Gold ownership legal, retail sales by PMR banking sector

PMR's Sberbank now offers gold from 1 gram to 500 grams (100 gram ingot shown), legal to hold as well as to import/export.

TIRASPOL (Tiraspol Times) - Citizens of Pridnestrovie can now freely own and trade gold without restriction. Individual ownership of gold and silver bullion has been legalized in Pridnestrovie, also known alternately as Transnistria or Transdniestria. The first local bank to offer precious metals for investment purposes is Pridnestrovie's Sberbank, one of eight large private banks in the new and emerging country.

Sberbank's chairman Yuri Tverdokhlib says that this is the first time a bank in Pridnestrovie is offering gold and silver, and that the bank will allow customers to purchase precious metals on installment plans. Initially, Sberbank will be offering gold ingots ranging from 1 gram to 500 grams. Later in the year, if there is demand, gold bars of 1 kg will also be for sale.

" - We advice citizens to diversify, and put some of their assets in precious metals," says Yuri Tverdokhlib. He notes that gold, as well as silver, is currently in an upwards trend, with prices already having risen more than 30% in the past year.

Gold is sold by Sberbank at the international spot price, and comes with assay certification. Commission depends on amount of the transaction, but would be less than 1%, the bank reports.

Sberbank (a contraction of the Russian words for "Savings Bank") is one of the largest banks in the Pridnestrovskaia Moldavskaia Respublica, PMR. It was founded 21 January 1993 and currently employs more than 500 people in branches throughout the length of the country.

In nearby Russia, the similarly named Sberbank is the country's largest bank, and - according to industry magazine "The Banker" (06/04) - it is also the largest bank in all of Central and Eastern Europe. The bank has approximately 20,000 branches with 230,000 employees and revenues of 8 billion USD. There is no Sberbank network in Moldova.

Economic freedom lifts gold ownership restrictions

The lifting of gold ownership restrictions is part of a series of reforms bringing Western-style economic freedom to the small and unrecognized country located in what was formerly a part of the Soviet Union. Because of gold's use as a reserve store of value, the possession of gold is sometimes restricted or banned. This is usually a feature of Communist countries, countries that are in war, or countries with low levels of individual economic freedom. Within the United States, the private possession of gold except as jewelry and coin collecting was banned between 1933 and 1975.

In the Soviet Union, gold ownership was taboo and ownership of gold or "valuta" (foreign currency) could - in the times of Stalin - be reason enough for death by firing squad.

Igor Smirnov, the current president of Pridnestrovie, remembers Stalin's terrors well: His own father was imprisoned by Stalin, and his mother was fired from her job because she was the wife of a political prisoner. Later, Igor Smirnov himself became a political prisoner: During the breakup of the Soviet Union, Moldova's authorities jailed him for his role in Pridnestrovie's 2 September 1990 independence declaration.

Although owning gold is now fully legal in Pridnestrovie, restrictions on gold ownership are still in place in Moldova. By the beginning of the 21st century¸ Communist parties hold power in China, Cuba, Laos, Moldova, North Korea, and Vietnam. President Vladimir Voronin of Moldova, a former Soviet-era general, is Europe's last Communist president, but the country is seeking to orient itself towards the West and is not run as a one-party dictatorship. Moldova's Central Bank has not indicated any willingness to follow Pridnestrovie's lead, and lift all restrictions on gold ownership.

" - But they ought to," says Rybnitsa resident Svetlana Volkova, 54. "At least restore a bit of freedom to the beleaguered Moldovan citizen by eliminating the draconian laws denying Moldovans the right to own and trade gold."

Tiraspol's move to eliminate all remaining restrictions on gold ownership brings Pridnestrovie in line with current Western policy on gold ownership. No taxation is levied on transactions, similar to the policy in the European Union where the trading of recognized gold coins and bullion products is free of VAT.

Pridnestrovie declared independence in 1990 as the Soviet Union was falling to pieces. It has its own Central Bank and produces its own currency, the PMR Ruble. Several times a year, Pridnestrovie's Central Bank also issues commemorative coins. Although most coins are silver, some gold coins have also been issued and sold for numismatic purposes. Since numismatic coins carry a premium over the price of the metal, Sberbank recommends that investors stay clear of the coins by the PMR Central Bank and instead focus on gold and silver bullion.

See also:
» Can a country legally exist if it is "self-proclaimed"..?
» After freedom and reform, Pridnestrovie says it is no longer Communist

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