switzerland gold storage

8/12/2019 Switzerland Gold Storage

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Special Report

2009 Casey Research

The Gold Storage Solution:SWITZERLAND


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C R Te Gold Storage Solution: Switzerland+

The Gold Storage Solution:SWITZERLAND

At Casey Research, our task is to accurately forecast trends,do it early, and help investors profit from what weve found.

Without claiming infallibility, weve gotten it right more oftenthan not, and by distinctly profitable margins.

But research to anticipate what to expect is the easy part. Itsthe when-to-expect-it-to-happen thats tricky, and waiting fora predicted trend change or crisis sometimes can test our con-fidence. he crisis we warned about years ago is now here,and its arrival has altered many of the rules for investing.

If youre reading this report, you probably followed our earlieradvice and have accumulated a nice-size crisis insurance poli-cy in the form of physical gold. Now you need to decide whatto do with that stash of Midas cash. It may have been born ina corner of your sock drawer, but perhaps now its stress-test-ing an attic rafter. Unlike gold EFs and mining shares restingdigitally in your brokerage account, physical gold brings withit questions of space and place: how and where to store it.

As to the how, the most common methods for storing phys-ical gold will be obvious to most investors: concealment, ahome safe, or a bank safe deposit box. his is a topic we cov-ered in depth in the September 08 issue of BIG GOLD,

where we recommended using a home safe because 1) itkeeps the gold under your immediate control, and 2) it elimi-nates any risk that storage at a bank carries: emergencies dontschedule themselves bankers hours; if a bank holiday oc-curs, access to a safe deposit box will be lost when its neededmost; and a court can order the seizure of its contents, or theIRS can freeze your assets.

So thats it? A one-size-fits-all storage solution?

No, not quite.

As your gold holdings grow, or if you already own sizableweight or are considering a large purchase, keeping all yourgolden eggs in one steel-and-combination-lock basket maynot be the right solution. As we encourage above, havingsome gold in your immediate control assures that you can see

yourself and your family through any calamity. Now ask your-self: can I keep a secret and not discuss it with anyone? Looselips can only lead to a late-night, ski-mask-clad, armed visi-

tation. How about the security company that installed thesafe how tight are their lips?

Further, keeping large amounts of gold in your possession ex-poses you to a latent threat: political risk. Or in round the wa-ter cooler jargon, a government gold grab.

hink it wont happen in the good ol U.S. of A.? Consider thesurge of government pushiness over just the past six months.he U.S. government has usurped the free market by subsi-dizing entire industries and embarking on mega-dollar stim-ulus spending schemes, committing trillions to its efforts money it doesnt have and must borrow or print. With taxreceipts falling off and government debt exploding, the gov-ernments hunt for revenue could lead to increasingly desper-ate measures.

Weve seen the 1933 black-and-white version of this script,in which the plot develops into a presidential diktat forcingdelivery (confiscation) of gold owned by private citizens tothe government in exchange for compensation at the priceit finds most convenient. Will the temptation again provetoo great? We dont know. What we do know is that once thecredits roll, its too late to start preparing.

So the final storage question must be confronted: whereshould your gold be stored?

Sending Out an SOS: Swiss Offshore Storage

One fundamental rule of investing that hasnt changed is di-versification, and the principle applies to the locations youchoose for storing gold bullion. Follow the principle where itleads, and you find yourself thinking about internationaliz-ing your gold by holding some of it in another country. But itshould be the right country.

So exactly where iswhere

?

he answer is the safest country with the most secure facili-ties: Switzerland. Yes, still Switzerland.

For our money, er, gold, we cant think of a country with astronger legacy of respect for private property. he countrytraces its formation back to 1291, and the first Swiss Confed-eration was formed in 1353. Complete independence camein 1648, when the reaty of Westphalia recognized the final

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separation of Switzerland from the Habsburg Empire. Overthe 361 years following the treaty, Switzerland has main-tained its neutrality and shunned foreign military entangle-ments. Now thats shock and awe.

he countrys domestic politics are characterized by stable,non-intrusive coalition governments. Such habitual civility,together with Switzerlands long tradition of respect for indi-

vidual privacy, has kept this small, largely alpine country atopthe list of the worlds most trusted safe havens.

