mtwilson wrote:My hope is to cut through myth and rumor and look at ways that are actually practical and possible if one is interested in purchasing physical metals and holding, buying and selling investment gold and silver in Peru.
I'll tell you what I know as best I can. Caveat: I may be wrong about some of these things.
mtwilson wrote:My early indications are that this is surprisingly difficult, especially considering Peru's role in global silver and gold production.
Yes, there is very little precious metal available in Peru in spite of it being a world class source. The major Peruvian producers export all their metals in the form of concentrates to be refined in England, Switzerland or Asia. This is due to the tax system. The producers can credit all their production costs for exports against the IVA. However, if they refine and sell it in Peru they lose this deduction.
For example. Southern Copper produces some (small potatoes compared to Yanacocha but a lot more than any of us could afford!) highly refined silver and gold as a byproduct. However, they absolutely refuse to sell any of it in Peru.
What little precious metals are available in Peru comes from scrap and small miners. Now days there is almost no refinery capacity in Peru (when I was a child there were major refineries in Peru).
The absurdity of this is illustrated by the fact that Peru has some very large jewelry producers who require more silver than is possible to source in Peru. So they have to import silver into Peru and pay import taxes on it! Importing silver to Peru is akin to Eskimos importing ice.
mtwilson wrote:As a side note; one of my PM dealers said that they no longer ship PM's to Peru after two insured shipments were flat out stolen by the shipping company (I assume serpost, but it could have been DHL or FedEx).
I would never have tried that for fear of exactly that result. However, it is interesting to have information about a first hand test.
mtwilson wrote:So, in consideration of the above, does anyone have experience with actually bringing PM's into the country and if so, what was the experience like? I understand there is a difference between importing minted monetary coins (eagles, maples, etc) and bullion and how they are taxed but I don't know the severity of the differences and, of course, how a real world scenario would play out. For instance, does a silver maple get taxed on it's 5 dollar face value or on current market value? Do customs authorities even understand the difference?
I smuggled in 40 silver rounds once. I know a fellow who did the same with a couple of gold coins. It is possible to sell them downtown but almost impossible to get a decent price.
As to the legal situation ...
Inside the country, silver is subject to IVA. That makes it prohibitive to deal in silver legally. However, it is possible to buy (crude) silver bullion downtown for cash (caveat emptor). On the other hand, raw gold (oro bruto
) is exempt from the IVA. However, alloyed or worked gold (unless it is legal tender) is subject to the IVA.
All money imported into Peru is subject to a 9% excise tax. However, paper currency has been exempted from this tax. That leaves it applicable to coins and gold and silver. In addition, silver and gold that is not pure or legal tender is subject to 18% IVA upon import. A 27% net tax is absolutely prohibitive. Even a 9% tax is prohibitive.
I doubt very much that the customs people would know these laws or have any idea what to do about precious metals (except, perhaps, to steal them). I have thought of bringing in a gold coin next time and declaring it just to see what happens.
mtwilson wrote:... is it possible to open an account with a Peruvian bank that would accept deposits in a basket of currencies (dollars, euros, yen, yuan, etc.)?
As far as I know, only dollar, euro and sol accounts exist. But I would not be surprised if a Chinese bank appeared in the near future that offered yuan.
mtwilson wrote:Lastly, if no real options currently exist, would it be possible for a consortium of PM investors to start up a local exchange/dealership?
Great idea. Peruvians need such a business to enable them to protect themselve from the collapse of the dollar. There are a lot of things that could be done but they all require capital. [For example, as far as I have been able to find, there are no private, non-bank vaulting facilities in Peru. It even appears that bank safety deposit boxes are nearly impossible to find anymore.]
This is possible: in Lima you can buy pure gold in small quantities from a reputable source at an excellent price, barely 1% over international spot. Silver is 19% over spot due to the IVA. PM me if you are interested in the details.