NEW RULES OUTLAW MELTING
December 14, 2006
People who melt pennies or nickels to profit from the jump in metals prices could face jail time and pay thousands of dollars in fines, according to new rules set up by the U.S. Mint.
Under the new rules:
- It is illegal to melt pennies and nickels, or export the coins for melting.
- Travelers may legally carry up to $5 in 1- and 5-cent coins out of the United States or ship $100 of the coins abroad "for legitimate coinage and numismatic purposes."
- Violators could spend up to five years in prison and pay as much as $10,000 in fines.
- Plus, the government will confiscate any coins or metal used in melting schemes.
Melting has resulted from skyrocketing metal prices worldwide, particularly in rapidly growing China and India. Soaring prices mean that the value of the metal in pennies and nickels exceeds the face value of the coins. Overall:
- The value of the metal in a nickel is now 6.99 cents, while the penny's metal is worth 1.12 cents, according to the U.S. Mint.
- Prices for zinc, which accounts for nearly all of the metal in the penny, have risen 134 percent this year, according to the London Metal Exchange.
- Even accounting for a recent decline, the price of copper is up 50 percent since the start of 2006.
The rules are similar to those enacted in the 1960s and 1970s, when metals prices also rose, the Mint said. Ongoing regulations make it illegal to alter coins with an intent to commit fraud. Before today's new regulations, it was not illegal to melt coins.
Source: Barbara Hagenbaugh, "New rules outlaw melting pennies, nickels for profit," USA Today, December 14, 2006.
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