The Franc: Swiss Hit or Swiss Miss

he global financial and economic crisis has recently foundits way into Eastern Europe, and the troubles brewing therecenter on the Swiss franc. he apparently dire situation ledeconomist Arthur P. Schmidt to predict that Eastern Europesdifficulties would pour over disastrously into Switzerland. Hispredictions grabbed the headlines and a bit of attention.

So, in keeping with the Casey, Intensely Curious, Focusedon Facts, we dug behind the headlines. Heres the big noth-ing we found.

Engaging in a carry-trade-like gamble, individuals and busi-nesses in Poland, Ukraine, Croatia, Hungary, Latvia, and

Belarus borrowed heavily in Swiss francs, attracted by lowinterest rates. hey crossed their fingers for trouble-free re-payment as, for a while, their currencies strengthened againstthe franc. But that strength didnt last. he global econom-ic slowdown hit Eastern Europe hard, and their currencies fellsharply against the Swiss franc, turning mortgages and otherfranc-denominated debts into horrible burdens. Said fingersare now doing a lot of pointing at whos to blame. he size ofthe problem, according to Schmidt, is 230 billion Swiss francs(US$200 billion), and the difficulty of collecting on the loanssupposedly threatens Swiss banks with huge losses that could

bankrupt the country. Schmidt refers to Icelands recent na-tional bankruptcy as a model.

We dont blame him for trying, but the report incorrectly as-sumes that all the Swiss franc loans to Eastern Europe origi-nated at Swiss banks. hey didnt. In fact, its Austrias banksthat have the greatest exposure to Eastern Europe. he dayafter the headlines, Credit Suisse released a report citingthe latest figures from the Swiss National Bank that showSwiss bank loans to Eastern Europe totaled just SF33 billion

(US$28.7B), or 6% of Switzerlands GDP. In contrast, Ice-lands banks had lent over 1,000% of GDP.

Our conclusion: we see no evidence of an impending bank-ing crisis or national bankruptcy in Switzerland. Heidi is safe.

The Gang of 20

At their recently concluded London Summit, the G20 madegood on pre-meeting threats to blacklist countries that refuseto adopt the Organization for Economic Co-operation andDevelopment (OECD) Model ax Convention On Incomeand Capital, Article 26, Exchange of Information. o avoidthe crippling blow blacklisting would deliver to its banking in-dustry, Switzerland regrettably succumbed to the threat.

What does it mean? Article 26 obligates countries to coop-erate in bilateral information exchange for tax purposes if theinformation is foreseeably relevant to the tax affairs of a giv-en taxpayer, but forbids fishing expeditions.

In a blunt response to its critics, Swiss Finance Minister Hans-Rudolf Merz issued a statement saying that Switzerland re-grets this procedure and noted that concrete evidence must

back any suspicion. Other statements by Swiss officials indi-cate that they will not entirely pull off the veil of bank secrecy.

Nonetheless, the veil has been badly torn.

Safe Deposit Box or Box Safely Deposited

If youve been nodding in agreement, then youre ready forthe final question. If asked where is the safest place to store

valuables, most would probably answer, At the bank, or In asafe deposit box. And they might even be right.

But theres an alternative: specialist depositories.

Whats the difference? And is there an advantage to using adepository?

ypically a safe deposit box in Switzerland is located in a se-cure room within a bank, and in many cases inside the bank

vault. Either way, youll be required to first open an account ata Swiss bank before renting a safe deposit box. And that can

be tricky.




In the last few years, Swiss banks have come under growingpressure to share information about their non-Swiss custom-ers with outside tax authorities; thats especially true whenthe customers are Americans. Many Swiss banks now dis-courage Americans from opening an account by requiringminimum balances that can reach six figures and beyond.Some have simply closed the door to U.S. citizens.

And if you have a Swiss or other foreign bank account with abalance that exceeds US$10,000 at any time during the year,you must file form D F 90-22.1, Report of Foreign Bankand Financial Accounts with the reasury Department.

Alternatively, specialist depositories can store your box ofgold in their high-security warehouse and/or vault and canalso provide a range of related services. Unless you want

banking services and are willing to meet the high minimumsand the attendant reporting obligations, we think the answeris to use a Swiss depository for storing your gold.

