The discovery of some 30 kgs of gold valued at about Rs 15 crore from a diplomatic cargo in Thiruvananthapuram international airport this July 5th may appear to be like a Bollywood thriller, but it is quite serious in nature. More so because, as the gold, concealed in imported household material was reportedly addressed to the UAE Consulate-General Office in Kerala, only depicts the impunity with which smuggling syndicates operate - misusing the name of person(s) who enjoy diplomatic immunity.
Beyond generating political heat, the above case has been responsible for the Principal Secretary to the Kerala Chief Minister losing his job for his alleged links with the main suspect Swapna Suresh. Said to be the mastermind behind the smuggling of gold, Swapna Suresh has since gone into hiding and moved for anticipatory bail in the Kerala High Court.
Now that the National Investigation Agency has been tasked to investigate the gold smuggling, after the State Chief Minister wrote to the Prime Minister for a CBI probe, trial by media ought to be avoided.
NIA is stated to have invoked the various provisions of Unlawful Activities (Prevention) Act and filed FIR against four persons that includes Sarith Kumar and Swapna Suresh - both worked briefly for the UAE’s Kerala Consulate - apart from Sandeep Nair (Swapna’s friend) and Sharjah-based Fazil Fareed, who had sent the consignment containing gold.
For a moment let us appreciate the fact that gold, as a precious commodity may be small in size but its value is high. With a significant price difference between the international and domestic markets, those who take to gold smuggling, reap rich financial dividends.
Amongst its adverse impacts, the COVID-19 pandemic is said to be responsible for a significant fall in the demand in India’s gold imports during April-May 2020 (valued at Rs 595 crore) when compared to the corresponding period of 2019-20 Rs 65800 crore. Yes, on one hand the decline in gold imports can help in narrowing the country’s trade deficit (difference between imports and exports).
Considered as a symbol of prosperity, gold has an emotional position and unparalleled sentimental value in the minds of people across the world and India is no exception. Nonetheless, smuggling of gold in India is driven by the demand and supply gap.
Reports indicate that about 90 per cent of the country’s domestic gold jewellery industry is almost dependent on imported raw materials. Thus, gold is in demand for both investment and consumption purposes.
Smuggling, defined as a secret movement of goods across national borders to avoid Customs Duties or import or export restrictions, typically occurs when either the customs duties are high enough to allow a smuggler to make a large profit on the clandestine goods or when there is a strong demand for such goods.
Gold is one such item which is smuggled into many major Indian cities mostly either by concealment in their luggage/person. Smugglers till a few years back either wore gold or hid chunks in shoe heels or watches but seized gold of late are in the form of small factory made gold plated items such as spoons or belt buckles to large ones as compressors which makes it difficult to detect tampering. There have been attempts to hide gold strands in human hair.
The gangs, as reports indicate, at times operate in groups and often travel from small cities to metro cities by bus/train in order to avoid detection. Gold has been found smuggled in the country by way of concealment in various equipment made up of heavy metals or by covering/plating with other metals to avoid detection.
How much gold is smuggled into India? Some reports quoting the World Gold Council estimates seem to suggest that nearly 150-200 tons of gold is smuggled annually into India.
Since 1957, the Directorate of Revenue Intelligence (DRI), under the Central Board of Indirect Taxes and Customs, Government of India has been the designated apex body to deal with smuggling in India. DRI enforces the provisions of the Customs Act, 1962 apart from over fifty other allied legislations carries out investigations, adjudication of cases and prosecution of the arrested persons.
DRI has detected large amounts of gold being smuggled from Myanmar, Nepal and Bangladesh border to India through the bordering areas of North-Eastern states. With an increase in the frequency of flights operating into the Gulf from India, like for instance, last year, the Customs in Mumbai airport which handled about 14,000 international passengers arriving every day, seized about 204 kgs of smuggled gold between April-January up from 54 kg the previous year. Kerala closely follows Mumbai as the biggest entry point for gold smuggling into India.
Between financial years 2011 and 2014, the worth of gold seized by DRI has risen more than fourteen times to Rs 250 crore. Notably in 2018-19, 490 cases of attempted smuggling of gold, weighing over 460 kgs, valued at approximately Rs.142 crore were detected by the DRI officials. At Kochi airport alone, 131 kg of gold worth Rs 48 crore was seized by DRI in 2019. About 355 kg of gold worth Rs 72 crore was seized in Chennai Airport last year from passengers arriving from Singapore, Malaysia and Sri Lanka. The biggest seizure was from two Korean passengers from Hong Kong who had landed in Chennai with about 24 kg of gold worth Rs 8 crore concealed inside their shorts
If reports are to be believed, temporary recruits are engaged by the gold smuggling mafia. The carriers or mules, both men and women as they are called, get paid Rs 30,000 to Rs 50,000 per kg of gold smuggled apart from air tickets and paid overseas stay. They in fact risk their lives for the quick money as rivalry often results in brutal killing of such mules. Not long ago, when the bodies of two young ‘mules’ believed to regularly smuggle gold from the Gulf to India were unearthed in a plantation in Kasargod area, the incident came to light.
A few weeks back, Kochi Police arrested a celebrity hair stylist in connection with cases pertaining to extortion of an actress and some models. The probe reportedly exposed a gold smuggling racket using celebrities after eight models came forward with complaints that they had been kept in captivity and money was extorted from them. The models were allegedly forced to work as carriers of gold with the promise of huge remuneration. After extorting gold ornaments from them to meet immediate expenses the gang would promise to pay them back once the gold was ferried. After taking away the valuables from women, the gang would abandon them and even threaten them against revealing anything.
To some extent technology is believed to assist in curb gold smuggling. The Advanced Passenger Information System (APIS) in vogue across many Indian airports, helps authorities to analyse travel patterns on individual passengers to identify potential smugglers. Using APIS, the passenger list obtained from the airline is fed into the system. Based on the passports, the system helps to identify passengers who go abroad frequently and return within five to seven days. According to an analysis, most of those involved in smuggling activities undertake the foreign trip for a fixed duration to bring gold illegally into the country, having evaded duty and taxes. Whereas in the case of a businessman or tourist, the duration of the trip will vary and it will not be frequent. Based on such information, suspicious passengers are mapped and interrogated.
But this is just a tip of the ice-berg. What about the black sheep within the system? Yes, recently an Additional Director General, posted in Ludhiana along with two other persons were nabbed by the CBI in a bribery case where Rs 25 lakh was being accepted as advance against a demand of Rs 3 crore from an exporter.
Has greed driven the world crazy?
(Published on 13th July 2020, Volume XXXII, Issue 29)