Understand the Rules Before You Transport Precious Metals Overseas

by Mark Nestmann
The Nestmann Group, Ltd.

Recently by Mark Nestmann: Think Privacy Is Threatened Today… Just Wait Until Tomorrow!

While it’s perfectly legal to move precious metals in or out of the United States, you must understand the reporting rules before you begin. Otherwise, your risk confiscation of your metals along with possible civil and criminal sanctions. You’re much better off paying an armored security service such as Brinks or ViaMat to transport the metals for you.

However, if you simply want to walk, drive, or fly across a U.S. border carrying, say, 100 one-ounce U.S. gold eagles with a market value of US$175,000 in your carry-on bag, there are two sets of rules with which you must be concerned:

1. Rules from the Treasury Department requiring that you report certain movements of currency and monetary instruments across a U.S. border. These rules don’t appear to apply to gold and silver bullion or coins, for reasons I’ll describe momentarily.

2. Rules from the Census Bureau obligating you to make a declaration if the value of certain commodities that you export from has a value that exceeds $2,500. These rules are poorly publicized. However, border officials routinely confiscate precious metals from travelers who aren’t aware of them. I’ll discuss these rules in my next post.

Gold and Silver Aren’t “Currency or Monetary Instruments”

If you or your agent (e.g., an armored security service) physically transports currency or monetary instruments with an aggregate value that exceeds $10,000 at one time across a U.S. border, you must submit Treasury Form 105, the “Report of International Transportation of Currency or Monetary Instruments” (CMIR).

According to the Treasury Department bureau responsible for Form 105, the Financial Crimes Enforcement Network (FinCEN), the following items are considered currency or monetary instruments. Therefore, they must be reported on the CMIR:

(1) Coin or currency of the United States or of any other country,
(2) Traveler’s checks in any form,
(3) Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title thereto passes upon delivery,
(4) Incomplete instruments (including checks, promissory notes, and money orders) that are signed but on which the name of the payee has been omitted, and
(5) Securities or stock in bearer form or otherwise in such form that title thereto passes upon delivery.

Monetary instruments do not include:

(i) Checks or money orders made payable to the order of a named person which have not been endorsed or which bear restrictive endorsements,
(ii) Warehouse receipts, or
(iii) Bills of lading.

Some countries, include the United States, consider gold and silver coins (but not bars) to be currency. For instance, a one-ounce U.S. gold eagle has a legal tender value of $50 stamped on the coin. However, according to a FinCEN administrative ruling:

The term ‘currency’ is defined in our regulation as ‘the coin and paper money of the United States or of any other country that (1) is designated as legal tender, (2) circulates, and (3) is customarily used and accepted as a medium of exchange in the country of issuance.’ Coins or paper money must satisfy all three conditions to be considered ‘currency’; a failure to satisfy one prong means that the payment instrument is not ‘currency’ for CMIR purposes.

Going back to our example, one-ounce gold eagles are legal tender, but they don’t circulate and they’re not customarily used as a medium of exchange in the United States. Therefore, they’re not considered currency and need not be reported on the CMIR.

Naturally, this doesn’t mean you won’t be harassed by customs agents if you fail to file the CMIR. It wouldn’t hurt to have a printout of the administrative ruling in which FinCEN stated the requirements for coins to be considered currency. You can find it here.

The Census Bureau regulations are a very different matter. I’ll discuss them in Part II of this post.

September 13, 2012

Mark Nestmann [send him mail] is a journalist with more than 20 years of investigative experience and is a charter member of The Sovereign Society’s Council of Experts. He has authored over a dozen books and many additional reports on wealth preservation, privacy and offshore investing. Mark serves as president of his own international consulting firm, The Nestmann Group, Ltd. The Nestmann Group provides international wealth preservation services for high-net worth individuals. Mark is an Associate Member of the American Bar Association (member of subcommittee on Foreign Activities of U.S. Taxpayers, Committee on Taxation) and member of the Society of Professional Journalists. In 2005, he was awarded a Masters of Laws (LL.M) degree in international tax law at the Vienna (Austria) University of Economics and Business Administration.

Copyright © 2012 Mark Nestmann

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