We examined several bullion storage options and believe themost attractive for both security and price is VIA MA Inter-national, which is located next to the Zurich airport. We justreturned from visiting the facility and talking with the offi-cial who handles the paperwork and logistics for moving andstoring gold bullion, and we cover those details at the end ofthis report. But first lets look at the process of exporting your

gold.

Following the Yellow Brick Road

Once youve decided to store gold in a Swiss depository, thenext step is to get the metal to Zurich. here are three paths

you might take: transporting the gold yourself, internationalair cargo, or international freight forwarder.

Do It Yourself.We do not advise that you attempt to trav-

el with your gold as part of your carry-on luggage. Apart fromthe risk of theft and assault, do you really want to put yourselfat the mercy of the brain trust known as the ransportationSecurity Administration (SA)? And dont kid yourself that

your gold will slip through undetected. Passengers and theirluggage are screened at the airport security checkpoint withmagnetometer devices, the same technology employed in the

wands that treasure seekers use to comb the beach or sweepan underwater shipwreck. Not recommended.

International Air Cargo. International air carriers can trans-port your gold bullion. Such carriers include the cargo di-

visions of commercial airlines and chartered carriers. Eachcarrier has its own procedures for valuation, insurance, andpacking.

International Freight Forwarder.An international freightforwarder is an agent for the exporter (you) in moving car-go (your bullion) to an overseas destination. hey are famil-iar with export regulations, the methods of transport, and therequired documentation. A freight forwarder also serves as aninterface between you and an international air carrier, whichmay lower your costs through the reduced freight rates thatforwarders have negotiated with some air carriers.

he availability of cargo carriers or freight forwarders de-pends on your location Kansas City will offer many choic-es; Emporia, Kansas but a few. A freight forwarder may havean affiliate in your smalltown, but using the affili-ate increases the number oftransfer points, which rais-es the chance for delays ormissed connections. So if

your treasures zip code ex-ceeds the population, wesuggest chauffeuring the

metal to the largest citywithin an acceptable driv-ing distance (but no over-nights). Your road trip willreduce the handling of thegold, save some money,and cut the odds of yourshipment going non-rou-tine.

After choosing the city

from which your gold willbegin its bon voyage, youcan visit the respective air-ports website to learn

which cargo carriers areavailable. Freight forward-ers in the area can be locat-ed doing an Internet searchfor international freightforwarders and the city

Dont Play GamesIf your aim is to protect yourgold from polical risk and otherhazards, dont sabotage yourselfby doing something foolish. Yourairbill and export papers are legadocuments, so dont play gameswith U.S. and Swiss Customs aboutwhat youre exporng.

One surere way to have your

gold conscated is to make a falsedeclaraon as to the contents ofyour curiously pete yet heavybox. If a customs ocer wantsto have a look at your FishingWeights and Lures, the least ofyour worries will be what happensto your gold. Aempng tosmuggle gold outside the countrywill probably get you charged witha few unpleasant-sounding things,and a complimentary overnightbehind bars while awaing yourlawyers arrival.

Dont risk your personal freedomin the name of nancial freedom.Keep everything on the up and upAnd that includes ling FinCENForm 105 (formerly Customs Form4790) with U.S. Customs, declaringthe export of over US$10,000 inmonetary instruments. Theresmuch debate about whether goldbullion/coins are exempt or notPlay it safe. File the form. Dontgive an envy-driven civil servantthe excuse to steal your gold.




name. On a no-name basis, you should contact each prospectto confirm that they handle gold bullion and then request arate quote.

Final Approach

In general, goods entering Switzerland can be stored twoways: bonded or inland. Delivering merchandise to a bond-ed warehouse attracts no duties or other taxes. Such bondedstorage is used when the merchandise will be re-exported orto postpone its importation. Inland storage means your mer-chandise has been formally imported and all duties and taxeshave been assessed and paid. Bonded storage is more expen-sive than inland storage.

And here we have good news: gold bullion is free from Swissimport duty and other taxes. So

you will import your gold into Switzerland and use inlandstorage at VIA MA.

Okay. Your gold has departed the U.S., slept through the in-flight movie, taxied to the gate, been unloaded, and is beingheld by your carrier or forwarder at the Zurich airport. Now

what?

his is when VIA MA gets involved.

VIA MAT International AG

Obstgartenstrasse 27CH-8302 KlotenSwitzerland

el: 011.41.44.804.9500 (from U.S.)Fax: 011.41.44.804.9510 (from U.S.)

