BullionVault is regulated under English Law.
Regulatory responsibility rests on three mutually independent arms of law enforcement: (i) the investigating authority, (ii) the prosecuting authority and (iii) the Criminal Courts.
- The investigating authority is the London Metropolitan Police Force. It is independently funded out of civil taxation and its role is to investigate reports of crimes and to produce a report for the prosecuting authority. Theft and Fraud fall under its areas of responsibility.
- The prosecuting authority is the UK Crown Prosecution Service. It is independently funded out of civil taxation and its role is to prosecute breaches of statute law where evidence gathered by the investigating authority produces a reasonable prospect of conviction.
- The Criminal Court system hears the cases of the prosecuting authority, establishes guilt or innocence through the jury system, and empowers judges to punish. It too is independently funded out of civil taxation.
Bringing a criminal case is not something you would have to do yourself. You would report - for example - a theft, and the investigation and prosecution is the duty of these civil bodies.
In addition you have recourse to the civil law, which would rule on trade disputes between you and us if, for example, you were to allege that we were acting in breach of our stated Terms and Conditions - which form the basis of the business arrangement between us. Bringing a case under civil law would ordinarily incur costs for you.
You should understand that, together with the whole of the London Gold Bullion Market, BullionVault's regulatory status is markedly different from the financial services industry in general.
Modern financial services businesses throughout Europe and America tend to be companies which deal in paper based instruments generally called 'securities', and these are subject to increasing legal sophistication.
As a result of growing complexity too many instances of loss to investors have occurred, where victims have been told that the cause of their loss was regrettable management error, not dishonesty. Yet frequently the managers responsible are insured against personal lapses and many of those responsible for costly error have actually received substantial sums of money on the termination of their employment, while investors have suffered losses.
Meanwhile the effectiveness of straightforward property law has continued to enjoy the full power of the state to identify, prosecute and punish people who steal and defraud.
Because it concerns the absolute ownership of physical metal, and not paper based contractual rights traded as securities, physical bullion trading is deemed simple enough to fall outside the defined scope of formal financial services regulation. Consequently the London Gold Bullion market - which is the biggest in the world - is not regulated by the Financial Services Authority, but by traditional English property law, under codes of practice defined by the London Bullion Market Association [LBMA].
The LBMA, of which BullionVault is the only full member dedicated to retail investment, therefore defines the standards and practices of good commercial behaviour for the entire London Bullion Market. These have maintained such a high degree of trustworthiness and reliability that the LBMA continues to specify the standards for bullion trading around the world. The significant majority of bullion trades executed even in New York are - in fact - traded on the LBMA's 'loco London' terms. This means that deals will be settled in bars obeying LBMA specifications, and that they will pass from the seller's LBMA member vault to the buyer's LBMA member vault, via specialist LBMA member couriers.
We believe this offers a regulatory environment better understood by our customers than is the formally regulated securities industry. BullionVault customers own their gold, and not a piece of paper evidencing an entitlement under a trust, or a liability on a corporate balance sheet. The property rights customers enjoy are simpler, better established, and less subject to change than modern securities law.
Although it is not regulated by the Financial Services Authority BullionVault adopts many of the duties which have been applied by FSA to businesses which have responsibilities for other, less tangible, stores of private wealth. These include:-
- the segregation of customer property to be held independent of a company's finances
- the keeping of accurate records and the availability of those records for inspection
- the declaration of a conflict of interest when acting as principal in a transaction
- accountability to written Terms of Business
- adherence to a specified complaints procedure
- maintenance of a compensation fund
BullionVault is a rigorous adopter of these good practices and seeks to maintain an environment where its compliance with these principles is visible and proven.
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You may contact our Customer Support team to help resolve any issue you encounter. If you are unable to resolve the issue, you may decide to make a complaint
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BullionVault maintains a compensation fund out of its commission and contributes at a rate of 10% per commission charged, to a maximum of 10 cents per order. The value of the compensation fund is currently capped at $4m which is a total maintained under review. The independent council for adjudicating on formal complaints has the exclusive power to distribute benefits from this fund.
Currently there is no reporting of your BullionVault business while your gold is maintained within a professional market vault in the normal BullionVault way. Wherever you live your trading activity and gold ownership are not reported to any authorities, anywhere in the world.
Nevertheless there are some issues you should understand.
- BullionVault will willingly co-operate with international investigations into money laundering activity where investigation is being undertaken by the authorised agents of respected international governments. Were you under investigation by these authorities it is unlikely that we would inform you.
Money laundering lacks a universal definition, although generally speaking it refers to the legitimization of the proceeds of serious crime. All BullionVault jurisdictions include in this definition crimes generally recognized as repugnant - for example, terrorism, drugs and violence. We assume you will already know if your government is likely to investigate you for money laundering, and if it is your money will not be safe at BullionVault.
For lesser 'crimes' interpretations differ across authorities. Click here for more about Swiss attitudes to these.
- Although we know of nothing specific it is conceivable that the jurisdictions under which BullionVault operates might change their current reporting requirements. It is likely that such a change would be debated openly before being implemented. Where this occurs, and provided we are not prevented from doing so, we would advise you of any likely change by email and/or through the BullionVault web-site.
We would also lobby against new and illiberal regulations and seek to migrate customers to a storage location which continues to defend confidentiality. In this regard it is important that our system already offers multiple vault jurisdictions.
- It would - of course - be exceptionally unwise of you to consider BullionVault as a useful mechanism for trying to avoid legitimate taxes. In the jurisdictions in which BullionVault operates taxes are a democratically mandated imposition, and in illegally avoiding them you become an offender liable to conviction and punishment. The powers of all governments relating to tax are very wide ranging.
That said, there are times when it is clear that governments themselves are the real offenders - for example when they entrap and impoverish entire ethnic or religious groups by domestic asset confiscation. Where a government does such a thing then BullionVault gold held safely abroad would be exceptionally good protection, and provided the host jurisdiction for storage continues to support confidentiality, then so will BullionVault.
In selecting our vaulting locations we have tried to provide you a choice of jurisdictions considered relatively unlikely to descend into dangerous degrees of totalitarianism.
- As a British business BullionVault is subject to British law. The situation for British users of BullionVault is typically eccentric.
Current legislation requires that where gold is physically delivered to British citizens in a sum exceeding £5,000 in one transaction (or aggregating £10,000 in a full year) then a report must be filed with HM Revenue and Custom's 'Gold Team'.
But the Gold Team no longer exists, so although the legislation remains there is no practical way of obeying it. In any event BullionVault does not routinely make physical delivery into the hands of its users (although users are entitled).
The nature of BullionVault's business and the fact that BullionVault retains all records of transactions has been notified to HMRC in writing and acknowledged by them. For the time being no-one at HMRC is seeking or receiving any reports of BullionVault trading or holdings.
- BullionVault is obliged to treat as higher risk any account for which the user refuses to validate his/her identity. To maximise your privacy you must quickly validate your account.
Do not place the proceeds of crime in a BullionVault account. Do not attempt to launder them through a BullionVault account (which the linked bank account would render unworkable anyway). BullionVault is committed to keeping crime out of the professional bullion markets.
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