Gold smuggling marks sharp rise
Gold smuggling via Bangladesh has reached an alarming level which customs officials say has resulted mainly from the rise in import duty on gold in India.
Smuggling syndicates are using Bangladesh as a transit point to smuggle the yellow metal to India, which has hiked import duty on it thrice to 10 percent since January last year.
This is evident in the recent sharp rise in seizure of smuggled gold by Bangladesh customs officials.
Around 520 kilograms of gold was seized last year, whereas the amount was only 25 kg in 2012, according to customs intelligence unit of the National Board of Revenue.
The trend seems to rise further this year. Customs officials seized 220 kg of gold at Dhaka and Chittagong airports in the last three months.
Of those, 107 kg gold was seized from an inbound flight at Chittagong airport on March 25.
In July last year, 1,064 gold bars weighing around 124 kg were seized at Shahjalal International Airport in Dhaka. It is the biggest gold haul in recent years.
Seizure of one or two kg gold every day is quite common at the two airports, said customs officials.
“We have intensified our vigilance at the airports and the growing number of seizures is an outcome of our efforts,” Moinul Khan, director general of customs intelligence department, told The Daily Star.
Customs authorities and local jewellery traders say price gap between the UAE, India and Bangladesh encourages smugglers to bring gold to Dhaka for transporting it to India illegally. Per 10 gram gold costs about Tk 38,000 in Dubai, more than Tk 40,000 in India and around Tk 46,000 in Bangladesh.
India raised import duty on gold from 2 percent to 4 percent in April 2012, 6 percent in January last year, 8 percent in June and 10 percent in August to stop outflow of foreign currency and reduce the yawning current account deficit.
In May last year, traders in India imported 1.62 lakh kg gold, which came down to 19,300 kg in November following the increase in import duty.
Gold smuggling has become very lucrative for offenders, as smuggling of one kg gold leads to net savings of over 1.5 lakh rupees through legal channel, according to India's Associated Chambers of Commerce and Industry.
The World Gold Council estimates that a staggering 150-200 tonnes of gold is smuggled to India each year.
Indian Border Security Force seized a consignment of smuggled gold worth over 1 crore rupees near Darshana border in Kushtia.
Around 5 percent of the gold smuggled to India comes through Bangladesh, said sources in the BSF and Indian customs.
“Rise in import duty in India has caused this spurt in smuggling through Bangladesh,” a senior official of Bangladesh customs intelligence unit told The Daily Star.
Smuggled gold is also sold on the local market, he said.
Land ports are also used as transit points for smuggling gold to India via Bangladesh.
It is difficult to contain gold smuggling through land ports due to absence of required facilities, Lt Col Matiur Rahman, commanding officer of Border Guard Bangladesh in Jessore, told The Daily Star.
"Gold smuggling could have been checked if the land ports had necessary equipment and manpower," he said.
The BGB and police seized 9.5kg gold from smugglers at Benapole land port in the last three months, added Matiur.
Gold and cattle smuggling are connected in many cases. Payments for cattle smuggled from India are made in gold bars instead of money, said BGB sources.
The rise in gold smuggling has also become a headache for local businessmen.
“Bangladesh is being used as a smuggling route. Honest traders are challenged by smugglers who sell gold at a lower price,” said Dilip Roy, president of Bangladesh Jewellers' Samity.
The 107 kg gold seized at Chittagong airport on March 25 is enough to meet the country's demand for gold for three months, he said.
There is no exact estimate of gold consumption in Bangladesh. But it's clear that the figure is insignificant compared to that of India, which is world's second largest gold consumer after China.
Bangladeshi traders don't import gold, as its price fluctuates frequently. Besides, gold market here is not so big.
Local jewellers rely on passengers of international flights each of whom is allowed to bring 200 grams of gold and the same quantity of jewellery, paying a duty of Tk 150 per gram.
“Around 12,000 to 17,000 passengers arrive at the two airports every day. If 100 of them bring gold [400 gram] permitted by the law, the amount will be 40 kg,” said Dilip Kumar Agarwal, general secretary of Bangladesh Gems Stone Merchants Association.
Recycling is another major source of gold in local market. Around 50 kg of used gold is transacted every day in the capital's Tantibazar, said traders.
On seizure of smuggled gold, customs department deposit it with Bangladesh Bank that later sells it at auction. But the central bank didn't offer any auction since 2011.
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