Gold Bullion Storage Program

Introduction – Our clients frequently ask us about balancing their portfolio with gold bullion. Of course storing gold bullion is a difficult, risky and expensive proposition.

Physical Gold Bullion Storage Problems - Taking physical delivery of gold and keeping it in a home safe no matter how big or secure is a risky proposition. If one knows you have the gold you are subject to a robbery, home invasion robbery where you are forced at gunpoint to open the safe, kidnapping, extortion, blackmail, threat of fire, flood, earthquake, civil disaster, etc.

Bank vaults are generally small, not insured, and leaves the gold vulnerable to court actions, seizures, liens, attachments, freezes, confiscations, and so forth unless you store the gold in a secure privacy country. This then leaves you and your Gold separated by long distances, and if you go to the Gold physically liquidation is a problem. How does one get the Gold out of the bank vault box to an assay office to ascertain the purity and weight of the Gold, which is generally required.

Before anyone buys your Gold Coins, Bars, Wire etc they are going to want to make sure of the quality to protect against counterfeit coins, bars etc. Then you need to take the gold to a Gold exchange merchant in that country so think armored car and pay additional fees beyond the assayer along with any unique taxes that country may have for Gold Bullion which are common.

Then the country will probably have some reportage requirements for any transaction over $10,000, which would require passport, and other ID. This is not a workable solution. What if you cannot travel like work issues, health issues or civil unrest is an issue? The time and expense is another issue.

And lastly imagine yourself running around some strange country with your Gold in an armored car attracting all sorts of unwanted attention. So the problem of how to enable a client to have their Panama Foundation or Panama Corporation own Gold Bullion safely, securely, and privately as well as cost effectively was one we set out to find a solution for.

Perth Mint – This is the best solution we are aware of. The Perth mint is owned and operated by the Government of Western Australia. Western Australia is one of the States of Australia. Consisting of 2,500,000 sq. kilometers of land and containing 2 million people it is Australia’s largest state making up about one third of the Country of Australia land area. It is legally part of Australia and under the government of Australia. It is not some wacko renegade country; it is a legitimate state of Australia.

The Gold Certificate program is the program we are dealing with (read more below) and this program is administered by the Gold Corporation, which is entirely owned by the Government of Western Australia. This is the only Gold Storage Certificate Program in the world owned and operated by a legitimate government authority. If that is not enough the Gold in the certificate program is insured by Lloyds of London. Western Australia has an AAA rating from Standards and Poor’s. Perth Mint refines almost 7% of the worlds gold. The Perth mint currently holds accreditation from the following recognized bodies that are major players in the world gold markets:

• The London Bullion Market Association
• The New York Commodities Exchange (COMEX)
• The Tokyo Commodities Exchange (TOCOM)

Perth mint has been in business since 1899. When you consider all the variables your Gold is safer in the Perth Mint Certificate program than it would be sitting in your banks safe deposit box the contents of which are going to be uninsured.

The Perth Mint Certificate Program solves a lot of problems like security, stability, ease of ownership, privacy of acquisition, ease of liquidation, transportability, protection against counterfeit items, frauds etc. What we do needed to do was find a way for your Anonymous Panama Foundation or Anonymous Panama Corporation to own Gold Bullion as privately and practically as possible. This is the solution.

Perth Mint Certificate Program – Basically what is done is you acquire Gold Bullion that is stored at the Perth Mint for which you are given a warehouse receipt called a Certificate. This certificate is registered to a person who need not be the owner just the operator of the account, more on this later. The certificate is identified by a client code and a certificate number. The certificate is legally a non-negotiable but transferable warehouse receipt and is not a bearer instrument and it so states this clearly on the physical receipt. This is not a bearer instrument or a negotiable monetary instrument. Remember this is a government issued document and as far as we know it has never been interpreted as a bearer instrument or a monetary instrument in the past. This would most likely never be interpreted as such since it does not meet the test of such an instrument in that merely handing one the receipt does not accomplish the transfer of the Gold.

Perth Mint Certificate Program Secrecy – The Western Australia Government passed a law called the Gold Company Act 1987.

There is a provision inside of this act for secrecy, something closely resembling bank secrecy. Basically it allows for the release of information only under a court order and this of course means a court of competent jurisdiction, which would mean one in Australia. You can read the entire secrecy section below and please note it provides for fines and prison sentences:

GOLD CORPORATION ACT 1987 - SECT 74
Secrecy and security of records of Gold Corporation and its subsidiaries

74 . Secrecy and security of records of Gold Corporation and its subsidiaries

(1) Except in the performance of a function under or in connection with this Act or any other Act or as required by section 6(7), (8) or (9), a person to whom section 72(1) applies shall not, either directly or indirectly —

(a) make a record of, or divulge to any person, any information concerning the business affairs of another person acquired by him by reason of his office or employment under or for the purposes of this Act; or
(b) produce to any person any document relating to the business affairs of another person furnished for the purposes of this Act, unless the prior permission of the person owning or operating the business to which that information or document relates has been obtained or subsection (2) applies.

