Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Stock Review : Markets : News Wire : Quotes : Radio : Silver : Stocks - Main 
  
 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeekMint.com Grand Opening! - Silver and Gold Direct from the Mint!
By: GoldSeek.com

The Gold Series: 2014 Trends and Beyond (PART 5 of 5)
By: Visual Capitalist

Clear and Present Danger Zone
By: GE Christenson

Useful Idiots and the Something For Nothing Society - Part 1 of 3
By: Theodore (Ty) Andros

Instability the New Normal?
By: Axel Merk

Legal Tender Renders Planning Impossible
By: Keith Weiner

Gold & Silver Market Morning
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch

EU Bail-Ins - Retrospective Bail-In Ignoring State Guarantee
By: GoldCore

Asian Metals Market Update
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver End Slightly Lower
By: Chris Mullen, Gold-Seeker.com

 
Search

GoldSeek Web

 
Treasury Claims Power to Seize Gold & Silver -- and everything else

By: Chris Powell, Gold Anti-Trust Action Committee Inc.


-- August 20, 2005


Dear Friend of GATA and Gold:

The U.S. Government has the authority to prohibit the private
possession of gold and silver coin and bullion by U.S. citizens
during wartime, and, during wartime and declared emergencies, to
freeze their ownership of shares of mining companies, the Treasury
Department has told the Gold Anti-Trust Action Committee.

But gold and silver advocates shouldn't feel too picked on. For the
U.S. Government claims the authority in declared emergencies to
seize or freeze just about everything else that might be considered
a financial instrument.

The Treasury Department's assertions came in a letter dated August
12 and written by Sean M. Thornton, chief counsel for the
department's Office of Foreign Assets Control, who replied to
questions GATA posed to the department in January. It took GATA six
months and a little prodding to get answers from the Treasury, but
the Treasury's reply, when it came, was remarkably comprehensive and
candid.

The government's authority to interfere with the ownership of gold,
silver, and mining shares arises, Thornton wrote, from the Trading
With the Enemy Act, which became law in 1917 during World War I and
applies during declared wars, and from 1977's International
Emergency Economic Powers Act, which can be applied without declared
wars.

While the Trading With the Enemy Act authorizes the government to
interfere with the ownership of gold and silver particularly, it
also applies to all forms of currency and all securities. So the
Treasury official stressed that it could be applied not just to
shares of gold and silver mining companies but to the shares of all
companies in which there is a foreign ownership interest. Further,
there is no requirement in the law that the targets of the
government's interference must have some connection to the declared
enemies of the United States, or, really, some connection to foreign
ownership. Anything that can be construed as a financial instrument,
no matter how innocently it has been used, is subject to seizure
under the Trading With the Enemy Act and the International Emergency
Economic Powers Act.

Having just gone through a controversy about a Supreme Court
decision about government's power of eminent domain, most Americans
may be surprised to learn that the Trading With the Enemy Act and
the International Emergency Economic Powers Act could expropriate
them instantly and far more broadly without any of the due process
extended to parties in eminent domain cases. All that is needed is a
presidential proclamation of an emergency of some kind -- and of
course Americans lately have been living in a state of perpetual
emergency.

When the Trading With the Enemy Act was passed in 1917, gold and
silver formed part of the official currency of the United States and
were essential to ordinary commerce, so perhaps an argument could be
made then against "hoarding," even if "hoarding" could not be well
defined. That is no longer the case; the United States has
officially disavowed gold and silver as money and they no longer
have a meaningful role in commerce. (GATA is working on that.) So
gold and silver investors may want to ask their members of Congress
to seek repeal of the statutes that give the government the
authority to interfere with the private ownership of gold and
silver, emergencies or not.

And ordinary citizens with no particular interest in gold and silver
may want to ask their members of Congress to reconsider these
statutes simply for being wildly tyrannical.

GATA's correspondence with the Treasury Department is appended.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

January 20, 2005

Roberta K. McInerney
Assistant General Counsel / Banking and Finance
Department of the Treasury
Washington, D.C. 20220

Dear Ms. Mclnerney:

Michael Kirk of U.S. Rep. John B. Larson's office has forwarded to
me your letter to him of December 17, which answered my e-mailed
inquiry to him about forcible redemption by the Treasury Department
of gold and silver coins held by private citizens. You replied that
a statute empowering the Treasury Department to do that, 12 U.S.C.
Section 248(n), had been repealed.

