17 May 2017
Author: Joel Kravitz
International Precious Metals Specialist
Benjamin Franklin, one of the Founding Fathers of the United States, coined the phrase “Time is Money”.
Fortunately for owners of precious metal currency coins produced by the Royal Canadian Mint and the U.S. Mint, they own money as well. They are both considered legal tender with a Government face value! There are laws enacted by both countries to enhance the ownership value for these types of coins.
What does that mean to you?
Protection is the first thing that enters my mind as an owner of precious metals. The question is do I want to protect myself with U.S. currency coins or Canadian currency coins?
There are advantages to owning these particular types of precious metals, Government Currency Coins. This is due to the fact that bullion coins by law offer legal tender currency value by the government mints who manufacture them. However, one must consider the difference when looking at Canadian Currency coins because they offer additional protections for an American citizen, different than that of the American Bullion coins due to previous confiscation acts like the 1933 Executive order 6102.
Both countries back their gold, platinum and silver bullion coins with a legal tender face value. First we will consider the U.S. Coins, as the 2005 Public Law and Coin Act amended U.S. law to make Gold Bullion U.S. legal tender such as the Buffalo. Second is the Bank Act of Canada which authorizes and empowers the banks to buy and sell gold directly, unlike the U.S. laws that only make U.S. Gold Coins legal tender, not authorizing banks to buy and sell them.
Canadian Maple Leafs and American Eagles or Buffalos are the most common of the legal tender coins from the U.S. or Canada. However they are not the only Legal Tender coins these Mints produce.
I reference these acts below, to show you a glimpse of the two countries’ laws relating to Gold, Silver and Platinum Bullion. I hope this helps you as it relates to the value of coins, and how certain precious metals are also considered currency with face value, not just the market value.
PRESIDENTIAL $1 COIN ACT OF 2005 [[Page 119 STAT. 2664]] Public Law 109-145 109th Congress
TITLE II–BUFFALO GOLD BULLION COINS SEC. 201. GOLD BULLION COINS. Section 5112 of title 31, United States Code, is amended
Legal tender – The coins minted under this title shall be legal tender, as provided in section 5103.
Here is an important excerpt from Wikipedia that shows how the 1964 Legal Tender Act protects coins and that their legal tender status cannot be taken away even as old as the Pre-1933 Gold Coins:
“Demonetization is currently prohibited in the United States and the Coinage Act of 1965 applies to all US coins and currency regardless of age. The closest historical equivalent in the U.S., other than Confederate money, was from 1933 to 1974, when the government banned most private ownership of gold bullion, including gold coins held for non-numismatic purposes. Now, however, even surviving pre-1933 gold coins are legal tender under the 1964 act”.
Bank of Canada Act (R.S.C., 1985, c. B-2)
Canadian law give Banks the Business and Powers to sell or buy Gold, Silver or any coin.
Banks in Canada state on their Bullion division webpages that Maple Leaf Coins are Legal Tender Value Coins, and the bars and all other products are only stated as Bullion.
For example the Gold Maple Leaf referenced below on Wikipedia has a legal tender value of 50 Canadian dollars. The Canadian Maple Leaf is legal tender.
The face value of the 1 oz. Gold Maple Leaf is 50 Canadian dollars, the 1 oz. Silver Maple Leaf is 5 Canadian dollars, and the face value of a 1 oz. Platinum Maple Leaf is 100 Canadian dollars. Many other face value coins are produced by the Royal Canadian Mint, authorized by the Bank of Canada. The market value of coins fluctuates depending on the spot price of gold, silver or platinum at any given time.
Traveling with Legal Tender Face Value Coins
This section is intended to be informative. This is not legal advice nor is it guidance, as laws may change from time to time by either Government relating to monetary instrument laws for importing/exporting, etc.
When traveling between the United States and Canada, the laws for Bullion Government Currency Coins are that both countries treat each other’s currency laws and valuation at the Face Value of the coin. The importation laws as well as for customs purposes also treats currency coins at face value and not the melt value.
For those people who have precious metal currency coins from a Government Mint, here are a few instances showing the U.S. Customs Tariff Rulings that are published as examples for importing and exporting.
In the following example, a 1oz. Chinese Silver Panda Coin has been classified as a “legal tender currency coin” and not a piece of silver or a product: “silver coins from China are classified in heading 7118, HTSUS, and specifically under subheading 7118.90.0055, HTSU”
Clarification by the U.S Customs in this tariff ruling defines legal tender as:
“The Oxford English Dictionary defines “legal tender” as “coin or other money, which a creditor is bound by law to accept, when tendered in payment of a debt.” According to Webster’s College Dictionary, “legal tender” is “money that may be legally offered in payment of an obligation and that a creditor must accept.” According to a numismatic dictionary, non-circulating legal tender is “a coin struck by the national issuing authority mainly to be sold to collectors. The coins also have a face value and can be spent in the country of issue.”
