Page 40 - 15DEC2019E-5

Is India turning a blind

eye to smuggled gold?

tax breaks in 2013 for golddoré — also Department reveals that Indian custom
tehelka bureau known as unrefined gold. This has led to officials have seized 1,197.7 kg of smug-
gled gold in the April-June quarter in
traders covering up questionable prov-
A tation of gold doré to take advantage with the same period a year ago. The
enance claims by falsifying documen-
2019, an increase of 23.2% compared
new report reveals India
illegal trade could rise further in com-
of lower taxes. Gold doré imports shot
to be one of the largest
ing months as India, the world’s sec-
from 23 tons in 2012 to over 229 tons in
gold smuggling hubs in the
2015 as a result of these tax breaks.
world. As a result, gold that
ond biggest gold consumer, raised an
is tied to conflict, human
Falsified origin documents: Gold
points to 12.5% in July’s federal budget,
rights abuses, and corruption in Africa doré imports have spiked, with the ma- import tax on gold by 2.5 percentage
and South America is entering legal jority coming from producing coun- effectively increasing smugglers’ mar-
international markets through India. tries that lack strong internal controls gins, industry officials told Reuters.
In a report released on November or are linked to supply chains with The duty difference has been en-
28, 2019, titled “A Golden Web: How weak evidence of due diligence. Analy- couraging people to smuggle in gold
India became one of the world’s larg- sis of trade data reveals more declared from the Middle-East. The gold smug-
est gold smuggling hubs”, IMPACT-an gold imports to India than some coun- gling has also boosted illegal forex
independent non-profit collaborating tries are capable of producing, such as transactions used to finance smuggled
with local partners for lasting change, in the Dominican Republic and Tan- gold.
has uncovered how India imports zania, as well as instances of paper-
approximately 1,000 tons of gold per work fraud like in Ghana. In the case
year — a quarter more than official of the Dominican Republic, as much
figures indicate. Some enters as legal as 100.63 tons of gold doré imported
imports thanks to falsified paperwork. to India between 2014 and 2017 cannot
“Actors across India’s gold indus- be accounted for in the country’s gold
try are failing to do proper checks on production.
where gold comes from to ensure Complicit allies: Refined gold is
it’s not financing conflict and human being smuggled into India primarily
rights violations,” according to Joanne from the United Arab Emirates, while
Lebert, IMPACT’s Executive Director. key traders and refiners in Africa’s
“With its role as a leading global gold Great Lakes region with links to India
manufacturing centre, India must take have been identified as being part of the
action to address the weaknesses in its illicit gold trade.
gold supply chain.” As a result, gold that is tied to con-
IMPACT’s research reveals that flict, human rights abuses, and cor-
one third of the world’s gold passes ruption in Africa and South America
through India, the heart of the world’s is entering legal international markets
gold manufacturing sector. With its through India. “Actors across India’s
gold jewellery exports on the rise, India gold industry are failing to do proper
has become one of the world’s leading checks on where gold comes from to
trading hubs — with illicit gold entering ensure it’s not financing conflict and
country, being transformed into goods, human rights violations,” according
and leaving for international markets, to Joanne Lebert, IMPACT’s Executive
including North America. The report Director. “With its role as a leading
identifies three primary factors which global gold manufacturing centre, India
allow a problem of this magnitude: must take action to address the weak-
Tax breaks: To boost India’s refinery nesses in its gold supply chain.”
sector, the government-introduced Information gathered from Customs

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