What is Allocated and Segregated Vault Storage?


What is segregated vault storage? 

Segregate – (v) to separate or set apart from others of the general mass, to isolate or divide. 

Segregated Vault Storage – (n) type of vault account where one’s holdings are separate, excluded, and apart from others. 

Swissmetal Inc. stores the clients’ metal assets physically in Bank Security Level 1 (the highest) vaults. We offer two highly secure vaults with storage facilities within Duty Free Zones, located in Zurich, Switzerland (refer Photograph 1 above) and Panama City, Panama which can be viewed at any time by the metal owner.

After purchasing a metal basket, the client will receive a Certificate of Ownership. The Certificate will have an account number and storage number. The storage number is the tracking link for all the movements of your metals until they are stored in our bonded customs warehouse, (refer Photograph 2 above). Ownership of the account number is information that is not public and strictly protected providing Swissmetal Inc. clients with the highest level of anonymity.

The client can visit the vault at any time and view their metals with a customs escort. They need their Certificate of Ownership and passport and as long as the metals are not physically removed from the Duty Free Zone, they are not subject to customs duties or sales tax. (refer Photograph 3 above)

In future times if you decide to sell your ‘baskets’ with Swissmetal Inc., we resell the metals within the Duty Free Zones in either Zurich, Switzerland or Panama City, Panama and therefore you will not be subject to customs duties or sales tax

Fully segregated vault storage is convenient for metal investors who want the ability to hedge against systematic, geopolitical, and economic risks while maintaining the ability to securely liquidate and/or take delivery of their holdings in the future.

What is allocated storage and why does it benefit you?

Allocated storage of precious metals is the best way to store rare strategic and precious metals because it implies that you are the direct owner of the metal, not Swissmetal Inc. (SMI) or any other third-party. When a rare metal is allocated, there is a defined and recorded owner of the metal, namely you. The manager of the metal (i.e., SMI) or the vault does not have any direct claim on the metal.

A good way to compare allocated versus unallocated metal is to look at it in accounting terms. Allocated metal does not show up on the balance sheet of SMI or the vault operator. It is an off balance sheet item, which is the property of its customers.

Unallocated metal shows up in a company’s balance sheet as an asset, and the claims to the metal from its customers as the corresponding liability. This is how many accounts with financial institutions work, as well as the various certificate programs worldwide sponsored by governments or private entities. If one of those entities were to go bust, any of its creditors would have first claim to those assets, leaving the entity’s customers with no access to the metal (liabilities) promised to them.

When your metal is held in allocated storage, you have the assurance that they are protected should SMI or the vault it works with ever face bankruptcy or other financial difficulties, because their creditors would have no claim to your property since it is not a financial asset of SMI or the vault.

Although your metal is always allocated, not all bars held in our vaults are identified as specifically belonging to a certain customer. Swissmetal Inc. has no ownership interest in your metal and title to a certain amount of metal rests with you, even if your metal is not specifically identified.

Contact Swissmetal Inc. to learn more about segregated and allocated vault storage in private insured offshore vaults in Switzerland and Panama.