Category Archives: Legal

Economist Martin Armstrong Warns Of Storing Assets In U.S. Bank Safe Deposit Boxes

We’re back after a short break. And to jump start the continued discussion about asset protection outside the United States, I’d like to point out a February 25 blog post by economist Martin Armstrong on his company’s website. Regular readers of Offshore Safe Deposit Boxes know that Armstrong brings up bank safe deposit boxes from time to time, and the head of Armstrong Economics penned the following while I was away:

Keep in mind the government can close all banks for there is precedent. Whatever you have in a safe deposit box can also be seized and inspected.

There is no precise law against storing metal or cash in a safe deposit box. But law is malleable in the hands of any judge. He can seize the money or gold under the pretense of money laundering hiding it from the government. Under Civil Asset Forfeiture, they can assume the money is guilty of a crime being even tax evasion. It then is your burden to fight in court to get it back if you can hire a lawyer…

(Editor’s note: Bold added for emphasis)

Keep in mind that Armstrong is referring to safe deposit boxes in U.S. financial institutions here, not secured storage containers located in private vaults outside the American banking system.

That being said, the economist sees a “global trend” in the seizure of assets through claims of money laundering and tax evasion. I blogged back on June 6, 2016:

Martin Armstrong… has chimed in on the new HSBC safe deposit box regulations in Hong Kong. He issued this warning on his company’s blog Friday:

Governments are targeting safe-deposit boxes to look for cash that is hiding from taxation. HSBC, a U.K. bank, is now moving against claimed financial crimes by altering conditions for safe-deposit boxes. This is becoming a global trend. Anything of value that is stored in a safe-deposit box is now considered money laundering. Governments want their taxes and all the laws are changing to ensure they get their money.

(Editor’s note: Bold added for emphasis)

“Anything of value that is stored in a safe-deposit box is now considered money laundering”

Does that include legally-purchased and owned precious metals (with receipts to boot also showing taxes paid when applicable)?

Once again, these are bank safe deposit boxes Armstrong is talking about.

To date, I haven’t encountered anything by Mr. Armstrong about boxes in private, non-bank vaults.

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on information found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

Source:

Armstrong, Martin. “Is it Safe to Store Gold in a Safe Deposit Box?” Armstrong Economics Blog. 25 Feb. 2017. (https://www.armstrongeconomics.com/markets-by-sector/precious-metals/gold/is-it-safe-to-store-gold-in-a-safe-deposit-box/). 7 Mar. 2017.

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Related Reading: Another Take On ‘Old’ Gold Coins Being Better Than Bullion Against Confiscation

Earlier this week I discussed two recent blog posts by economist Martin Armstrong concerning what he thinks is the most effective way to possess and retain physical gold in the face of government confiscation.

My understanding was “genuine old coins,” as:

Coins are better than bullion for they have some historical value. Their historical value could be an excuse to prevent confiscation if government simply declares that “gold is for criminals,” as they are trying to do with cash…

Another take on this comes from offshore expert Mark Nestmann, head of Phoenix, Arizona-based The Nestmann Group, who pointed out the following on The Silver Bear Cafe website some time ago:

Some coin dealers claim that numismatic (collector) coins would be exempt from any future government confiscation of gold and silver. This claim is based on the terms of Roosevelt’s 1933 emergency order, which specifically exempted “coins having recognized special value to collectors of rare and unusual coins.”

Some firms say that premiums of at least 15% over the spot price of bullion magically turn coins “numismatic.” This notion is based on a proposed federal regulation issued in 1984, but never adopted. Other dealers claim that coins 100 years or older are automatically converted to numismatic status.

It’s beyond me why anyone takes these claims seriously. Why would a government that stole its citizens’ property in 1933 be consistent when it does so again?

Nothing obliges the federal government to pay by the same set of “rules” it imposed 75 years go. Nothing obliges the federal government to honor the terms of a proposed regulation issued a quarter century ago. And naturally, those rules can change at any time

(Editor’s note: Bold added for emphasis)

What Nestmann wrote has stuck with me as I keep coming across the debate over what makes a coin “numismatic.” I even stumbled on the following just the other night on the website of a company offering asset protection services:

For a coin to be numismatic, its retail price must be double the value of its metal content.

Perhaps all for naught, according to Nestmann?

An insightful piece (he does espouse positioning “some gold and silver bullion outside the United States, preferably in a safety deposit box or a private vault”), which you can read in its entirety here on The Silver Bear Cafe site. For more information about The Nestmann Group, visit their website here.

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: The mention of businesses above should not be construed as confirmation of services claimed to be provided or any sort of recommendation. A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

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Proposal To Seize ‘Suspicious’ Cash, Precious Metals Entering The European Union

Regular readers of Offshore Safe Deposit Boxes know that I’ve blogged before about transporting cash (March 19, 2014) and precious metals (March 20, 2014) outside the U.S. for the purpose of placing/acquiring assets in/for an offshore safe deposit box. I last discussed this subject in March 2015, where I pointed out a piece by Andrew Henderson over on the Nomad Capitalist website regarding currency reporting requirements for Australia, China, the European Union, India, Mexico, Switzerland, Thailand, United Kingdom, and the United States.

