LAWS designed to prevent art galleries from displaying looted cultural artefacts are unworkable following a Federal Magistrates Court judgment, legal experts say.
The federal government is now considering changing the legislation.
The Arts Minister, Simon Crean, said there had been 19 seizures of cultural assets over the past 12 years that had not been challenged in the courts.
''It's important to point out that, in this case, of the 43 pieces that were seized, 34 were successfully returned to their country of origin,'' Mr Crean said.
Federal officers raided Melbourne's BC Galleries three times this year at the request of the Chinese and Phillipine governments, seizing 43 items believed to be of dubious providence.
They included ceramic and bronze sculptures from the Han, Qi and Tang dynasties and a human skull, pictured, that was mounted as a trophy by Filipino head hunters.
The Protection of Movable Cultural Heritage Act includes a provision for inspectors to seize artefacts that their countries of origin have deemed to be culturally significant and prohibited from export.
But BC Galleries took action against the federal government in relation to nine of the confiscated items, claiming they had been legally imported from Hong Kong, and that it was impossible to prove they had originated within current Chinese borders.
The federal magistrate Grant Riethmuller found the federal government was unable to establish on the balance of probabilities that the objects were liable to be forfeited, and they were returned to the gallery in August.
The Chinese government has expressed its ''disappointment'' in the decision.
An attache to the Chinese embassy in Canberra, Yao Chen, said the Australian government had indicated it would take action to tighten laws to ensure it did not happen again.
''It seems that we both are disappointed in the outcome,'' Ms Chen said on Wednesday.
A criminologist who specialised in the trade of antiquities, Duncan Chappell, said the judgment meant it would now be difficult for federal officers to carry out such actions.
The ruling placed the onus of proof on the federal government to show the items were illegally exported and not on the person from whom the items were seized, he said.
''It means that the act as it stands is almost unworkable,'' said Professor Chappell, who gave evidence for the government.
The Department of Regional Australia, Local Government, Arts and Sport said it was the first time that the section of the act had been tested in court, and it was considering making changes to the legislation.
The prospect that the laws might be impotent came as some of Australia's top galleries faced a credibility crisis.
The National Gallery of Australia and the Art Gallery of NSW each had items in their collections that were sourced from a dealer who had been arrested for dealing in stolen antiquities.
BC Galleries dealer, Francesco Botterio, declined to comment.