Web: http://www.viamat.comEmail: [email protected]

Your airbill will indicate VIA MA as your customs bro-ker in Zurich (other brokers can be used, but we see no ad-vantage to that), so your carrier or forwarder will notify VIAMA that the shipment is being held for customs clearance.

An agent or representative from VIA MA will clear the ship-ment through customs and transport it to their office. You

will already be in Zurich (this is optional; explained below),and VIA MA will contact you about when you should arriveat their office, located about three kilometers from the Zurichairport main terminal.

After you arrive at their office, your shipment is opened andinventoried in your presence. Next, the gold is repacked in a

VIA MA storage container, which then is sealed and taggedwith your account number and transferred to their off-sitevaulting facility. You are issued a storage certificate that iden-tifies you by name and shows the number of the seal on yourcontainer. he original storage receipt must be presented toremove or forward your container. Although this arrange-ment has an account number, its not a financial account;

what you get back is whatever you put into the container.

Also, if you later decide to export more gold from the U.S.to be stored with VIA MA, the second shipment will beprocessed separately, stored in its own VIA MA contain-er, sealed and tagged with a new account number and linkedto its own storage certificate. he co-mingling of stored goldfrom different shipments is not allowed.

VIA MA can complete the entire process in your absence,a service we think many will find appealing. he storage ac-count can be opened and your identity verified via email andthrough the post. hey will arrange for the export of yourgold, customs clear it, and transport it to their facility. Yourshipment is opened, inventoried, repacked, and sealed underdouble custody, and the procedure is videotaped. Your stor-age certificate is returned to you in the mail.

Of course there are many variables, and with that in mind wewere told the charge would be a minimum of US$1,500 forthe in absentia service -- not bad, considering the time andcost of making a trip to Zurich.

First-Class Solutions at Coach Prices

VIA MA International is part of Mat Securitas Express AGof Switzerland, one of Europes oldest (60 years) and mosttrusted armored transport and storage companies. hey are

specialists in the international logistics and storage of treasure.

heir global presence is impressive: offices in Argentina, Bra-zil, Chile, China, France, Germany, Great Britain, Italy, Singa-pore, the U.S., and soon Dubai. hey offer reshipment to anyof these locations, and at your instruction your gold can be di-

vided and shipped to multiple locations. hey have an exten-sive network of partners and representatives that can handlethe forwarding of your shipment to just about anywhere inthe world. And all this can be arranged over the phone.




Of the many facilities that we researched, VIA MA offershands down the most extensive storage and transport optionsat the lowest price. he fees for storing inland gold bullion aredetermined by the golds value as follows:

he monthly storage fee (add 7.6% for Swiss VA) includesinsurance against all risks except war and terrorism under apolicy issued through Marsh Ltd of London and underwrit-ten by Lloyds of London. he value of your vaulted gold will

be determined each quarter based on average London prices,so your monthly bill will vary.

VIA MA is very flexible with payment options. You can paymonthly, quarterly, semi-annually, or yearly. Payment can bemade by personal check, international money order, wiretransfer, or cash in person. You will be invoiced via email; all

billing is paperless. hey do not accept prepayment.

If you come down with a bad case of gold fever, you can ar-range a site visit to view your gold. You and your gold willmeet in a secured area. A fee will be charged to cover the costsof resealing and retagging, the issuance of a new storage cer-tificate, and administration of the process.

Finally, we need to mention that the importation of whitemetals such as silver, platinum, and palladium into Switzer-land are taxed and assessed duty. o avoid such charges, VIAMA can store these materials in their bonded area. VIAMA can email information about the monthly storage fees

and import charges for this service. Contact them for details.

If youre interested, first contact VIA MA by email. Indicatethe service you want and request additional information. Ex-pect a prompt reply. Print the materials you receive so that

you can refer to them when you start the account-openingprocess.

he VIA MA representative youll be working with will be

friendly, knowledgeable, professional, and fluent in English.We are completely confident in our recommendation.

As a Casey Research subscriber, you know that Doug Caseyand his team are strong believers in own-ing gold in several of its many forms: bul-lion, mining stocks, and a variety of securi-ties. If youve read this far, chances are youagree with us, and have a pretty serious in-terest in gold. If thats the case, wed like toinvite you to try BIG GOLDfor just $79 a

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