Speaking of the European Union, last week I came across an article on Reuters.com which may have repercussions for those looking to carry currency/precious metals into the E.U. for their safe deposit box. Francesco Guarascio reported on December 21:

The European Commission proposed tightening controls on cash and precious metals transfers from outside the EU on Wednesday, in a bid to shut down one route for funding of militant attacks on the continent.

The move follows Monday’s attack on a Christmas market in Berlin, where 12 people were killed as a truck plowed into a crowd. It is part of an EU “action plan against terrorist financing” unveiled after the bombings and shootings in Paris in November 2015.

Under the new proposals, customs officials in European Union states can step up checks on cash and prepaid payment cards sent by post or in freight shipments.

Authorities will also be able to seize cash or precious metals carried by suspect individuals entering the EU.

People carrying more than 10,000 euros ($10,400) in cash already have to declare this at customs when entering the EU. The new rules would allow authorities to seize money below that threshold “where there are suspicions of criminal activity,” the EU executive commission said in a note…

(Editor’s note: Bold added for emphasis)

Since cash/precious metals could be seized merely on “suspicions of criminal activity,” it’s a good bet persons originally intending to carry legally-obtained and owned currency and precious metals into the Eurpoean Union for their safe deposit box might think twice about transporting such assets in this manner.

Guarascio noted:

The proposals must be approved by EU states and the European Parliament to become law…

Stay tuned…

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

Source:

Guarascio, Francesco. “EU to boost border checks on cash, gold to tacke “terrorism financing.” Reuters.com. 21 Dec. 2016. (http://www.reuters.com/article/us-eu-security-financing-idUSKBN14A16N?il=0). 28 Dec. 2016.

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Canadian Bank ‘Bail-In’ Legislation Latest

Back on March 23 I blogged about Canada introducing bank “bail-in” legislation. I wrote:

As concerns grow about the health of the global economy, ‘bail-in’ programs look to proliferate outside Europe. Leah Schnurr reported Tuesday afternoon on the Reuters website:

Canada will introduce legislation to implement a “bail-in” regime for systemically important banks that would shift some of the responsibility for propping up failing institutions to creditors.

The proposed plan outlined in the federal budget released on Tuesday would allow authorities to convert eligible long-term debt of a failing lender into common shares in order to recapitalize the bank, allowing it to remain operating.

The plan is in line with international efforts to address the potential risks to the financial system from institutions that are deemed too big to fail, the budget document said…

(Editor’s note: Bold added for emphasis)

I’ve been curious about the “progress” being made by our neighbors to the north with implementing this “bail-in” program for “systemically important banks.” Poking around the Internet the other day, I came across this article on Lexology.com from Craig Bellefontaine and Koker Christensen of international business law firm Fasken Martineau DuMoulin. They wrote on May 4, 2016:

Budget 2016, released on March 22, 2016, reiterated the Government of Canada’s commitment to introducing a bail-in regime. With the tabling of Bill C-15, Budget Implementation Act, 2016, No. 1, on April 20, 2016, the arrival of a bail-in regime to Canada came one step closer to fruition. Bill C-15 includes amendments to the Canada Deposit Insurance Corporation Act (“CDIC Act”), the Bank Act and other related Acts that, if passed, will establish the framework for a bail-in regime for Canada’s domestic systemically important banks (“D-SIBs”)

(Editor’s note: Bold added for emphasis)

In my March post I also asked this question:

Could depositors be targeted in a future Canadian bank bail-in as a result of this coming legislation? Is there a scenario where assets stored in bank safe deposit boxes might also be threatened? It’s too early to tell at this point…

Well, I spotted another piece on Lexology from Jennifer Allman, Darcy Ammerman, Pat Forgione, and Robert M. Scavone of Canadian business law firm McMillan. They wrote on May 12:

In our April 2016 bulletin, we discussed concerns over whether consumer deposits would be part of the eligible debt responsible for bailing-in a bank. For the moment, these concerns remain unanswered; the types of liabilities subject to the bail-in regime are not set out in Bill C-15. Instead, they will be specified in regulations to the Canada Deposit Insurance Corporation Act, which have yet to be prescribed. When the bail-in proposals were first proposed by the previous Conservative Government, communications from the Minister of Finance denied that depositors’ accounts would be subject to the bail-in regime

(Editor’s note: Bold added for emphasis)

Stay tuned…

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on information found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

Sources:

Bellefontaine, Craig and Christensen, Koker. “Canadian Bail-In Framework Unveiled.” Lexology.com. 4 May 2016. (http://www.lexology.com/library/detail.aspx?g=76d770fc-8b49-44d7-9eb2-741549ac0cc7). 7 June 2016.

Allman, Jennifer, Ammerman, Darcy, Forgione, Pat, and Scavone, Robert M. “Updates to the Bail-In Regime: Introduction of Bill C-15.” Lexology.com. 12 May 2016. (http://www.lexology.com/library/detail.aspx?g=2f5edde7-7cf8-42f6-a93b-324f10ae16aa). 7 June 2016.

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