An article in a Mexican newspaper reports that Mexican federal police seized more than 150 gold coins from a traveler in the Mexico City International Airport. The seizure apparently occurred last year; the article is dated April 19, 2010.
The traveler, a U.S. citizen, was on his way to Panama when police detained him. The article doesn’t specify the legal rationale for the seizure. However, Mexican law requires a customs declaration of cash or cash equivalents entering or leaving Mexico with a value exceeding $10,000. The traveler evidently failed to make this declaration. Police also said the traveler was “evidently nervous” when they approached him.
Mexican federal police routinely examine the carry-on luggage of outgoing international passengers to destinations south of Mexico (e.g., Panama). This is apparently how they found the coins. Carry-on luggage on even some domestic flights is scrutinized, as my colleague P.T. Freeman explained in a blog entry last year.
The article also doesn’t describe what coins police seized, except that they were manufactured in the United States and South Africa. This implies the coins were U.S. eagles and South African Krugerrands. In the photo accompanying the article, all the coins appear to be one ounce in size.
We also don’t know where the traveler began his flight to Panama. If his flight originated in the United States, there would be no apparent reason to transit Mexico. There are direct flights to Panama from Houston, Miami, and other U.S. cities. It’s possible that the traveler simply walked across the border at one of the numerous U.S.-Mexico entry points, and then booked a flight to Panama through Mexico City at the nearest airport.
Entering Mexico this way generally avoids any outbound inspection by U.S. customs, or inbound inspection by Mexican customs. Authorities in both countries have the right to inspect the bags of a pedestrian entering Mexico from the United States, but usually don’t bother.
Even absent an outbound customs inspection, the traveler would still have been required to file Census Bureau Form 7525-V, since the market value of the metals exceeded $2,500. He probably wouldn’t be required to file Treasury Form 105, because the legal tender value of the coins apparently didn’t exceed $10,000. Failure to file these forms, when required, can lead to confiscation of the reportable goods, along with possible fines and even imprisonment.
Moving money internationally is serious business, especially if you’re transporting cash, gold or other valuable items yourself. You need to educate yourself on the rules that apply and the traps into which you might run. T traveler failed to heed this advice, and it cost him $200,000. (If he had read P. T. Freeman’s blog entry, he would have known better!)
Have you moved gold or other precious metals into Mexico or Panama? What were your experiences? Please comment below.
Postscript: The traveler was able to recover his coins in 2011, after spending three weeks in a Mexican jail and spending nearly $50,000 in legal fees. A Mexican appellate court concluded that he had not violated Mexican law in transporting the coins without declaring them to customs authorities, because their legal tender value was under $10,000.
Copyright (c) 2011 by Mark Nestmann
(An earlier version of this post was published by The Sovereign Society, http://www.sovereignsociety.com)
Update: Export shipments that previously required a paper Shippers Export Declaration (SED) must now be filed electronically to the Automated Export System. For more information, see http://www.aesdirect.gov/.