely clear that they have withdrawn it,” he added.

According to an NZZ update that ran in the print edition on April 16, a so-called potential “catastrophe” has been averted.

“The Federal Office of Customs and Border Security has stopped the action, as reported by the Keystone-SDA news agency. Accordingly, the office announced that it was not its intention to demand a permanent exhibition of tax-free imported art objects. The storage of such objects is permitted. The existing practice will not be changed.”

However, others are still rattled by the communication.

“I read in the news yesterday that the customs actually went back to their initial decision not to discontinue the current practice, which is to allow museums to acquire art from abroad free of any import tax,” said attorney Anne Laure Bandle in a phone interview with Artnet News.

However, she noted, “the article doesn’t say whether the customs administration will take back the orders that they sent the different museums. Maybe they’re just in the process of clarifying what exactly is required from the museums. It simply mentions the museums are allowed to store art, so I think there is still the issue as to what exactly that entails.”

None of the museums we reached out to for comment had responded to request for comment by publication time.

NZZ stated prior to news of the withdrawal: “Everyone is mute out of sheer fear: Neither in Basel, nor in Winterthur, Zurich nor other places do the Swiss art museums want to comment on the latest request by Swiss customs, ‘so as not to endanger talks with the customs authorities at this point in time,’ according to a press spokeswoman for the Kunstmuseum Basel. The situation is too delicate for that.”

Meanwhile, Artnet News received a response this morning from Donatella Del Vecchio, a spokesperson for the country’s Federal Department of Finance (Département fédéral des finances, or DFF).

Del Vecchio confirmed that there was not an official press release to update the situation but said that the department had answered several different media requests made last week.

“We can confirm that the Federal Office for Customs and Border Security (FOCBS) did send letters to a certain number of museums and companies such as galleries due to duty-free imported art and exhibition objects. The applicable legal requirement were not clearly explained in the mentioned letters, which unfortunately gave rise to misinterpretations. It wasn’t the intention of FOCBS to demand a permanent display of the art objects. It was rather a regular control of compliance with the conditions related to the duty-free import of art and exhibition objects.”

We asked art law expert Thomas Danziger for his thoughts on the missive and ensuing drawback by authorities.

“The backtracking by the Swiss taxing authorities here isn’t surprising. The Swiss would be more likely to outlaw fondue than to tax their museums into bankruptcy,” said Danziger.

Del Vecchio said the the tax exemption is related to conditions that must be complied with even after the importation has taken place (e.g. no transfer or sale). “The storage of objects imported duty-free by the importer is of course permitted. The existing practice will not be changed. The FOCBS is responsible for monitoring compliance with these conditions. Such controls are also possible in the future.”

In the present case, she wrote, “the action has been stopped because the applicable provisions were not clearly specified in the mentioned letters. The museums and companies concerned have been informed about the further procedure.” She directed us to the works of art page on the department’s website.