Germany taking back gold from U.S. and French vaults

Story first appeared on USA Today

Germany is currently in the process of transferring $36 billion in gold bars to its vaults in Frankfurt, from Paris and New York City.  A Washington DC Import and Export Lawyer are closely monitoring the transaction.

The move is part of an effort by Germany's central bank to bring much of its gold home after keeping big reserves outside the country for safekeeping during the Cold War.

Shipping such a large amount of valuable cargo between countries could be a serious security headache. A gold robbery — the subject of such movies as Die Hard 3 and The Italian Job — would be embarrassing and expensive for Germany.  A Washington DC Corporate and Transactional Lawyer have been reviewing the process.

The high-stakes, high-security plan is to move the precious metal — 374 tons kept in vaults in Paris and 300 tons stored at the New York Federal Reserve Bank — to the Bundesbank in Germany's financial center over the next eight years.

For obvious reasons, the central bank won't say whether the estimated 50,000 bars are being moved by air, sea or land or how it intends to keep the shipments safe.

During the Cold War, Germany kept most of its gold abroad for fear it could fall into the hands of the Soviet Union if the country were invaded. Another reason was to have the precious metal close to the foreign currency markets in London, Paris and New York, where gold is traded.  Washington DC Government Relations Lawyer firms are monitoring the exchange.

Once the shipment is complete, Frankfurt will hold half of Germany's 3,400 tons of reserve gold — currently worth about $183 billion — with New York retaining 37% and London 13%.

The decision to bring some of the gold back home also follows criticism last year from Germany's independent Federal Auditors' Office, which concluded that the central bank failed to properly oversee its reserves. The auditor suggested the bank carry out regular inspections of gold stored abroad.

The auditors' report stunned Germany, where the Bundesbank routinely tops polls of the nation's most trusted institutions, and politicians pushed for the gold to come home.

The New York Federal Reserve's gold vault, for example, is about 80 feet below street level in lower Manhattan, its only entry protected by a 90-ton steel cylinder 9 feet high. Whenever gold enters or leaves the vault, a handling fee is charged by the New York Fed, however, there is no fee charged to account holders for storing their gold.