The Financial Express

In need of a policy on gold trading

| Updated: October 19, 2017 16:25:41

In need of a policy on gold trading

It has been reported in the media recently that there is a stock of 100 tons of illegally procured gold with 11 top businessmen in the country. The value of this gold is about Tk 450 billion. Intelligence agencies are believed to have more details. 
In the meantime, Customs intelligence has filed a suit against Apan Jewellers regarding 15 maunds of gold that were found to have been procured illegally. Customs intelligence department has also information about top 11 gold businessmen. Bangladesh Bank has furnished information to customs intelligence regarding their banking transactions.
Jewellers are now voicing two demands. One is allowing import of gold officially and the other relates to legal cover for undeclared gold. They have approached Bangladesh Bank regarding import of gold. It is learnt that Bangladesh Bank will start working on this after the Eid. But the process of dealing with undeclared gold is complicated. Thje government is reportedly thinking of imposing tax on undeclared gold. There may be tough regulations to be in place on smuggled gold.
Bangladesh Jewellers Samity called off its indefinite strike as the government assured it of announcing a gold import policy. The shrike was scheduled to begin on Sunday (May 11) demanding immediate formulation of a gold import policy.
In the absence of any gold import policy, jewellery business is totally dependent on smuggling. Gold import is financed through hundi. 
In India gold is imported through selected banks and distributed among the jewellers. As a result, government of India gets a lot of revenue from this source. Gold businessmen in Bangladesh want a similar system. Big consignments of gold that are detected in Dhaka and Chittagong airports are meant for shipment to other countries. These consignments have links with smuggling syndicates of the neighbouring countries. Here Bangladesh is used as a corridor. 
It is estimated that Tk 200 billion got transferred from the country in connection with import of gold. Bangladesh Bank is worried about this. Big consignments of gold coming from Dubai and Singapore are paid for through hundi. In exchange of gold, Bangladesh is getting various harmful drugs. People in the border areas have said that smuggling of gold, arms and drugs have increased recently. Gold is coming from the Middle East and other countries and is re-exported to India through unofficial channel.
Apart from Apan jewellers, other big jewellers have also collected gold  through illegal means. Some jewellers at Baitul Mukarram have stockpiled gold bars from the smuggling syndicates. Travellers bring in gold from abroad mainly for sale to the jewellers. Jewellers can not prove how they have purchased gold which was brought under baggage rules. 
It is not known whether 100 tons of gold believed to be available with illegal hoarders will be seized. Jewellers have been reportedly assured by the authorities that they will not be harassed until a full-fledged policy is formulated. This means that gold lying with some jewellers will not be recovered. This will encourage the gold smugglers and criminals. 
It is true that there is no proper policy for gold trade, and absence of policy is responsible for letting things loose, but this must not constitute an excuse for sparing the illegal hoarders of gold. It is necessary to formulate a proper policy on gold trade but gold illegally held by some people should be seized and those responsible brought to justice. 

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