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TRADE

The gold smuggling has been rife make jewellery and small coins and trading hubs — with illicit gold entering
since 2013 when India raised import bars. The smuggling of gold has been country, being transformed into goods,
duties on the metal to 10% in an effort becoming lucrative with rising gold and leaving for international markets,
to curb demand to reduce the country’s prices. including North America.
current account deficit. Grey market IMPACT’s research reveals that “India is at the heart of a web of the
operators — businesses that smuggle one third of the world’s gold passes illicit trade of gold, with threads span-
gold from overseas and sell it for cash through India, the heart of the world’s ning the globe and almost certainly
to avoid the duties - got a further boost gold manufacturing sector. With its financing conflict and corruption.
in 2017 when India imposed a 3% sales gold jewellery exports on the rise, India Authorities must take action to remove
tax on bullion. has become one of the world’s leading incentives for gold smuggling and
In 2018-19 fiscal year that ended on ensure the gold industry implements
March 31, customs officials seized 4,058 due diligence. Anyone buying India’s
kg (4 tonnes) of gold, up from seizures The country imports gold jewellery should be asking ques-
of 3,223.3 kg a year ago and 429.17 kg tions about where that gold comes
in 2012/13. Grey market operators usu- approximately 1,000 from to have confidence in their supply
ally sell gold at discounts to prevailing tons of gold per year — chain,” adds Lebert.
market prices as they evade paying the
15.5% tax, denting business of banks and a quarter more MPACT also calls on actors across
bullion dealers. The World Gold Coun- India’s gold industry to implement
cil has said up to 95 tonnes of gold was than official I due diligence on their gold supply
smuggled into India in 2018, although figures indicate. Some chains. Gold traders, refiners, and jew-
India’s Association of Gold Refineries ellers have a responsibility to under-
and Mints and other industry bodies are entered as legal stand, mitigate, and publically report on
put the figure at more than twice that. imports thanks to any risks in their supply chain — all the
Smuggled gold, usually brought in way back to the mine site.
the form of kilo bars, is then melted to falsified paperwork To tackle the problem, IMPACT calls
on India to take immediate steps to
harmonize its taxes, including between
doré and refined gold to discourage
smuggling; and to enhance regulatory
controls at the border to require ad-
ditional, valid information for all im-
ports of all artisanal gold. “India is at the
heart of a web of the illicit trade of gold,
with threads spanning the globe and
almost certainly financing conflict
and corruption. Authorities must
take action to remove incentives for
gold smuggling and ensure the gold
industry implements due diligence.
Anyone buying India’s gold jewel-
lery should be asking questions about
where that gold comes from to have
confidence in their supply chain,” adds
Lebert.
IMPACT also calls on actors across
India’s gold industry to implement due
diligence on their gold supply chains.
Gold traders, refiners, and jewellers
have a responsibility to understand,
mitigate, and publically report on any
risks in their supply chain--all the way
back to the mine site.
LETTERS@TEHELKA.COM

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