Penalty: $10 000 and imprisonment for 1 year.

(2) Nothing in this section precludes a person from —

(a) Divulging to a court in the course of criminal proceedings, or proceedings under this Act or a prescribed Act, any information coming under notice of that person in the performance of official duties, or the performance of a function under this Act;
(b) Producing a document to a court in the course of criminal proceedings, or proceedings under this Act or a prescribed Act; or
(c) Divulging information or producing a document that the person is required to so divulge or produce by any other Act.

(3) A person who conceals, destroys, mutilates or falsifies any securities of or belonging to the Mint or any record affecting or relating to affairs of the Mint is guilty of an offence.

Penalty: $10 000 and imprisonment for 2 years.

(4) Where matter that is used or intended to be used in connection with the keeping of any record affecting or relating to affairs of the Mint is recorded or stored in an illegible form by means of a mechanical device, an electronic device or any other device, a person who —

(a) Records or stores by means of that device matter that he knows to be false or misleading in a material particular;
(b) Destroys, removes or falsifies matter that is recorded or stored by means of the device, or has been prepared for the purpose of being recorded or stored, or for use in compiling or recovering other matter to be recorded or stored, by means of that device; or
(c) Fails to record or store matter by means of that device with intent to falsify any entry made or intended to be compiled, wholly or in part, from that matter, is guilty of an offence.

Penalty: $10 000 and imprisonment for 2 years.

(5) It is a defence to a charge arising under subsection (3) or (4) if the defendant proves that he acted honestly and that in all the circumstances the act or omission constituting the offence should be excused.

(6) In this section —

“information” includes any record relating to information;

“record” includes any document, accounts or accounting records and any other method of compiling information however prepared, recorded or stored;

“to divulge” includes to communicate by any means whatsoever, or to produce or furnish any record, or any copy of or extract from a record; and

“to produce” includes to permit access to, obtain for or make available.

[Section 74 amended by No. 10 of 1990 s.32.]

Perth Mint Paperwork – Perth Mint is not a bank and not subject to bank rules, regulations and know your customer requirements. There would be no beneficiary owner statement required as all banks are required to have the account signatory complete. What Perth Mint asks you to do is complete a simple order form, which asks the following:

• Account Name – Could be xyz corporation or foundation
• Street Address – The registered address for the corporation or foundation
  Phone; fax email that will not appear on the certificate just in their records.

And the best part follows:
OPERATING AUTHORITIES – The Perth Mint Paperwork for account opening does not say owner, it does not say beneficiary owner and it does not use the term signatory. The Foundation or Corporation will be the owner and in Panama these are anonymous in that the names of the actual owners, protectors, beneficiaries do not appear in any public registry and the Panama Government does not even know who they are. The operating authorities are the people who can operate the account, in other words buy, sell or transfer the Gold being stored as represented by the certificate. The account can have two joint operating authorities (two people who must both sign off on transactions).

Typical Asset Protection Scenario

A Panama Foundation can own a Panama Corporation. No one owns a Panama Foundation by definition under Panama Law. The Panama Corporation which you do not own, could appoint you as the operating authority as part of your employment duties as investment manager for the corporation which is clearly stated in your employment agreement that is signed, notarized and apostilled by the nominee directors of the corporation. The Gold then belongs to a Corporation you do not own under Panama Law. The Foundation would own the corporation and it is impossible for you to own a Panama Foundation under Panama Law. A similar scenario could be structured using the foundation instead with the foundation protector being the operating authority. Remember no one can own a Panama Foundation.

Asset Protection Considerations – The program should never be entered into using a personal name, only use a corporation or foundation. We do not work with personal holding accounts. The asset protection value is just not there with a personal account. The gold certificate and the gold itself is owned by the Panama Foundation or Panama Corporation not you when it is done correctly for asset protection purposes. The assets and liabilities of a Foundation or Corporation are different than your assets and liabilities.

If the foundation or corporation had creditors conceivably they could try to go to Australia and Panama and try to get a court order to turn the gold over to the creditor. They would probably need to get the courts in both jurisdictions to issue them judgments. It would be extremely hard to accomplish this since they would be dealing with Panama Secrecy Laws for corporations and banks plus the Perth Mint Secrecy Laws.

To get at the assets in court a direct trail of ownership and money flow would need to be demonstrated, not based on supposition and speculation but documented with official records. This would be a monumental task and it may not even be practically possible due to statue of limitation considerations, secrecy laws and then one has to consider cost effectiveness of such a monumental undertaking. If at any point in time while the creditor was in pursuit of a recovery, the owner of the gold certificate became uncomfortable they could sell the gold or transfer the holdings to another entity such as another corporation or foundation further compounding the complexities of a collection lawsuit immensely. This is a secure asset protection strategy for those wishing to hold Gold, Platinum or Silver Bullion in their portfolio.

