06 July 2009

AUSTRAC Identification Rules

Further to my post on AUSTRAC rules on identification for bullion transactions, I can report that the Perth Mint has just received an approval to set the limit above which some form of identification for a bullion transaction is required from $2,000 to $5,000. This now gives some more room for people to privately acquire gold and silver.

Looking at page 11 of the Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2009 (No. 2), it appears this approval is for every bullion dealer, not just the Perth Mint. If you are having problems with bullion dealers wanting to ID you for deals under $5,000, maybe handy to show them this Amendment Instrument.


  1. Bron, nothing to do with AUSTRAC, but in your Perth Mint work, do you have access to real gold interest rates, not just the derived ones on LBMA?

    I'm thinking that the key to the mystery may be there. Maybe even that lease rates are different depending on the currency involved. If not the raw rate then maybe through the exchange of one currency for another?

  2. Yes, the LBMA ones are really just indicative. Unfortunately, because of all the metal from Depository clients, the Perth Mint has no need to lease in gold for its own operations. We occassionaly lease in on behalf of AGR Matthey, and I've looked at these "real" rates because I thought the same as you, but the deals are so infrequent that I cannot derive any useful lease rate curves over time.

    You are also correct that the rates will differ, primarily to do with counterparty risk. Just as banks charge different interest rates to borrowers of cash, same applies to borrowing gold.

    Lease rates should not be influenced by currency, as you are borrowing in the currency gold. Currency will affect the forward price for gold though, in that currency.

  3. sorry, didn't explain myself properly. I was thinking that when lending or borrowing gold 'on a swap' for AUD, the gold interest rate would be different than for USD, even if the exchange was first AUD for USD, then USD for gold.

    This might explain why the AUD gold price rose, while the USD gold price went lower (and now is about where it was 12 months ago) even though interest rates in both currencies fell considerably. In fact USD rates fell further.

  4. Yes, AUD forward rates would be higher, but hard to say if this is a dominant factor in AUD gold price, so many other factors affecting USD/AUD exchange rate that could play a part as well.

  5. Bron,

    Keep up the good work, I come here regularly and get great information.

    Topic 1: Given that this site is a unique and insightful source of information about the potential for Australian gold confiscation, could you please comment on the following:
    I have been acquiring Perth Mint silver and gold in the depository scheme and am concerned about confiscation issues in the long term. Probably it will not happen, but again given the mindlessness of recent policy decisions there is no reason why the Australian government could not just decide to tax the gains at a punitive level – ‘because people are making unfair gains from it’ or some other vacuous reason. Seems to me the main risk is not holding bullion, but also the 'privacy risk' if you want to call it that, that the government knows that you've got it and can therefore either tax it highly or confiscate it. Are you able to make comment about how best to acquire completely private gold and silver (Ie no record of the sale therefore no one knows you’ve got it and therefore can’t confiscate it), in quantities of up to 100 oz?

    Topic 2:
    No-one seems to be able to give a clear answer due to the sorry state of knowledge about PM’s in Australia but seeing as you work for the Mint, are an accountant, and want to make this site a source of information for Australian gold investing, are you able to make some comment about the capital gains treatment of gold bullion in Australia? Are there any precedent cases in tax law? In particular, is the conversion of unallocated to allocated considered a capital gains event? I know that you are not able to give investment advice but perhaps you could give some hypothetical situations or similar.