American coin collectors and art dealers say a rule under consideration at the State Department could dramatically decrease the importation of goods from China, crippling a booming antiquities market in the United States.

The State Department has not yet imposed any restrictions, but officials are considering requiring shippers to provide documentation of ownership when moving goods from China to the United States. Chinese officials, who asked the State Department for the change in 2004, argue the rule is a way to protect China’s cultural heritage and prevent the trafficking of stolen goods.

That could dramatically scale back what is a growing, multimillion-dollar antiquities trade with Asia and foist an unmanageable amount of paperwork on small-business coin collectors, critics claim.

Without the necessary paperwork, customs inspectors could seize the artifacts.

With this summer’s Beijing Olympics drawing new attention to the relationship between the United States and China, opponents of the proposed rule worry State Department officials might grant the request as a diplomatic gift.

“China is making a big deal about the Olympics, and this would be a nice crumb to throw them,” said Peter Tompa, of counsel to Bailey & Ehrenberg , who represents several coin collector organizations in Washington.

But archaeologists and historians have joined Chinese officials in pushing for the new restrictions. Looting of artifacts has become rampant in Asia, creating a booming black market for the goods.

“First of all, it would reduce the financial incentives to loot an archaeological site,” said Patty Gerstenblith, president of the Lawyers Committee for Cultural Heritage Preservation . “Secondly, the point of the restrictions would encourage more transparency of the trade by calling for more documentation.”

But coin collectors and art dealers say the new restrictions would not curb the sale of stolen goods. The market for Chinese antiquities is much larger in that country than in the United States, so tamping down on shipments here would do little to stop looting, they believe.

Both sides, though, share a frustration with the State Department, which has yet to take an official position even though China first made the request in 2004. A State Department official said the request was still under review.

 Congress is keeping an eye on the administration as well. Sens. Kit Bond (R-Mo.) and Charles Schumer (D-N.Y.), whose constituents include art dealers and museums, wrote to the State Department expressing their concerns about the requested limits.  

“This restriction could put a huge dent in the U.S. market for Chinese antiquities,” said James Fitzpatrick, senior partner at Arnold & Porter .

Fitzpatrick represents J.J. Lally & Co. Oriental Art, which is based in New York City and is one of the major private dealers in Chinese antiquities.

Lally and major auction houses like Christie’s and Sotheby’s have taken issue with the pending restrictions, according to Schumer’s correspondence with the State Department. And for good reason: The art market in China has taken off this century.

For example, Sotheby’s reported its Asian art sales had risen almost $438 million from 2001 to 2007 — resulting in an annual growth rate of 29 percent — according to its 2007 report with the Securities and Exchange Commission. Much of that can be credited to art from China.

Coins are a million-dollar business as well. On VCoins.com , a popular sales website for hobbyists, there are more than 72,000 ancient coins listed, worth more than $15 million.
American coin collectors believe the State Department has already leveraged their interests in the name of international diplomacy. Many point to a State Department announcement in 2007 placing restrictions on the importation of ancient Cypriot coins into the United States.

In the announcement, State Department officials thanked Cyprus profusely for its help with Americans fleeing Lebanon a year earlier.

“It’s not tit for tat. They can’t trade off the interests of American people to earn favors overseas,” said Wayne Sayles, executive director of the Ancient Coin Collector’s Guild .

Sayles, Tompa and others have fought to get more information on what they contend is a secretive process on imposing the import restrictions.

The Cultural Property Advisory Committee (CPAC) makes final recommendations to the State Department on the restrictions asked for by foreign governments, but many have had difficulty in obtaining documents from the panel.

Coin collectors sued the State Department after their Freedom of Information Act requests were denied. Just last week, the coin collectors’ groups began to receive heavily redacted documents on the Cypriot request, but nothing on the Chinese one. They plan to contest that move by State, too.

Bond, for one, hopes the matter will be resolved soon.

“I have longstanding concerns over the lack of transparency and openness in the State Department’s cultural property decision-making process and the operations of [CPAC],” Bond said in a statement from his office.

“Federal agencies and advisory committees need to follow federal sunshine laws, and it would be disappointing if a lawsuit is required to make them do so,” Bond said.

Gerstenblith agreed that the State Department should release all the information it is required to. But she acknowledged that diplomacy can come into play in these decisions.

“I don’t think there is anything wrong in viewing a broader cultural diplomacy context for the U.S,” said Gerstenblith. “The question is whether the preservation of our cultural heritage is worth it. I think it is.”

Restrictions on artifacts in similar agreements between the United States and other countries have strengthened ties, according to Cindy Ho, president of Saving Antiquities For Everyone , a nonprofit group that advocates for the preservation of cultural heritage.

For example, an agreement with the United States required El Salvador to rebuild its art museum. In addition, Italy extended its loan period of artifacts to American museums from six months to four years after an agreement reached with the United States.

If China’s request were granted, Ho believes there would be similar benefits.

“Every day that goes by without an [agreement] is another day we are not doing everything we can to stop the plunder of China’s cultural heritage, everyone’s cultural heritage,” said Ho.