On landing home recently, I had a run-in with the customs officer at the airport. A long and delayed flight followed by a lost bag had made my irritation levels overflow. Then, upon leaving the airport, the customs inspector asked me about my bags and I said “get lost”.
BIG MISTAKE.
The next thing I know is that my bags are being searched in earnest. I knew there was nothing of interest, so just stood there like a stool. But then the officer found one thing of interest. A box.
The box was a gift for my children and contained two gold coins. The gold coins came from the Royal Mint, and are commemorative coins dedicated to Harry Potter. The official smiled, and said: “what are these?” I said: “pretty obvious … they are coins”. I realised I was annoying him, but didn’t care. He then said: “OK, you owe us $1,000 for illegally importing gifts and not declaring them”.
WTF?
I argued that these were not gifts but currency and, according to their very own signs at the airport, I’m allowed to bring in currencies to the value of $10,000. His response? “These are not currencies. They are gifts that are in excess of our import control of $1,500. You are fined $1,000 (of which $800 was for not declaring the coins).”
WTF???
The discussion continued and, bottom-line, a gold coin is not a currency claimed the customs officer.
I guess there is an argument there. Could I walk into Wal*Mart or Lidl and present a gold coin at checkout expecting $1,473 of change? Could you go and get your hair done and pay with a gold coin? Yet, surely the fact that a gold coin is a coin makes it a valid currency?
Well, it turns out that gold coins are not currency at all. It’s bullion and, for customs purposes, considered to be in the category of excess import value:
When you are travelling with gold coins, you should note that the customs charges are calculated based on the true value of the coin, not the legal tender face value. This is because these coins are not circulated currency, they are gold bullion.
A lesson learned which, to be clear, is that gold is not a currency, even if it is a coin ... it is an asset.
Postscript: asking whether gold is a currency or an asset is very similar to asking whether bitcoin is a currency or an asset #justsaying
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...
