Why the hell would you auction gold bars?

EIGHT gold bars which were seized by HM Revenue and Customs (HMRC) from a suspected criminal at Manchester Airport went under the hammer today for almost £780,000 in a first of its kind auction.

There’s a known price and a liquid market. Why use an auction, which is a form of price discovery? An expensive form of price discovery too?

12 thoughts on “Why the hell would you auction gold bars?”

  1. It’s a generic rule: all goods seized must be sold at auction, to guarantee a fair price. Otherwise the coppers would sell stuff to their mates at far below market value.

  2. Having previously bought bullion on eBay I suspect they may have got more than spot price due to people caught up in the moment, and on an endorphin rush to win the prize overbidding on their actual value.

  3. Kruger rand. No-nonsense, no numismatic value so the premium is the tiniest possible, some copper added so it looks a lovely reddish colour, unlike say a Philhamonic. In Rosebank shopping mall there is a small but fancy coin shop, highly recommend it, they have some lovely Mandela gold pieces, for a premium of course, if one likes that sort of thing.

    My biggest investment regret is not buying Mandela’s signed drawings/prints in the early 00’s when they were being sold for a song, £800-2000 a piece, the first batch. Shoulda woulda coulda, I blame my wife who forbid me. Another smaller regret is in 2013-2014 not going more heavily into bitcoin. I’ve always battled against being risk-averse as “lottery tickets” favourable risk return ratios have their place.

  4. Gamecock has had owning a gold brick on his bucket list since childhood. At £100,000, that one isn’t going to happen.

  5. I’d be concerned that they were seized from a *suspected criminal* and then sold while he was still suspected?

    But we do that over here and we learned that from you DAD! WE LEARNED IT FROM YOU!

  6. Hmm,

    Okay, so we actually have three different things going on here.

    1. Seizure of undeclared (or misdeclared) goods on arrival in the UK (or removal from a bonded or similar facility).
    2. Subsequent sale by auction of seized goods.
    3. Only being being called a “suspected criminal” until a successful prosecution under s50 Customs and Excise Management Act 1979 (or other, or additional offences.)

    I have no information on points 1 & 3, other than the article. And, I’m not going to make any guesses about point 1, except to disagree slightly with Roué that 16kg is easily carried in a small backpack (day or 3-day sized) if it’s dense enough rather than clothes. I have to get 15kg in to mine for fitness testing – plastic bottles full of water seem to be a common choice of burden. And I don’t own anything like that amount of gold. Also would probably be quite uncomfortable and you’d need to pick the boarding (and any transit) airport quite carefully.

    If the victim of the seizure wanted the goods back (subject to them being in HMRC rather than police custody – as they were auctioned, I assume the former), you can follow any of the three routes under the Notice 12A process. You can dob yourself in, agree that the seizure was legal (xmt route 3), pay the duty, VAT and any penalties, within 45 days and get the goods back, or monetary compensation if they’ve already been disposed of (restoration). HMRC will generally oppose this “where there has been an attempt to evade any duty” – in this case, around £150,000 of VAT – but this can eventually go to Tribunal so you are not stuck with HMRC declaring their own perfection in following their own rules.

    You can challenge the legality of the seizure, which is a civil court case, within 30 days (condemnation).

    Or you can do both at the same time. For 3/4 million quid in value, or more, you’d expect that something would have been done in the almost 2 years since seizure, unless there’s quite a lot we aren’t hearing about this.

    (Just a pendantic note – the bars in the photo don’t exactly appear to be of mint-grade production. This might be a sensible reason for auction “as seen”, as well as the ‘it’s the usual process to prevent law enforcement corruption’, as per Andrew M’s post.)

    Why no completed prosecution? A couple of guesses here. Either that it’s taking forever because of the boost to the well-known efficiency of the UK criminal justice system from COVID lockdown, or they caught a courier and, because the importation would have been legal if declared and paid, they’ve decided not to bother.

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