But since reading your letter I have learned of a similar statute:
Title 12. Chapter 2, Subchapter IV, Section 95a, which provides in
part:

"During the time of war, the president may, through any agency that
he may designate, and under such rules and regulations as he may
prescribe, by means of instructions, licenses, or otherwise -- (A)
investigate, regulate, or prohibit any transactions in foreign
exchange, transfers of credit or payments between, by, through, or
to any banking institution, and the importing, exporting, hoarding,
melting, or earmarking of gold or silver coin or bullion, currency
or securities. ..."

Section 95a further authorizes the president to "prevent" the "use"
by U.S. citizens of "any property in which a foreign country or a
national thereof has any interest."

These provisions are of the greatest concern to investors in gold
and silver bullion, coins, and shares of gold and silver mining
companies, and to those companies themselves. So the Gold Anti-Trust
Action Committee urgently requests that the Treasury Department
explain how it construes these provisions. Particularly, we'd like
to know:

* How does the Treasury Department construe "the time of war"? How
can gold and silver investors know when the powers described in
Section 95a are in operation or likely to come into operation? Are
formal declarations of war by Congress required here, or lesser
declarations, or none at all, but rather declarations made only by
the president?

* How does the Treasury Department construe "hoarding"? Does it
include the ordinary collection of gold and silver coins, numismatic
or not, and bullion by U.S. citizens, businesses, and corporations,
absent any collaboration with enemies of the United States?

* Does the Treasury Department construe Section 95a to empower the
president to interfere with the ownership of shares in gold and
silver mining companies merely because shares of such companies also
might be owned by foreign nationals or foreign governments, at war
with the United States or not? Under what circumstances would the
president be so empowered?

In essence, we need to know whether Section 95a contemplates the
instant destruction of gold and silver investors and the precious
metals mining industry in the United States. So the Gold Anti-Trust
Action Committee asks the Treasury Department for a meeting with the
officials who might become responsible for implementing Section 95a,
at which we might discuss the concerns of precious metals investors
and mining companies. Would you kindly forward our request to the
appropriate people?

Thanks for your help.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

February 28, 2005

Mr. Chris Powell
Gold Anti-Trust Action Committee Inc.
Manchester, Connecticut

Dear Mr. Powell:

Thank you for your follow up letter dated January 20, 2005,
requesting information about how the Treasury Department interprets
aspects of Title 12, Section 95a, of the U.S. Code.

Most of the questions you raise fall within the jurisdiction of
Treasury's Office of Foreign Assets Control (OFAC). Consequently, I
wanted to let you know that I have forwarded your letter to OFAC's
Office of the Chief Counsel for a response. The chief counsel's
office will ensure that you receive a response to your letter.

If you have questions about the status of your request, please call
Mark Monborne, OFAC's acting chief counsel.

Thank you for taking the time to write.

Sincerely,

Roberta K. McInerney
Assistant General Counsel (Banking and Finance)
U.S. Department of the Treasury
Washington, D.C. 20220

* * *

August 12, 2005

Mr. Chris Powell
Gold Anti-Trust Action Committee Inc.
Manchester, Connecticut

Dear Mr. Powell:

Your letters to Roberta McInerney, assistant general counsel
(banking and finance), dated January 20 and July 17, 2005, have been
forwarded to me for response. I recently became the chief counsel
(foreign assets control).

The U.S. Code provision that you reference, 12 U.S.C. Sec. 95a, is a
duplicate codification of Section 5 of the Trading with the Enemy
Act of 1917, 50 U.S.C. App. Secs. 1-44 ("TWEA"), with respect to
which my office bears responsibility for interpreting.

As you may be aware, Congress enacted TWEA during World War I to
prevent certain transactions that might be of advantage to an enemy
during wartime. During World War II the Treasury Department
implemented extensive punitive blockings of Axis assets and
protective blockings of Allied assets.

In 1950 the United States imposed economic sanctions against the
People's Republic of China as a result of the Korean emergency to
prevent, among other things, Chinese acquisition of foreign exchange
through transactions with Americans. The Department of the
Treasury's Office of Foreign Assets Control ("OFAC") began enforcing
foreign asset control programs in the 1950s. Today the only economic
sanctions programs administered by OFAC under TWEA are with respect
to Cuba, North Korea, and certain third-country transfers of
sensitive materials.

