In preparation for hosting fanart on the AO3 (that is, you will soon be able to upload art directly to our servers and not just link it from elsewhere), we are revising the official Terms of Service and our FAQ!
As always, we actively seek and very much appreciate feedback on all archive policies. The coding for fanart is still underway, and there is time to make changes, so if there's anything in this draft that concerns you, please let us know.
Just my initial thoughts--we are tracking questions and comments and will discuss them. As per the ToS, users should not upload complete works by someone else without transformation or permission. Right now it’s only possible to set an entire work’s visibility, so in the circumstance you describe, the artist would probably have to make a separate post, which could be linked to the fiction as a related work. (Special note: for exchanges run on the Archive, it is possible for the moderators to make a rule that contributors can’t unilaterally withdraw their contributions, so a participant in an exchange run on the Archive might not be able to remove her or his contribution, art or otherwise, under those circumstances.)
Some changes have been made to LiveJournal, and we hope you enjoy them! As we continue to improve the site on a daily basis to make your experience here better and faster, we would greatly appreciate your feedback about these changes. Please let us know what we can do for you!