Documentation Required - A notarized passport copy and driver license copy is required for the operating authority person(s) plus a copy of their signature must be notarized. One signs the form and the notary stamps and signs next to the signature that they signed the specimen signature in their presence. Do get the signature to resemble your signature in your passport. If you use the middle name in the passport signature do so here. We will also need to supply them with appropriate Corporate and Foundation documents which is no problem and that is our job. We would also require a bank reference letter and a general business reference letter for the operating authority person. None of these documents get into the public domain. Perth Mint has statutory secrecy laws closely resembling bank secrecy. Additionally you are not the owner of the gold, the corporation or foundation owns the gold.

How to Buy Gold, Silver or Platinum - All three metals are available in the certificate program. After an application has been filled out an order for buy or sell is filled out. You can even specify a strike price for which the order will be executed when the price is reached, same for a sell order. After all the paperwork is in, you would render payment to the Perth Mint Dealer for Latin America. We would do the coordination as the legal representative of the Panama Corporation or Foundation and supply them with the appropriate paper work. They happen to be in Panama City near our law offices so we just messenger over the paperwork very conveniently.

Payment Methods – The funds for the purchase of Gold, Silver or Platinum will go directly to the Perth Mint Dealer for Latin America, not our law firm. The dealer in turn remits the funds to Perth Mint in Western Australia by bank wire. Perth Mint does not deal directly with individuals ever, one must use a dealer.

Panama is the best place to deal with a dealer due to extreme bank secrecy and serious corporate privacy for the dealer. You cannot wire direct to Perth Mint. You would be wiring to the dealers corporate bank account in Panama. Nothing in their name or wiring instructions would indicate there is any connection to Perth Mint or precious metals. The dealer uses a Panama S.A. corporation with a Panama Bank with Panama Bank Secrecy so the bank records are seriously protected from privacy invasion. The Perth Mint dealer will accept a Panama Bank Check or an International Bank Wire Transfer. No checks, money orders of any sort from a non-Panama bank. Wire transfer can come from anywhere.

When the money and paperwork is received it is sent to the Perth Mint. The order is executed at the Perth Mint after all is received. Within two weeks you will receive your certificate sent to you directly from the Perth Mint. You cannot lock in a price by merely placing an order without receipt of funds. The mint must receive the paperwork and funds. The program is for long-term investment, not short term trading. Our law firm is located in close proximity to the only Latin America Dealer for Perth Mint and we can messenger documents to them making sure a full and complete file is being compiled to avoid any delays.

Minimums – The minimum to open a certificate account is $10,000. The additional transactions must be at least $5,000. A $5,000 minimum must be maintained at all times.

Selling – Basically it is a reversal of the process. You physically send in the certificate and an executed transaction order. You can order a sale to not take place until a certain price is reached.

Day Trading – The program is not good for this, forget it.

Receipt of Sale Proceeds – Funds can be sent to you as a check by courier or sent as a bank wire. They wire the funds back to the same account they were sent from which should be the foundation or corporation bank account in Panama. If a check is requested it would be in the name of the corporation or foundation. You can sell part of the holdings represented by the certificate; it is not an all or nothing. If a partial sale was accomplished a new certificate would be issued to you representing the lesser amount.

Reportage– The Perth Mint reports nothing to any government anywhere. Perth mint requires no tax forms to be filled out at all. Since it is not a Bank the EU Savings Tax does not apply, no bank interest is being paid to you. The Perth Mint is not a bank. At no point will anyone ask you for your tax identification numbers from any government.

Taxation – Your Panama Corporation or Foundation would not incur any tax obligation to Panama for any gains made by selling Gold Bullion in a foreign market. This is tax-free as far as Panama is concerned. Only people from Australia and New Zealand would have tax issues with their governments since the Perth Mint is located in Australia.

Fees – The fees are simple. To BUY the fee is 2%. To SELL the fee is 1%. There is a further fee of $50.00 for each certificate issued. If you wish to have a check sent to you by courier the fee is $50.00. There is a wire fee of $25.00 for wires of $10,000 to $25,000 and a fee of 0.0625% for wires over $25,000 to maximum of $250.00. With unallocated storage there are NO STORAGE FEES. This is the suggested method. Unallocated means your Gold holdings are part of the overall holdings of the mint. The gold could be in form of pure 99.999 gold bricks, bars, coins or unfabricated. Allocated storage means your holdings are put in a segregated holder. The fees for this are 1.5% per year for Gold and Platinum and 2% per year for silver. This is not recommended in that over the years it will eat up your assets.

Delivery – You could with two weeks notice take actual physical of delivery of the Gold. There would be additional fees involved and this is not recommended for reasons discussed at the beginning of the article. This could also result in tax and reportage obligations depending on the jurisdiction you take deliver in, your citizenship etc. Some countries do not allow ownership of Gold for their citizens.

Questions – Feel free to ask questions.