You have asked how the Treasury Department construes the term "the
time of war," which appears in section 5 (b) (1) of TWEA. Although
TWEA does not include a definition of the term "during the time of
war," it does include definitions for the terms "the beginning of
the war" and "end of the war." The words "the beginning of the war"
are deemed to mean "midnight ending the day on which Congress has
declared or shall declare war or the existence of a state of war."
The words "end of the war" are deemed to mean "the date of
proclamation of exchange of ratifications of the treaty of peace,
unless the president shall, by proclamation, declare a prior date."

Thus the phrase "during the time of war" would seem to cover the
period between "the beginning of the war" and the "end of the war."

Since this period cannot come into existence without some form of
congressional declaration, it would appear that TWEA -- with the
exception of its present applicability to the Cuba, North Korea, and
transaction control programs referenced above* -- applies only to
situations involving a declared state of war. In exercising any of
the specific powers available to him under TWEA during the time of
war, the president would issue an executive order or other similar
instrument generally made available through publication in the
Federal Register.

(* -- From the early 1930s until 1977, when the International
Emergency Economic Powers Act was enacted, TWEA applied not only in
times of war but also in situations in which the president declared
a peacetime national emergency. Pre-existing emergencies declared
with respect to Cuba and North Korea and certain transaction
controls were grandfathered, which explains why TWEA still serves as
the basis for those sanctions programs, even though the United
States is presently not in a state of war with respect to any of the
affected countries.)

The construction of the term "hoarding," as used in section 5(b)(1)
of TWEA, would depend on how the president chooses to exercise his
authority with respect to hoarding in any particular instance.

In making any decisions under the authorities conferred by TWEA, the
president would, of course, be taking steps to address threats to
our national security during a time of war. In the past, the
president has used TWEA or TWEA-like authorities to criminalize
hoarding. See generally Bauer v. United States, 244 F.2d 794 (9th
Cir. 1957). Today, however, such activity is not restricted under
the only sanctions programs in effect pursuant to TWEA -- i.e., the
Cuba, North Korea, and transactions-control programs.

If, during a time of war, the president expressly chose to restrict
the hoarding of gold or silver, he could do so.

Among the many factors the president would likely consider before
taking such action, however, is the fact that the U.S. Government
now mints and issues gold and silver coins to meet public demand for
both numismatic and investment purposes.

(See 31 U.S.C. 5112(a)(7)-(10) & (e)-(i).)

You also have asked about the president's ability to "interfere with
the ownership of shares in gold and silver mining companies merely
because shares of such companies also might be owned by foreign
nationals or foreign governments, at war with the United States or
not."

Under TWEA during times of war -- and also under the International
Emergency Economic Powers Act, 50 U.S.C. Secs. 1701-05 ("IEEPA")
during peacetime national emergencies -- the president has broad
powers to regulate property in which there exists a foreign
interest. See TWEA 5(b)(1)(B); IEEPA Secs. 1702 (a) (1) (B).

Consequently, the president may restrict shares in any company owned
by foreign persons consistent with the purposes of any declared
emergency.

In this respect, foreign-owned shares in gold and silver mining
companies are no different from foreign-owned shares in companies in
any other industry.

Finally, you raise concerns about the "instant destruction of gold
and silver investors and the precious metals mining industry in the
United States." In the establishment and implementation of
sanctions, the U.S. Government is always mindful of the domestic
impact of restrictions meant to serve national security and foreign
policy purposes. Just as the U.S. Government has been mindful of the
practical impact that sanctions have on various service and
manufacturing industries, it would also be mindful of the potential
impact of sanctions with respect to the markets and industries
associated with precious metals.

I hope you find this letter instructive. Thank you for your
interest. If I can be of any further assistance, please call me.

Sincerely,

Sean M. Thornton
Chief Counsel (Foreign Assets Control)
U.S. Department of the Treasury
Washington, D.C. 20220


-- Posted Sunday, 21 August 2005




 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2014


© GoldSeek.com, Gold Seek LLC


GoldSeek.com Supports Kiva.org

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.
OilSeek.com