Monday, September 22, 2014

Transporting Gold Across The Border to Canada

by Roger on October 14, 2009

Gold Krugerrand Coin

Gold Krugerrand Coin

Much has been written about getting physical gold out of the United States. This article actually touches on the additional topic of how many people even know what a gold coin looks like, let alone own one (or more).

One of Casey Research’s readers sent this note to editor David Galland regarding his experience taking 20 gold Krugerrand from the U.S. to Canada.

Amusing, sad, and only mildly encouraging.

Last week I flew from Houston, Texas, to Calgary, Alberta, and I had 20 Krugerrands in my carry-on bag.

I have had “run-ins” with U.S. customs agents before and I didn’t want to repeat the experience. With this in mind, I called the customs office at the airport beforehand and told the agent that I would be carrying gold coins and asked him how to value them to conform to the ten thousand-dollar rule. He had no idea what I was talking about and told me to check with the airline when I got to the airport and they could help me.

Knowing that this was inaccurate but willing to play along, I presented my valuation question for declaring the coins to the airline check-in person. She, of course, had no idea what I was talking about and told me that nothing needed to be declared on the way out, but only on my arrival in Canada.

I next asked my question of the security person at the head of the security line. She at least had heard of the ten thousand-dollar rule but had no idea about valuation of gold. She told me to check with the security guy at the scanner. At this point, I’d had it. I just threw my bag on the scanner and picked it up on the other end and walked on the plane with no problem.

The situation went downhill at Canadian customs. I was still trying to do the right thing and asked the agent if I needed to declare. He had no idea and called his superior, who had no idea. I was then sent to the secondary agent to be checked. I told her I was just trying to determine if I needed to declare the coins dependent on value. She left for about five minutes to talk to a supervisor. She came back and asked me what they were worth. Trying to be honest, I told her it varied from day to day, but that they could probably bring between $900 to $1,000 each. She left again for five or ten minutes to check with her supervisor.

When she came back this time, she told me that they had decided that the coins must be rare collector items being brought into the country for resale. As such, they would not be classified as monetary instruments but as commercial merchandise, and they would need to collect GST on them. I did a quick calculation in my head and realized that they were getting ready to ask me for a thousand bucks to walk through customs with the coins.

I had also planned ahead for this problem and told her that I had called their central office before the trip and had been assured that no tax would be due on entry. She asked me if I had a name and number that I had called, which I provided to her. She still thought that they were collector items, so I just spilled several of them out on the desk to show that they were not protected in any way as I shuffled them together. She admitted that she had never seen a gold coin before.

She asked again about value, and I brought out another piece of paper that I carry with me. It is a downloaded page from the U.S. Treasury website that shows that the Federal Reserve and the Department of the Treasury value gold for inventory purposes at $42.22 per ounce. She thought this over for a minute and asked if I had any idea what they weighed. I told her that they each contained exactly one ounce of pure gold. She took this information and my downloaded page back in the back to her supervisor.

After another five or ten minutes, she came back and said that because they were worth $42.22 each and I only had 20 of them, I was well under the ten thousand-dollar declaration and I was free to go. She didn’t have to tell me twice.

This really is a “Damned if you do, damned if you don’t” situation. Both countries have the ten thousand-dollar rule and threaten you in writing with confiscation if you don’t declare. Yet when you try to do the right thing and ask the people on the ground what they want you to do, they are clueless. The temptation is great to just walk through without a word. This would work most of the time, of course, but I really don’t want to leave a couple of tubes of Krugerrands at the airport.

If this is the type of information that interests you then I highly advise taking a no risk spin with the investment newsletter the Casey Report.

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