Rulings such as these are exactly the kind of proof a citizen needs in order to properly inform the Customs officer at either the U.S. or Canadian side as to what you are importing or carrying with you. Face Value coins are subject, of course, to no duties, but it is wise and important to inform your customs officer if you have a substantial amount of precious metals at Face Value.
Please keep in mind though that a $50 Canadian Currency Coin is valued at U.S. Customs based on the daily conversion rate. So at today’s rate a $50 Gold Maple Leaf would be approximately $37 U.S. Dollars. With a $10,000 maximum limit today for carrying or importing monetary instruments, one could bring (270) two hundred and seventy $50 Gold Maple Leaf Coins and have no Fincen or IRS forms to complete or fill out at Customs when entering the U.S. That is not to mean that you will not tell your customs officer what you have, if it is Currency Coins that you are traveling with. It is always better to be safe than sorry when it comes to customs and importing/exporting. The key is to know your laws, and be prepared with the proper information to help expedite your clearing.
In another such example the U.S. Customs Tariff Rulings have defined the Gold American Buffalo and the Gold American Eagle with a monetary value (which is $50) and is considered to be legal tender currency or coinage.
The definition of “monetary” is: “Of or relating to coinage or currency”. Further reference for the meaning of coinage and coining provides that coinage is the action or process of coining money. Coining is the making of coin – minting. With case in point, the gold coin blanks meet the definition of “monetary” and are classifiable in subheading 7108.20.0000 of the HTSUS. The applicable subheading for the gold coin blanks will be 7108.20.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Gold (including gold plated with platinum) unwrought or in semi-manufactured forms, or in powder form: Monetary.”
The goal of this article is to help guide owners of Precious Metals who wonder how one should or could travel, or ship their investment around the world. I hope this helps, as our goal is to provide services to our clients that help protect their international diversification of Precious Metals.
Miles Franklin offers several Precious Metal Storage programs throughout Canada. We have Unencumbered Segregated Storage located in Montreal and Vancouver with services provided by Brink’s. In addition we also have two Safe Deposit Box Vaults located in Toronto and Vancouver with services provided by Brink’s, a first of its kind.
Storing metals in a vault in Canada is secure and offers fully insured protection. Knowing that you can buy or sell your metals through Miles Franklin, pick them up in person and travel back to the U.S., sell them in Canada or ship to roughly 100 countries in the world, offers peace of mind.
My name is Joel Kravitz. I am the Chief Operating Officer at Miles Franklin Precious Metal Storage. My duties range from sales and importing, to managing the day to day operations with our vault storage. I personally specialize in the importing of Gold and Silver into the United States and Canada. Whether you are planning on repatriating your gold, platinum or silver back to North America for storage or even for home delivery, Miles Franklin and I can be of help. American and Canadian Citizens have a very difficult time importing precious metals. U.S Citizens cannot directly import precious metals themselves and require the services of a broker such as Miles Franklin to facilitate the entrance to the U.S. or Canada. We have the expertise and knowledge with Customs brokers and contacts already in place for import and export with business accounts in both the United States and Canada.
Please review our limited time offer below, Free International Transfer of your Precious Metals from almost anywhere in the world into any of our Canadian Vaults, with services provided by Brink’s.
Chief Operating Officer – Miles Franklin Precious Metal Storage
Minnesota Bullion Dealers License #40387454
Miles Franklin is offering for a limited time only, Free Insured Brink’s pick-up and delivery (paid by Miles Franklin on our account), for International Shipments of 500 ounces or more of Gold or Platinum into any of our vaults in Canada for storage. This special requires the transfer to be from an existing Vault, Bank, Safe Deposit Box or storage facility that Brink’s is able to pick up and ship from. Examples: Switzerland, Singapore, Hong Kong, Australia, Panama, and many more countries around the world. Miles Franklin will coordinate the pick-up and delivery. *(1 Year minimum storage agreement applies).
Offer valid through July 15th, 2017. Clients with existing metals in the U.S or Canada with 30 oz. or more of Gold or Platinum will also receive free shipping to the vault of their choice in Canada. Clients will first ship their metals to our warehouse in Fargo, ND and then Miles Franklin will deliver, and pay to ship insured, to the vault in Canada that you have selected.