The revival of gold smuggling and the role Dubai, China and SL are playing

New Delhi: Last week, yet another seizure of a huge consignment of gold was reported. This time around it was the Chennai team of the Directorate of Revenue Intelligence which seized 23.1 kilograms of gold smuggled into India from Sri Lanka.

This is not just a one off seizure and officials have in the past month alone seized over 50 kilograms of gold and all these operations fell under the DRI Chennai Zonal Unit.

While the past year has seen seizure to the tune of 103 kilograms on the Sri-Lanka India route, the problem has been persisting in Mumbai, Delhi and also at the Nepal border. The Mumbai airport alone recorded seizure to the tune of 125 kilograms of gold in 2017 when compared to the 66 kgs that were seized in 2016.

Demonetisation put a temporary halt on gold smuggling as currency was squeezed out of the system. However that appears to be changing slowly and with the currency back, the racket is back in action.

The Dubai-China racket:

While the main syndicate is based out of Dubai in recent times, India has been witnessing a lot of gold smuggling cases on the Nepal border as well. A few months back 88 bars of gold were seized at the Nepal border, the highest quantity since 1988 and investigations found that the same had been routed in from China.

Intelligence officials say that there is increased activity at Janakpur town near the Indian border. Smugglers are getting the gold in from China in large numbers and pushing it into India. The gold is brought in by the only functional road between Nepal and China and later dumped into India.

Similarly another racket emerges out of Dubai and the gold is pushed into Chennai and Mumbai. However Indian officials say that the bigger worry is the smuggling that takes place from Chennai. Statistics reveal that there has been a steady rise in such activities since 2015. While 120 tonnes of gold were smuggled in 2015, the figure went up to 130 in 2016 and 160 in 2017. One of the reasons attributed to this rise has been the rise in India’s import duty from 2 per cent in 2012 to 10 per cent.

The route that is being used by the smugglers is under the radar of the Intelligence Bureau. After the Tatopani route was closed following the massive earthquake, smugglers switched to Rasuwagadhi. In the past five months, there has been seizure to the tune of 173 kilograms on this route alone.

The Sri Lanka racket:

Officials are also facing a tough time curbing the racket which stems out of Sri Lanka. The Dubai syndicate has avoided landing the gold directly into India. They drop it off at Sri Lanka following which it is moved into India. The first landing point is either Chennai or Thiruvananthapuram. From there it is transported to Mumbai and other cities.

It is either transported by air or sea. The sea route often taken is the same that is used to smuggle cigarettes, narcotics and saffron. In Thiruvananthapuram, the seizure recorded in 2017-18 stands at 13 kilograms.

In the case of Chennai a majority of the gold that was smuggled was by boat. Out of the 193 kilograms seized in the past year, 103 kgs which is valued at around Rs 31 crore landed by boat. It is the same racket says an officer with the DRI Chennai. Fishermen are the ones who bring it in along with other goods such as narcotics, saffron and cigarettes. So far the officials have arrested 23 persons in connection with cases of gold smuggling.

The air route too has become problematic for the officials. Recently two persons were arrested at the Chandigarh airport. They had hidden gold on their body and had brought in the same from Dubai. Investigations revealed that they were lured into becoming mules. They are given big money to smuggle the gold into India. Similar cases were reported in Maharashtra and investigations revealed that the mules were being roped in from Batala in Punjab where there is a thriving market. Recently Commissioner of Customs, Sumit Kumar proposed cancelling of passports of gold smugglers in a bid to bring down this racket.

Resolution:

Last month both India and Sri-Lanka decided to regularly exchange information about gold smuggling. They have resolved to strengthen cooperation in preventing the smuggling of gold, drugs, fake Indian currency notes (FICN), wildlife, and other contraband across the India-Sri Lanka route, and to address trade-related issues such as ‘country of origin’ frauds that impact the revenue of both the countries, a joint statement read.

The DG-level talks on anti-smuggling and related matters were held after 10 years and focused on areas of mutual interest to combat smuggling and improve trade facilitation by use of data analytics, new investigation techniques, inter-agency co-ordination, and capacity building, the statement issued by the DRI said.

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