Block · Capital controls
Gold import and export bans, licences, quotas and punitive duties
- What it is
- Prohibit or license gold imports and exports, tie imports to re-export, load them with cash-margin or duty requirements, or close gold markets to stop money leaving the currency for gold.
- Why it counts
- Cutting savers' access to physical gold (or its price in local money) keeps savings in domestic financial claims and conserves foreign-exchange reserves.
When it was in force
- United States: 1934 → 1974, historical; its end is not documented
- United Kingdom: 1968, historical; its end is not documented
- India: 2013, historical; its end is not documented
- India: 2013, historical; its end is not documented
4 examples
United States
1934 → 1974HistoricalIts end is not documented · As cited: 30 January 1934 - 31 December 1974 (end per Pub. L. 93-373)
Gold could be imported, exported or earmarked only under Treasury regulations and licences.
United States today: index 42.9Gold Reserve Act of 30 January 1934, section 3Primary source
“Gold in any form may be acquired, transported, melted or treated, imported, exported, or earmarked or held in custody for foreign or domestic account (except on behalf of the United States) only to the extent permitted by”
United Kingdom
1968HistoricalIts end is not documented · As cited: 15-17 March 1968 (two-tier market from late March 1968)
London gold market closed on 15 March 1968; on 17 March the gold-pool central banks decided to stop supplying gold to the London or any other gold market and to use official gold only for transfers among monetary authorities, creating separate official and private markets.
United Kingdom today: index 44.4Closure of the London gold market, 15 March 1968, and Washington gold pool statement of 17 March 1968Secondary source
“The London gold market was closed on 15 March 1968 and the governors of the central banks of countries which were active contributors to the gold pool met in Washington”
India
2013HistoricalIts end is not documented · As cited: From 4 June 2013
Gold import letters of credit only on 100 per cent cash margin and all gold imports on documents-against-payment basis, except imports for gold-jewellery exporters.
India today: index 60.6RBI A.P. (DIR Series) Circular No. 107 of 4 June 2013Primary source
“all Letters of Credit (LC) to be opened by Nominated Banks / Agencies for import of gold under all categories will be only on 100 per cent cash margin basis”
India
2013HistoricalIts end is not documented · As cited: From 14 August 2013
Gold coin and medallion imports prohibited, and at least one fifth of every lot of imported gold reserved for export (20/80 scheme), with domestic supply only against full upfront payment.
India today: index 60.6RBI A.P. (DIR Series) Circular No. 25 of 14 August 2013 (80:20 scheme)Primary source
“It shall be incumbent on all nominated banks/nominated agencies and other entities to ensure that at least one fifth, i.e., 20%, of every lot of import of gold imported to the country is exclusively made available for the purpose of exports”
Examples and their dates reviewed .
Block the exits · a special case
Gold: the exit states close first
1933United States
Executive Order 6102 required everyone in the US to deliver their gold coin, bullion and gold certificates to the Federal Reserve banks or member banks by 1 May 1933.
Compulsory surrender (confiscation) of private gold1934United States
The Gold Reserve Act ended the redemption of US currency in gold, except as Treasury regulations permit.
End of private gold convertibility1947United Kingdom
The UK Exchange Control Act obliged everyone in the UK entitled to sell gold to offer it for sale to an authorised dealer, unless the Treasury consented otherwise.
Compulsory surrender (confiscation) of private gold1971United States
President Nixon directed the Treasury to suspend the convertibility of the dollar into gold, so foreign governments could no longer exchange their dollars for gold.
End of private gold convertibility1974United States
A US law provided that from 31 December 1974 no rule could stop anyone buying, holding or selling gold, ending the US restrictions on private gold.
Gold ownership limits and licensing of dealing
More capital controls
Further reading
- Expanding the Landscape of Cross-Border Flow Restrictions: Modern Tools and Historical Perspectives
- Financial engineering is no substitute for interest rates: Lessons from Türkiye
- Argentina: Request for an Extended Arrangement Under the Extended Fund Facility—Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Argentina (IMF Country Report No. 25/95)
- The Aftermath of Debt Surges
7 more on capital controls
- Macroprudential tools, capital controls, and the trilemma: Insights from the Bretton Woods era
- Indian Financial Sector: Structure, Trends and Turns
- The Liquidation of Government Debt
- Capital control measures: A new dataset
- Financial repression: Then and now
- A New Database of Financial Reforms
- Financial Repression and Exchange Rate Management in Developing Countries: Theory and Empirical Evidence for India