Legal classification of temporary gold buying campaigns in itinerant trade
In its judgment of March 17, 2022 (Case No. 4 A 1381/18), the Higher Administrative Court of North Rhine-Westphalia clarified fundamental questions regarding the permissibility of temporary gold buying campaigns within the context of itinerant trade. The decision addresses the scope of the prohibition of buying and selling precious metals as part of commercial itinerant activities and thus provides important guidance for practitioners dealing in gold and other precious metals.
Background: The prohibition in itinerant trade
According to Section 56 (1) No. 1 of the Trade Regulation Act (GewO), it is generally prohibited for itinerant traders to purchase or sell precious metals, unprocessed gemstones, or items made of gold, silver, or platinum outside of a fixed business premises. This regulation serves to protect consumers who, due to the lack of regularly visited business premises, may be at increased risk of dubious business practices and being overreached.
Case law of the Higher Administrative Court of North Rhine-Westphalia
At the heart of the proceedings was the disputed question of whether commercially organized gold purchases, conducted at various locations and only for limited periods of time and space, fall under the prohibition of buying and selling precious metals in itinerant trade. The plaintiff had carried out so-called gold buying campaigns in the North Rhine-Westphalia region and argued that, because these campaigns were limited in location and duration, the prohibition did not apply to them.
However, the court made it clear that even such campaigns, conducted in changing and sometimes specially rented premises for a limited period, do not lose the character of itinerant trade. What matters is not whether temporary premises are rented, but rather that the business activity is not tied to a permanently established business location. Even if the form of acquisition – for example through short-term advertising, announcements, or presence at changing locations – is utilized, the essential features of itinerant trade within the meaning of the Trade Regulation Act remain present.
The Higher Administrative Court particularly emphasized that the prohibition under Section 56 GewO must not be circumvented by constantly changing locations or by setting up provisional sales or purchasing outlets that only outwardly resemble fixed businesses. The key factor remains the absence of a permanent establishment and the associated risks to contract partners.
Significance of the decision for practice
The judgment provides clarity and gives authorities a solid basis for targeted controls against impermissible gold buying campaigns within itinerant trade. This affects not only classic “mobile” gold buyers who, for example, operate at trade fairs, in hotels, or in parking lots. Providers who use retail spaces or premises only for a short time and thus merely simulate a permanent establishment can also be subject to regulatory intervention.
For companies and traders within the precious metals sector, the ruling imposes increased requirements for reviewing their own business structures. The classification as itinerant trade can have far-reaching consequences for the granting or maintaining of a business license and may also result in regulatory consequences. Equally relevant are transparency towards contracting parties and the consistent compliance with consumer protection regulations.
Delimitation issue in relation to a permanent establishment
The judgment underlines that not only the outward appearance of a business location, but its actual purpose and use, are decisive in distinguishing it from a fixed establishment. For typical gold buying campaigns—regardless of whether they take place in rented hotel rooms, temporarily set-up pop-up shops, or community halls—itinerant trade remains the defining principle, provided the business activity is not conducted permanently and regularly at the same location.
Outlook and ongoing developments
The decision of the Higher Administrative Court of North Rhine-Westphalia provides insights into the restrictive application of the utilization prohibition under the Trade Regulation Act and is likely to serve as a model for comparable cases at the federal level. Companies operating across borders or with national locations are therefore advised to carefully observe local regulations.
It should be noted that proceedings concerning itinerant trade and precious metals law often involve complex considerations and that different assessments may be possible in individual cases.
The judgment is based on a published decision, which is available at the following source: urteile.news/OVG-Nordrhein-Westfalen_4-A-138118_Goldankaufaktionen-fallen-unter-das-An-und-Verkaufsverbot-im-Reisegewerbe~N31534.
Given the complexity of the trade law framework for temporary precious metal purchases, an individual assessment can be advisable for further legal questions. The Rechtsanwälte at MTR Legal are pleased to be at your disposal in this regard.
