The Central Bureau of Investigation in India has registered a case against two officials of the Customs Department for allegedly receiving gifts and remuneration from gold smugglers to clandestinely allow them to carry out their illegal activities.
The matter first came to light on September 19, in what is being termed the biggest seizure of smuggled gold at an Indian airport. Gold bars weighing 20 kilograms were seized from two young women at the Cochin international airport, concealed in specially made jackets worn by the women.
Gold smuggling in India from Dubai.
The bars were valued at $936,742 (Rs 58 million), hidden by the women who had alighted from an Emirates flight which had come in from Dubai. The two had cleared the green channel and were about to leave the airport when they were arrested.
The women have since been spilling the beans, giving information about a smuggling racket involving customs officials that is rife at the Cochin airport.
Their arrest also appears to have opened up a can of worms in the country, with investigative authorities scanning the offices and residences of related custom officials. The authorities have reportedly conducted a raid at the residence of C Madhavan, Deputy Commissioner of Customs Department at the same airport.
The Kochi unit of the Central Bureau of Investigation (CBI) has registered a case against seven persons, including three Customs officials, in connection with the foiled gold smuggling attempt at the Cochin International Airport.
Punishment for gold smuggling in India.
The recent haul has turned the spotlight on the massive rise in the amount of gold being smuggled into the country. India, the world’s biggest bullion buyer, has raised gold import taxes three times this year, in an effort to offset the falling rupee, which has fallen 20% against the dollar since 2020. The gold is liable to total confiscation and a penalty, which will be around 25% of the value of gold (section 112 of the Customs Act, 1962).
Even World Gold Council managing director for Investments, Marcus Grubb, in mid August, estimated that smuggled gold into India would reach 200 tonnes in 2021, up 50% from 2019. $11 billion in gold was smuggled into India last year.
This, despite the fact that an alert has been sounded by financial intelligence agencies to all international airports and other transit points within the country to check for gold, smuggling continues to be rampant.
“Several of our intelligence officials have been asked to intensify measures, including minutely scanning suspect passengers and commercial consignments to check for gold smuggling,”A Sahai, a Mumbai airport official.
The issue has become very severe in Ahmedabad, Gujarat, the official added, since most of the diamond processing and jewellery units are based in Surat and require large quantities of the precious metal.
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“About 100 kilograms of gold is smuggled into Ahmedabad every day to meet the pent up demand. With the festival season around the corner, jewellers are bound to get their hands on as much raw material as they can at this stage to roll out new gold jewellery designs for the forthcoming Navratri festival on October 5,”Sahai added.
There are 19 international airports and gold smuggling entry points in the country.
- On September 26, Sri Lankan customs authorities confiscated 3 kilograms of gold and detained two men who had concealed the precious metal in their private parts. The men were to board a Mumbai bound flight.
- In separate cases, seven other gold couriers were detained by the authorities, who foiled their attempt to sneak in 25 bars of gold into India, on a flight from Sri Lanka to Chennai.
- Customs officials at the Mumbai airport have been activated all this week, with repeated seizures. A passenger donning three underwears with a hidden 1 kilo gold bar was arrested by the authorities on Monday, September 23.
- The very next day, an Air Intelligence Unit arrested a man who had arrived from Bangkok on an Air India flight with 2 kilo gold hidden in his suitcase.
- Air Intelligence Unit officials of Goa Customs at the Dabolim International Airport too uncovered 12 kilograms of gold in 12 gold bars, kept innocuously under the seat of the waiting room at the airport. Traders say smuggling has been on the rise with the stringent import conditions of the government.