18.
In one
Bermuda contract with Italcambio again provides an exception as the
company has to pay a royalty of 25% and 22% on proof and uncirculated coins, respectively, for both gold and silver. The return on proof
sets of the low denomination circulation coinage is more favourable,
usually in excess of 30% of face value and frequently higher. The
amount is apparently dependent to some extent on the metal content of
the coins. In Belize, for instance, the royalties on all silver proof
sets represented 90% of face value whereas the return on a cupro-nickel
set of the same denomination was only 60%. However, such sets
normally account for only a small percentage of total issues.
instance only has there been a guaranteed minimum royalty, where
Paramount guaranteed to the Turks and Caicos Government receipts of
at least US$70,000 "in respect of each calendar year during the term
of this Agreement". Ostensibly such an arrangement is beneficial to
the territory but it does place an obligation upon the territory to
agree to issue coins in quantities sufficient to attain this figure.
8.4(3) The extent of a territory's liability to meet some of the
costs incurred during the term of the contract varies slightly but
remains minimal in view of the overall royalty payments involved.
Earlier contracts (i.e., pre-1975) appear to indemnify the territory
from all expenses resulting from the programmes (e.g., minting,
transportation, insurance, advertising, etc.); however, in the case
of the Franklin contracts it is common for direct sales to the
territory (either for on-sale to collectors or for circulation
purposes) to be charged f.o.b. Franklin Mint with no addition to the effective royalty payment. Thus the territory incurs certain transportation costs, albeit for a relatively small number of coins.
In the one example we have of an Italcambio contract, the Bermuda
Monetary Authority is given a discount for local sales in addition to the standard royalty. In recent contracts the trend (not universally
applied) has been towards levying a small charge per denomination for
changes in design and annual dating. Such charges have been in the
region of US$1,500 for initial design work, $750 for subsequent redesign
and $250 for dating.
8.4(4) Arrangements for the payment of royalties due to the
territories follow broadly the same pattern in practice, although
contractual terms vary (see annex 3). Belize, the Solomon Islands,
and BVI receive monthly payments, usually based upon the coin sales of
the previous month. Payments to the other territories are made either
at the time when final orders have been received by the company from